THE forthcoming Christmas and New Year festivities will be bleak for the majority of Nigerians because of the economic recession currently ravaging the country. But there is an additional trouble, as the over three million Nigerians currently participating in the Mavrodi Moneybox Mundial (MMM) Ponzi scheme are in panic following its one-month freezing by its operators. MMM’s founder, Sergey Marvodi, explained that the measure was to ensure the sustainability of the scheme in 2017 and make it better, and that participants’ money would continue to grow, along with their bonuses which they would be able to cash out as from January 13, 2017. Indeed, in an open letter allegedly addressed to the Federal Government explaining how the scheme worked, Mavrodi said the scheme did not repatriate Nigerian money abroad. “The money is just redistributed among the citizens of Nigeria. It gets from those who are richer to poorer ones, in this way restoring social justice. What’s wrong with that? If you know what is right for people, why is life so bad in the country?” he queried.
To be sure, the major driving force in the MMM scandal is greed. Against the conventional native wisdom that whoever is in pursuit of freebies is actually in pursuit of ruination, Nigerians from all walks of life and academic, social and economic divides staked their hard-earned money in the Ponzi scheme, temporarily buoyed by the 30 per cent returns that it offered. The National Assembly was however forced to raise the alarm in September when it discovered the extent of participation in the scheme. The agencies of government, including the Securities and Exchange Commission (SEC), the Central Bank of Nigeria and the Economic and Financial Crimes Commission (EFCC) also alerted Nigerians to the dangers of the scheme, pointing out that they were handicapped in going after the perpetrators because of their anonymity.
However, in our view, government should have done more than it did, if only because one of its cardinal responsibilities is to protect the people against even themselves. As anyone familiar with the crime knows, the history of Ponzi/pyramid schemes has as its central figure, Charles Ponzi, a U.S-based scammer who shocked the world in the 1920s. Hiding under the banner of his Securities Exchange Company, Ponzi paid his agents generous commissions for every dollar they obtained and, by May 1920, he had made $420,000. Indeed, according to the United States Securities and Exchange Commission, the hallmark of Ponzi schemes is the promise of sky-high returns in a short period of time for doing nothing other than handing over your money and getting others to do the same, but the fraudsters simply use money coming in from new recruits to pay off early-stage investors.
Many Nigerians would remember the infamy committed in the early 90s by the notorious Ponzi schemer, Umana Umana, with his so-called Wonder Bank located on Aggrey Road, Port Harcourt, Rivers State. Umana told thousands of depositors that their money would yield 100 per cent interest within four weeks, and they could withdraw it together with the interest at the expiration of this period. Thousands of Nigerians then closed their accounts in the commercial banks and flooded Umana’s bank. Even soldiers jumped the queues in the bid to partake in the Umana largesse. The bank actually gave 100 per cent returns to a few customers, but it then collapsed. Umana would later be arraigned for operating a bank without a licence and flouting the regulations of the Central Bank of Nigeria (CBN). At the time he was picked up, security operatives told the nation that they had recovered about N77 milion from three of his houses, but Umana said the figure was higher. Sadly, that was the end of the story. Again in recent years, an untold number of Nigerians fell for the so-called “Pennywise” scheme which wreaked untold havoc and threw many homes into misery.
Given this historical background, the security agencies, taking advantage of available technology, should have shut down the MMM website before now, and arrested the brains behind the scheme. If anything, the recent experience in Zimbabwe where thousands of people lost thousands of dollars to MMM should have spurred a more serious action against the scheme. No serious society treats Ponzi schemes with levity, and 3.3 million Nigerian lives are no child’s play. Of course, the argument whether MMM has collapsed or merely shut down for a month is meaningless, because Ponzi schemes inevitably collapse irrespective of their initial successes. Thus, even if it ‘bounces back’ in January, it will still cause many Nigerians heartache in the months to come.
At a higher degree of delicacy, however, the MMM scandal indicates Nigerians’ loss of faith in the government and its programmes. If banks regularly fleece customers and the foreign exchange market is virtually groaning under the weight of regressive government policies, it would be quite hypocritical to expect Nigerians not to participate in any scheme offering proven relief, however temporary. Therefore, side by side with rooting MMM out of Nigeria, government across all levels owes Nigerians a duty to reinvent the wheel, govern with more seriousness of purpose and less selfishness, and ensure verifiable uplift in the living conditions of the average Nigerian. Needless to say, this is the time to act.
