MMM (Ponzi scheme company)
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| Industry | Office Equipment importer (1989-early 1990s) Ponzi Scheme initiator (1992 onwards) |
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| Fate | Shut down by Russian police in 1994, declared bankruptcy in 1997, reopened in 2011 targeting almost 110 countries. |
| Founded | 1989 |
| Headquarters | Russia |
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Key people
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Sergei Mavrodi |
МММ was a Russian company that perpetrated one of the world's largest Ponzi schemes of all time, in the 1990s. By different estimates from 5 to 40 million people lost up to $10 billion. The exact figures are not known even to the founders. In 2011, MMM re-opened as "MMM Global" with up to 110 subsidiaries per country; it became widely popular in various African countries like South Africa, Nigeria, Zimbabwe , Kenya and Ghana with some attributing this popularity to poverty and poor government regulation or law enforcement.
In 2017, the Redeemed Christian Church of God in Nigeria warned all members against participating in MMM It was said that some RCGC church pastors were promoters of the scheme from the beginning more than one year ago when MMM made its entry. By January 2017, hundreds of other similar Ponzi schemes jumped into the ever widening Ponzi industry in Nigeria, amid reports that MMM had crashed in December 2016. Some of these schemes include ABCDonor, Twinkas, Ultimate Cycler etc, with rates offered soaring anything upto 200%. All these imitators seek to outdo MMM Nigeria by offering extremely generous rates, creating a cascading effect on the sector.
MMM was established in 1989 by Sergei Mavrodi, his brother Vyacheslav Mavrodi, and a woman Olga Melnikova. The name of the company was taken from the first letters of the three founders' surnames.
Initially, the company imported computers and office equipment. In January 1992, tax police accused MMM of tax evasion, leading to the collapse of MMM-bank, and causing the company to have difficulty obtaining financing to support its operations. Faced with difficulties in funding its foreign trade, the company switched to the financial sector. It offered American stocks to Russian investors, but met with little success. Later, MMM-Invest was created for the purpose of collecting vouchers during privatisation. This effort was similarly unsuccessful.
MMM created its successful Ponzi scheme in 1994. The company started attracting money from private investors, promising annual returns of up to one thousand percent (1,000%). It is unclear whether a Ponzi scheme was Mavrodi's initial intention, in so far as such extravagant returns might have been possible during the Russian hyperinflation in such commerce as import-export.
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Wikipedia