Vanguard's Yinka Odumakin wrote:
Those who were in Lagos around 1991-2 would remember Forum Finance located on Allen Avenue in Ikeja,a company that employed a number of young men and women in flashy cars going about town duping the gullible of their hard earned money .Its famous advert was “Forum go double your money!”. It paid outrageous returns to its earlier investors and this made many fools to part with their money . By the time the bubble burst,it was sorrow and tears for thousands of unwary who lost their fortunes to the Ponzi scheme .
Ponzi schemes are named after Charles Ponzi, an Italian immigrant who perpetrated a legendary scam. Actually, he wasn’t the inventor of this type of scams – it was called “Robbing Peter to pay Paul” schemes – but his was so large that his name became synonymous with it. Ponzi started a business buying and selling a type of postal coupon and promised investors a 50% return on their money within 45 days (compare this to an annual 5% interest for bank savings account at the time).
Money from investors Ponzi’s early investors did get their money doubled and even tripled in a short amount of time. This, and glowing newspaper reports at the time about his company, the Securities Exchange Company got him a lot of money from investors. At one point, Ponzi took in $1 million in a three-hour period from investors. All in all, about 40,000 investors invested about $15 million in Ponzi’s scheme in nine months between 1919 and 1920 (about $184 million in 2017 value).
Failed Scheme: When it was discovered that Ponzi was paying old investors with money from new ones, his scheme collapsed and he was sent to jail … for five years! After serving his federal sentence, Ponzi was sentenced by the State of Massachusetts for an additional nine years, but he skipped town. Ponzi ended up in Brazil, where he spent his last years in poverty and sickness. Before he died, Ponzi gave one last interview where he confessed to his crime.
“My business is simple. It was the old game of robbing Peter to pay Paul. You would give me one hundred dollars and I would give you a note to pay you one-hundred-and-fifty dollars in three months. Usually I would redeem my note in 45 days. My notes became more valuable than American money … Then came trouble. The whole thing was broken.”
...MMM surfaced in Nigeria in 2016 with a promise on 30 per cent return on any money into the scheme in 30days! The House of Representatives did one good in its life by warning people against this scam. It asked the Economic and Financial Crimes Commission, EFCC, and the Central Bank, CBN, of Nigeria to immediately go after the promoters Mavrodi Mondial Moneybox, otherwise known as ‘MMM’ in Nigeria. Lawmakers strongly opposed the investment scheme, which lately gained popularity among Nigerians in the wake of the current economic recession in the country.
The Chairman, House Committee on Telecommunications, Mr. Saheed Fijabi, had in a motion, drawn the attention of the House to the growing popularity of the scheme among Nigerians. “The scheme entered the Nigerian circle in 2016, capitalising on the high level of unemployment and poverty to deceive unwary Nigerians into falling prey to their antics”, Fijabi stated. He added that the fact that MMM was not regulated by law or approved by the CBN as a secure business venture, made Nigerians more vulnerable. Nobody did anything.
By December 2016 when the company froze the accounts of its 3m “muguns’ it had raked billions of Naira unhindered . The level of our ethical collapse was seen with images of worship places that should teach the right values about wealth creation organizing Ponzi seminars for MMM in their auditoria.
How low can it get for a country.
Our security agents who were raiding Bureau De Change operators months ago are not yet on record to have gone after the MMM operators who are not known to gave been licensed by the CBN to carry out any financial operations in Nigeria. Is there a government here?
My heart sank when I saw Nigerians in their hundreds dancing and holding a vigil on the eve of the January 14 promise by the Ponzi schemers to start another round of duping session.
My conclusion was that
these people are irretrievably damaged psychologically and it would take a major shock in the system to get them to reason like normal cognitive human beings on this side of eternity. Is their fault totally?
No,I think the wayward Nigerian system which places emphasis on “sharing” has turned them into playthings in the hands of scammer because of expectations of free money in the order of our allocation mentality .