Basotho warned of Ponzi scheme
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.