Ba­sotho warned of Ponzi scheme

Lesotho Times - - Front Page - ’Marafaele Mohloboli

THE govern­ment has been warned to in­ter­vene and fore­stall the op­er­a­tions of a likely pyra­mid scheme run by a con­victed Rus­sian crim­i­nal, which has been op­er­at­ing in Le­sotho and has most prob­a­bly raked in mil­lions from un­sus­pect­ing Ba­sotho in­vestors.

The scheme called mmm Global prom­ises in­vestors un­re­al­is­tic re­turns of up­wards of 30 per­cent and is mod­elled along mkm, which promised in­vestors un­sus­tain­able re­turns un­til it went bust in 2007, leav­ing about 400 000 Ba­sotho high and dry.

But more omi­nously for mmm Global in­vestors, the scheme is founded by one sergey mavrodi, who used it to de­fraud Rus­sian in­vestors in the 1990s, of tens of mil­lions of mal­oti be­fore he was caught, con­victed and jailed for four-and-a-half years. even though mr mavrodi was im­pris­oned for de­fraud­ing 10 000 in­vestors specif­i­cally, in­ter­na­tional Press re­ports say more than 15 mil­lion Rus­sians suf­fered and went bank­rupt from deal­ing with him.

mr mavrodi’s mmm scheme, which bears an un­canny re­sem­blance to mkm, re-sur­faced in 2011 but south African au­thor­i­ties were re­cently warned of it by their Rus­sian coun­ter­parts af­ter mr mavrodi started vig­or­ously lob­by­ing south Africans to in­vest in the scheme. He has posted a video on the com­pany’s web­site to help in­vestors want­ing to par­tic­i­pate in the scheme.

south Africa’s Na­tional Con­sumer Com­mis­sion (NCC) has al­ready con­demned mr mavrodi’s pro­ject as an il­le­gal Ponzi scheme and urged cit­i­zens to shun it while in­ves­ti­ga­tions are un­der­way.

said Trevor Hat­tingh, spokesper­son for the NCC to the south African me­dia: “Con­sumers are strongly ad­vised not to par­tic­i­pate in what could very well be an out­lawed pyra­mid scheme, where their monies could in all prob­a­bil­ity, be lost.”

But this has not stopped Ba­sotho in­vestors from throng­ing the scheme which held an event at­tended by thou­sands at maseru club last satur­day. The gath­er­ing was graced by prom­i­nent south African mu­si­cian Doc­tor malinga, who pro­vided en­ter­tain­ment while food and drinks flowed seam­lessly. The scheme’s pro­mot­ers ex­plained its work­ings which are wholly in­ter­net-based.

Con­sumer Pro­tec­tion As­so­ci­a­tion Di­rec­tor and so­cial ac­tivist, Lehlo­honolo Chefa, has warned Ba­sotho against in­vest­ing in the scheme while urg­ing the govern­ment to take de­ci­sive ac­tion to stop it from op­er­at­ing in Le- sotho.

“it ap­pears Ba­sotho will never learn as they be­lieve in quick cash. it angers me as an ac­tivist to see that the au­thor­i­ties are quiet on this mat­ter and yet it’s very ob­vi­ous that this pro­ject is sim­i­lar to the mkm one that shat­tered many peo­ple’s dreams and left them bank­rupt….,” said mr Chefa.

He said some peo­ple par­tak­ing in mmm were very ex­cited be­cause they were still get­ting their monies. “No one is com­plain­ing at the mo­ment, but just wait and see the day this scheme col­lapses. it’s only then that they will start com­plain­ing.

“We have seen this be­fore and we are go­ing to see it again un­less the Cen­tral Bank and the min­istry of Fi­nance in­ter­vene to halt the scheme.

“We are liv­ing in an era of ter­ror­ism, cor­rup­tion and great un­rest, and who knows if our peo­ple could be fund­ing ter­ror­ist groups or of­fi­cials en­gag­ing in money laun­der­ing with­out ac­tu­ally know­ing it……?”asked mr Chefa.

mul­ti­tudes of Ba­sotho showed in­ter­est in in­vest­ing in mmm af­ter at­tend­ing its en­ter­tain­ment-filled event at the Maseru Club Grounds this past satur­day.

Warn­ings against mmm Global by south African au­thor­i­ties ei­ther seem not to have reached Ba­sotho at all. if they did, the warn­ings seem to have largely gone un­heeded. many Ba­sotho seem to have al­ready in­vested in the scheme though it is not pos­si­ble to quan­tify them due to the opaque­ness of mr mavrodi’s pro­ject.

For ex­am­ple Leah Ntoi, an in­vestor in mmm, de­scribed it as a pro­ject worth tak­ing a risk for.

“i know all about mkm, but i am pre­pared to take a risk on mmm. since i joined in May last year, I con­fi­dently fore­see my­self be­com­ing rich. i am go­ing to buy a car in march…..,” said ms Ntoi.

“Life is all about risks and i have taken a leap of faith by in­vest­ing m5 000 at a re­turn of 30% which would have grown to m53,000 in march 2016.”

An­other par­tic­i­pant who pre­ferred anonymity said: “i don’t know why peo­ple are so neg­a­tive and wor­ried about our money. They are al­ready putting the cart be­fore the horse. This is our money and if we lose it, then that’s our baby. so get a life and join mmm if you want to get rich or back off. mmm is not for the faint-hearted.”

mmm op­er­ates en­tirely on­line, thus mak­ing trans­ac­tions dif­fi­cult to track. One reg­is­ters on the web­site and is al­lo­cated a per­sonal of­fice code which they use to log in.

in­vestors are then paired with one an­other and en­abled to trans­fer money to each other. suc­cess­ful trans­ac­tions be­tween the anony­mous in­vestors are fol­lowed by no­ti­fi­ca­tions say­ing the in­vest­ments would grow by 30 per­cent monthly.

“You at­tach proof of pay­ment and once this is con­firmed by the sys­tem, you can ac­cess your money im­me­di­ately if you want,” said ms Ntoi. One is en­ti­tled to 30% in­ter­est re­turn and if it is money to the tune of m1, 000 there is also an ex­tra bonus of m20 paid to the in­vest­ing client.”

’maler­ato Ntho, one of the man­agers of mmm in Le­sotho, who re­cruits and as­sists prospec­tive in­vestors who can­not use the in­ter­net, de­scribed it as the best scheme ever that’s meant to bet­ter Ba­sotho’s lives.

“What is even nice about it is the fact that there is no cen­tral ac­count where the money is de­posited, so there is ba­si­cally no way any au­thor­ity can close it down,” ms Ntho said. she added like her, one could eas­ily be­come a man­ager at mmm by un­der­go­ing a 10-day on­line course meant to equip in­di­vid­u­als with skills to re­cruit and as­sist in­vestors.

she said last satur­day’s event was meant to re­cruit more in­vestors and be a to­ken of ap­pre­ci­a­tion to mem­bers who were as­sist­ing each other in the scheme.

Cen­tral Bank of Le­sotho pub­lic re­la­tions of­fi­cer Moroke Moroke said the in­sti­tu­tion was aware of the mmm scheme and was “work­ing on it as a mat­ter of ur­gency and will deal with it ac­cord­ingly.”

CON­SUMER Pro­tec­tion As­so­ci­a­tion Di­rec­tor, Lehlo­honolo Chefa

CON­SUMER Pro­tec­tion As­so­ci­a­tion Di­rec­tor and so­cial ac­tivist Lehlo­honolo Chefa.

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