Thousands of Zimbabwe people lose money to mmm

Thousands of people, among them civil servants
and vendors, have lost thousands of dollars to
fraudulent online pyramid scheme MMM Global
Zimbabwe after it collapsed recently. The social
financial network, which relied on an accelerating
number of new members to pay off the old,
abruptly terminated its services last week leaving
participants stranded.
This comes as Econet’s mobile financial service
platform, EcoCash yesterday distanced itself
from the pyramid scheme. Participants claimed
they were using EcoCash for their transactions.
Zimbabweans have in the past months been
joining the online investment scheme in droves in
a bid “to get rich quickly”. The Reserve Bank of
Zimbabwe warned people that the scheme was
fraudulent and there was no legal recourse in the
event they lost their money.
The central bank said MMM, which advertises its
operations through a website and recruiting
agents, was not a registered or regulated entity.
EcoCash yesterday said: “We have noted that
some of these pyramid schemes are allegedly
advertising in a manner that suggests that the
Ecocash facility is a medium for prospective
members to deposit their money. This is not
correct.
“We advise our valued customers and all
stakeholders that Ecocash is a licensed mobile
payment platform that enables customers to
make financial transactions such as sending
money, buying prepaid airtime as well as paying
for goods and services within the confines of the
law of Zimbabwe. EcoCash promotes safe and
legal transactions but will not be held liable for
any losses arising from the use of EcoCash to
engage in illegal activities such as Ponzi
schemes.”
The scheme advertises itself as a mutual aid
fund under which recruited members contribute
money to assist others and are promised
investment returns of 30 percent per month.
Some of the people left counting their losses told
The Herald that they received emails that the
scheme had been suspended until September 15.
“All along things were moving in the right
direction and we now have nowhere to claim our
investments,” said Mr Tinashe Muza of Harare.
“When we started putting our funds in the
scheme one could get assistance within seven
days but things later changed to 14 days and
when we were shut out the waiting period was
21 days. What it simply means is that the
number of people in need of help has
outnumbered the number of people joining. Right
now we have nowhere to get our money which
we invested.”
MMM stands for Mavrodi Mondial Moneybox and
takes its name from its founder, Sergei
Panteleevich Mavrodi of Russia. He founded
MMM in 1989 and the scheme was declared
bankrupt three years later leading to the
disappearance of Mavrodi until his arrest in
2003.
Another victim, Mrs Rosemary Mawonde said:
“We never thought the scheme would end this
way as we believed that by using EcoCash to do
the transactions, things were in order. I am
surprised that EcoCash is also distancing itself
from the scheme and it is clear that I will never
recover the $300 that I invested.”
While some people who were skeptical about the
scheme started with small amounts, it is believed
some poured in thousands of dollars anticipating
higher returns. The RBZ said the schemes were
fraudulent as existing investors were ‘paid money
not from genuine market investment of their
funds, but from contributions made by new
investors, until a point when the scheme can no
longer attract new investors,”
“The participants are made aware that they
make their money by recruiting new members
who in turn must recruit more members,” warned
the Central Bank.