Top bankers divert depositors’ funds to MMM – Investigation

Top bankers divert depositors’ funds to MMM – Investigation

  • Subscribers risk losing N100bn investment in Ponzi scheme

Despite the ‘caveat emptor’ (buyers beware) that the Central Bank of Nigeria and the Securities and Exchange Commission declared over the Russian Ponzi scheme, Movrodi Mondial Moneybox, investigations revealed that top bankers had diverted depositors’ funds running into billions of naira into the scheme.
This was just as over two million Nigerians have invested about N100 billion in the scheme in the last seven months.
While these Nigerians argued that MMM, which had failed and allegedly been banned in Russia, South Africa and Zimbabwe, among others, had brought relief to them, findings by The Point revealed that officials of commercial and microfinance banks were also feeling the heat of the effect of the scheme on their operations.
Subscribers argeud that the scheme returned 30 per cent or more on their investments, especially in the heat of the current economic recession.
Meanwhile, bank managers, especially in developing areas, continue to bemoan sharp drop in the demand for their products like thrift collection, children, student, youth and entrepreneurs support initiatives, just as their counterparts in the MFB sub-sector have also witnessed what they described as a ‘near-crash’ of the depositors’ funds warehoused by the grassroots’ financial institutions.
A top official of one of the commercial banks along Lalubu road, Abeokuta, Ogun State, told The Point that daily deposits, made by the customers of the bank, especially among the youth and artisans, had dropped by over 50 per cent.
According to him, about 40 per cent of the students of Moshood Abiola Polytechnic, Abeokuta, who make deposits in the bank’s Campus Hype have abandoned the accounts for MMM.
He said that ironically, artisans that had applied for quick loan facilities with the bank called, asking the bank to cancel their applications, saying that they had seen a greener pasture.
Our deposit base had dropped in the last six months as most of our marketers that collect thrift from customers returned empty handed. The Central Bank of Nigeria should do more than warning the investing public, but must shut the website before we are frustrated out of business,” the banker told The Point.
The manager of one of the MFB around Kugbo, Abuja, Federal Capital Territory, who pleaded anonymity due to the sensitivity of the issue, also frowned at the activities of the Ponzi scheme and disclosed that the grass root bank had lost about 40 per cent of its customers to the ‘wonder bank’.
“Before now, most of the depositors had been complaining about our high lending and low interest rates, which they claimed was affecting their businesses, but as soon as MMM became popular, they abandoned their accounts and subscribed to the illegal investment platform,” he said.

Top sources across the banking sector told The Point that many bankers engage in MMM and in most cases they illegally diverted depositors’ fund to the scheme, as a result of laxity on the part of some officials in the internal control departments at various levels.
A good number of the bankers in question, The Point’s findings showed, had invested funds in billions of naira in the scheme, reaping Returns on Investment worth several millions of naira without the consent of the managements of the banks.
Instead of investing in the scheme from one account, where they stand to make 30 per cent ROI within 30 days, the unrepentant officials spread the fund using about 10 different accounts to increase their profit to 300 per cent or more.
Investigations revealed that while some of them had refunded the depositors’ fund, which was the initial capital, and now use the profit made on the investment to make more money, other greedy bankers had not only failed to refund the stolen money, but instead they spend the profit made from the illicit deal on clubbing, automobiles and acquiring property in highbrow areas. “
We are investigating a senior manager that allegedly diverted depositors’ fund worth N30 million to MMM. We do not know how much he had made from the fund, but there are allegations that he bought landed property in some parts of Lagos and in his hometown and moved his family from Ojodu, Berger to Magodo Phase II. Already, the bank had paid the customer, but the manager and his guarantors would refund the bank and the case would be reported to the Economic and Financial Crime Commission,” a top executive in one of the banks with its headquarters close to Lagos Independent Power Plant, Marina told The Point.
Another top executive in an old generational bank, with its headquarters close to The Nigerian Stock Exchange, Marina, Lagos, disclosed that there was a case of fraud perpetuated by one of the bank’s branch managers in Oregun, Lagos. Though, he admitted that there are no proof that the missing N10 million was diverted to MMM, but some of his staff in the branch confirmed that it was the manager that introduced most of the branch staff to the Ponzi scheme.

Meanwhile, economic experts and industry watchers across the country have blamed the development on the Federal Government, who they argued is only strong in fighting corruption, but weak in curbing activities of foreign fraudsters.
Contrary to the allegations that the CBN and Securities and Exchange Commission had failed in their regulatory functions to protect unsuspecting Nigerians, the experts argued that the regulators had warned Nigerians against the scheme when they declared a caveat emptor, which is what they are empowered by law to do.
Anything outside the warning, they insisted, is illegal. For instance, a United States-based economist, Ms. Bunmi Adeyemi, explained that the regulators had done what they are empowered by law to do and that prosecution or outright ban of Ponzi schemes is the function of the Federal Government.
According to her, it is shocking that the government that frowned at corruption and also admitted that there is economic recession, would allow some international fraudsters into the country in disguise of helping the people. To her, the Russian founder of the scheme, Mr. Sergey Mavrodi, had studied the Nigerian market and observed that Nigerians are gullible, especially to investment schemes that offer juicy ROI, adding that that was the reason the Russian mathematician created the acclaimed ‘help community’.
Having defrauded Russians of about $1.5 billion in 1994, which led his victims to committing suicide, the governments of China and Republic of Bitcoin banned MMM in January and April 2016 respectively. Going by this antecedents, “I expect Nigerians to wise up and shun the scheme. If same fraud allegations rocking MMM in South Africa, Zimbabwe is not convincing enough to the Federal Government to warrant an outright ban of the scheme, the public should use their common sense to take their hard earned money from the platform before the boat capsize.
“I am optimistic that the founder must have planted some of his allies, who are Nigerians, in the platform. What they will do is pair unsuspecting Nigerians with the allies, asking them to pay certain money in their accounts and as soon as that is done, they abscond. The unfortunate thing is that it is impossible for the subscribers to trace themselves when the chips are down and the founder would claim innocence, because he had never collected any fund from anyone,” she warned.
Similarly, senior lecturer, Department of Economics, Ekiti State University, Dr. Kola Afolabi, although blamed the government for the development, but not for its negligence in banning the scheme, rather for the increasing poverty level in the country.
To him, the government had failed to do the needful at the right time and that is the reason Nigerians would subscribe to such money ‘doubler’.
“If the economy is down due to the failure of the leaders and you are warning citizens not to take certain risk, they would not listen, because you have not offered them alternatives,” he stated.

Contrary to the expectations of the regulators, who have warned investing public against the scheme, over two million Nigerians that have subscribed to the Ponzi scheme are not in any hurry to abandon the scheme, especially when most of them have made fortunes from it after they had attracted friends and relatives to what they described as a safe haven for investors.
A manager in one of the food conglomerates in Nigeria, Mr. Kehinde Oke, told The Point that there is no going back for him and his friends, irrespective of the warnings issued by the government.
“Last month was the first time I did not borrow money from my wife before I collected my salary and this was possible because of MMM. I have made over N300,000 profit after three months. Government should channel its energy to its anti-corruption campaign and leave us alone,” he insisted.
Another subscriber, Mrs. Yemi Obe, disagreed with the CBN and the SEC that MMM is a Ponzi scheme, arguing that it is a community of honest, sincere and faithful people.
“What makes it works best is that there are set of rules that must be followed by every member of the community. The rules/laws are enforced and everyone abides by it, unlike Nigerian laws that even the lawmakers violate,” she stated.
Similarly, other subscribers to the scheme insisted that it has been a blessing in disguise to Nigerians who are suffering from the mistakes of past leaders.
“We saw government’s threats as an empty one and that is because it is the enemy of the common man trapped in financial slavery. The truth is that these threats would always be there, but they can never discourage us. Let us remain calm and stand for what we believe in and has worked for us,” one of the MMM administrators, Mr. John Adetunji, told The Point.