Unic Press UK: Nigerian Deposit Insurance Corporation (NDIC) said circa three million Nigerians, who had invested funds in a Ponzi scheme known as MMM [Mavrodi Mundial Movement], have lost about ₦18 Billion.
The shocking revelation was made on Thursday, the 2nd March 2017, by the NDIC managing director Umaru Ibrahim, during his speech at the 38th Kaduna International Trade Fair.
In December 2016, when Unic Press UK perused the website of MMM, a shocking message was highlighted: “ATTENTION! YES, IT IS POSSIBLE TO GET 30% PER MONTH HERE, BUT THIS IS NOT AN INVESTMENT PROGRAM!”
The rate of return, 30% per month that MMM Nigeria claimed that it could offer was obviously ridiculous, and not a rate that any ‘legitimate’ financial body would be able to sustain over a short term, much less in the long term. In fact, at that period, the Monetary Policy Rate (MPR) set by the Central Bank of Nigeria was 14%.
What is a Ponzi scheme?
“A Ponzi scheme is an illegal business practice in which new investor’s money is used to make payments to earlier investors. In accounting terms, money paid to Ponzi investors, described as income, is actually a distribution of capital. Instead of returning profits, the Ponzi schemer is spending cash reserves, all for the purposes of raising more funds. Where a basic investment scam raises money and disappears the Ponzi scheme stays in business by circulating investor funds. There are usually little or no legitimate investments taking place. Most of the funds are used by promoters for expensive lifestyles and transferred into property or offshore accounts. Schemes typically run for at least a year, although some Ponzis have flourished for a decade or more.“ (Association of Certified Fraud Examiners, United States)
“A Ponzi scheme is a fraudulent investing scam promising high rates of return with little risk to investors. The Ponzi scheme generates returns for older investors by acquiring new investors. This is similar to a pyramid scheme in that both are based on using new investors’ funds to pay the earlier backers. For both Ponzi schemes and pyramid schemes, eventually there isn’t enough money to go around, and the schemes unravel.” (Investopedia)
