SWEAT, TEARS, ANGUISH: The MMM Crash
It was a day of reckoning of sorts, participants in the scheme who had before now waved away every warning by government agencies and professional financial analysts as an unnecessary intrusion suddenly realized that they should have listened after all. There were tales of despair, anxiety, fear and hopelessness.
There were those who had invested millions with the hope of making huge returns in December, some had fixed weddings and other ceremonies during the Christmas festivities and had invested their monies with the hope of making returns before then while others had invested and we’re simply waiting to withdraw toward the festive period.
The result was that those wanting to pull out their investments outnumbered those willing to make fresh investments, and suddenly, the scheme that had lured millions of Nigerians with mouthwatering 30 percent return on investment, in addition to 10 percent referral bonus and five extra percent for those called guiders in the system could no longer keep its promise.
It had relied on the massive influx of new investors to pay off interests and bonuses known as Mavros of old investors, and was structured in a manner that would encourage these older investors to consistently scout for new ones.
In addition to being paid 30 percent interest on investments, for any new person you introduce to the platform, you get 10 percent of his total contribution as referral bonus. For instance, as an older participant, if you get a new person to register with N1million, you automatically get N100,000 which in itself will grow by 30 percent in one month.
This huge reward arrangement pushed older investors to consistently scout for new ones, and in a country with high unemployment and underemployment rates, it was be hardly surprising that the number of participants grew in leaps and bounds. The unemployed found an easy way out in MMM, the employed who by the way, also constituted a huge percentage of participants found a way to make additional monies without stress. Such that between November 2015 to November 2016 the scheme had grown from a handful of participants to nearly three million active members.
On Tuesday however, they all woke up to an unmistakable message on the scheme’s website.
“Dear members; As usual in the New Year season, the system is experiencing heavy workload. Moreover, it has to deal with constant frenzy provoked by the mass media.
“The things are still going well; the participants feel calm, everyone gets paid – as you can see, there haven’t been any payment delays or other problems yet – but it is better to avoid taking risk (moreover, there are almost three weeks left to the New Year).
“Hence, on the basis of the above mentioned, from now, all confirmed Mavro will be frozen for a month. The reason for the measure is evident. We need to prevent any problems during the New Year season, and then, when everything calms down, the measure will be cancelled (which we will definitely do).” read the detailed message informing participants that they could no longer cash in their Mavro (until January).
The panic was intense for some, especially new investors who usually bear the brunt when such schemes crash. Business Hallmark spoke to a number of investors and their reactions varied from desperation, uncertainty to indifference and hope.
Evelyn, a 30-year-lady who works on contract for one of the country’s telecommunications giants said she had initial reservations about investing her money in the scheme.
According to her, she could simply not understand how a system that had no business model, no investment and is not involved in any form of trade would be able to pay 30 percent on investments, 10 percent in referral bonuses and other sundry payments, especially to guiders each month, but after seeing her colleagues invest and make huge returns, she was lured into it.
From last week when the scheme suspended withdrawals, Evelyn has been in deep anxiety, fear and now racing towards depression.
“I have always wondered how this is possible,” she told Business Hallmark. “People invest N100,000 for instance and in one month they are making N180,000 to N200,000 from referral bonuses and interests, and it is not as if MMM is doing any business.
“It was simply strange, I had said I will not get involved, but I couldn’t maintain that stance for long. My colleagues in the office who had joined were making lots of money, the lure became irresistible,” she says. “Now I regret that decision.”
“I joined in October with N100,000 and in November, I made N140,000. Then I invested another N500,000, registered my younger sister and paid N100,000 on her behalf. My intention was to request for the money with the accompanying interests on December 15th, but with this news, I am devastated.
“This is my life savings, I had to even borrow N50,000 to make up the money hoping to pay back when I withdraw. I don’t know what to do now,” she lamented.
Juliet Efe, a mother of one had a similar story to tell. She had to resign from her teaching job in Lagos because she had no take care of her child since she had no house help and the pay was meagre, and upon discovering MMM in August, she found an easy way to make money, so she thought.
“I started participating with N10,000, in August because I didn’t have a lot of money. I made about N15,000 from it and subsequently deposited N20,000. Because I had registered some people under me, I was able to get N50,000 overall in October.
I thought, wow, this is good. Even my husband who is an accountant and had kicked against it, bought into it.
“In November, with his support, I put a total N100, 000 on my account, plus N80, 000 on my mum’s account I’m operating on her behalf and another N20,000 on my daughters account, hoping to withdraw on Tuesday December 13, but I was in for a shock. I was told I couldn’t withdraw until January.
“I am panicking,” she confesses, “I hope the freezing is not going to be permanent. That money was supposed to be for our house furniture. I put it in MMM hoping to do it in January,” she said.
Juliet is not bothered only about MMM, she had also invested N12,500 in a similar ponzi scheme, Ultimate Cycler, an investment which like MMM now faces an unknown fate. The operators had closed the website for over a month now saying it is only for an upgrade.
But as days turn into weeks, and weeks into months, it is dawning on thousands of Nigerians who like Juliet paid N12,500 with the hope of making N50,000 in two weeks that they may have been ripped off.
“My N12,500 is still in ultimate cycler. I don’t even know the fate of that one,” Juliet says.
“It is only the home page of the website being displayed with the CEO’s message that there is an upgrade and all that. It is only when you register someone that you can get your money back, but no more matching of people. I’m so regretting the day I joined. It’s so painful.”
Another MMM participant, Kemi, a staff of one of the country’s new generation banks was in tears when she told her story. She had invested N2million using different accounts with the hope of getting huge returns, a hope now turning into despair.
On Wednesday last week, news filtered through that a man identified as Adakole who had scheduled a wedding for next week, and had invested N300, 000 with the hope of making returns before the wedding drank insecticide in an attempted suicide after he realized that his hopes had been dashed.
Lagos based trader, Kingsley Eze said he had only joined MMM in the first week of December with the promise to pay N100,000 after he was encouraged to do so by a friend, Johnpaul. About seven days later, he was matched to pay and he did.
“I hope my money has not entered voice mail?” He asked, expecting reassurance. “I don’t know why it is now that I have decided to join that story will come into it. I don’t want to lose that money.”
It is indeed late arrivals like Kingsley who are likely to feel the impact. Older participants, some of whom had made a fortune before the supposed crash could care much less.
A middle aged man, Mr. Ome Adolphus said he started in April with N120,000, but has presently made over N3million mostly from referral bonuses.
“I have N200,000 trapped in the system,” he said. “But really I have no reason to complain. I have made more than N3million.
“I hope it comes back in January as promised, I pray so and I am hopeful, but like I said, I am not that worried. ”
Others like Miss Oyiwodu Aje are largely indifferent.
“At first I was indifferent,” she said, “But when people started calling me, I became a little concerned, more about them than for myself.
“For most, it is their first time and for some, they put in more than they should have. On a scale of one to 10, my fear is on three
“I have N70,000 in the platform. I paid 50 before, then 20 yesterday (Tuesday).”
There are still on the other hand, those, especially guiders who insist that the system has not crashed and would return in January as promised. They have continued to encourage other participants to stay calm as according to them, everything will return to normal in January 2017.
“Many have misinterpreted it (the freezing of Mavro) to mean MMM has been suspended for a month, but the part which made people think that is quoted as follows: “Hence, on the basis of the above mentioned, from now on all confirmed Mavro will be frozen for a month,” wrote a guider, Blessed Imeh
“Please this statement does not in any way mean that MMM activities have been suspended for a month, it only means that the usual two weeks release date will no longer hold, your Mavro must complete a month.
“All get help are still going to be paid, if you provide help today, your release date will be one month from now; keep providing and getting help.”
In the midst of the confusion, Mr. Chuddy Anayo Ugorji who is believed to be the pioneer of the scheme in the country also came out to douse tension by giving explanation of what happened.
“The message does not say that nobody will be able to GH (get help) until January, instead the message is saying that you will not be able to GH until after 30days that you actually made the payment of your PH (provide help) and the recipient confirms; meaning that your money must actually spend minimum of 30days outside.
“So for example, if you PH N100,000 on 5th November, and you are matched to pay on 10th November, assuming that you made the payment but the recipient does not confirm your order until 15th November when he finally confirms receipt of your payment. From that instant (15th November), your mavros will change status to “confirmed” ( irrespective of colour Blue or Green ).
“So you will only be able to request for help (GH) on that particular N100,000 plus 30 percent growth as from 15th December. It is not that you can’t GH before January,” he said.
However, Mr. Aye Dee, a Nigeria based in South Africa has explained that the scheme crashed in South Africa under similar circumstances, and told Nigerians that it has actually crashed.
“This is how MMM crashed in South Africa in May,” he wrote with his twitter handle.
“MMM SA announced a freeze, just like MMM Nigeria did in December, it is still frozen.”
Meanwhile, it is being alleged that Ugorji has raked over N5billion within a year from the system and had collected nearly N1billion up on December 8 before announcing the freeze.