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.
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