Sunday, 21 February 2016

MMM Global confess that they're a Ponzi scheme

I got a message on WhatsApp from someone called Peter who is part of the MMM Global Ponzi scheme run by Sergei Mavrodi, the convicted Russian serial scammer. It's quite amusing to see if you can get them to explain where the 30% per month they promise actually comes from.
Peter: I thought I'll c u ystday at the MMM presentation @ yarona lodge
Richard: Were you organising it?
Peter: I was part of it....r u still not clear anout how it works or u had a clear understanding now?
Richard: Realistically, how much money is it possible to make from MMM?
Peter: It depends on how much u put in. From as little as 200 u get 30% per month that is compounded monthly...
Peter: So the little u put the little u get....
Richard: Wow. How does the money actually make more money?
Peter: MMM is a community where people are helping each other...u help smbdy tday and u get helped by smbdy tmrw! Money is rotating from participants and the 30% is calculated amongs participants!!
Richard: But where does the 30% come from?
Peter: From participants!!! Let's take an e.g of banks: if u have an acc with the bank and u using it jst for saving your money and smbdy needs a loan frm the very same bank the bank uses your money to loan that person that will be paid back with interest. So the bank is getting the money to loan other people from people with accounts on that same bank....this is the same bro
Richard: So in MMM you pay interest?
Peter: all NO!!!
Richard: You compared it to a bank where loans are "paid back with interest".
Richard: Banks make money by investing customer's deposits, charging interest on loans and from bank charges.
Richard: You haven't explained how MMM makes money yet.
Peter: Yep...all im trying to highlight by making e.g of the vank is that the banks depends on people to make money at a high rate of interest and here u dnt pay interest but your money grows...
Richard: But how does it grow?
Peter: Say u put 1000 as an e.g and u r to get 2200 on the 3rd month the 2200 will be calculated amongs member's participating in the system that gonna donate to u that kind of money u r to get.
Richard: But how does 1,000 grow to be 2,200?
Richard: Where does the additional 1,200 come from?
Peter: From participants...
Richard: From new participants?
Peter: New and MMM u can topup your acc anytym...
There it is. The confession.

The money that fuels the "growth" comes from new participants and older participants feeding the scheme with new money. That is the definition of a Ponzi scheme.

Of course soon will come a time when they can't find any new gullible recruits and the scheme will collapse. Just like Eurextrade did, just like ALL Ponzi schemes do.

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