Maya Fischer-French, Personal Finance Journalist, gives us the lowdown on what's at the heart of the MMM pyramid scheme.
Fischer-French says the man at the centre of the MMM scheme, Russian Sergei Mavrodi, did this in Russia on a grand scale. She says they estimate it cost investors $10 billion. But, she says no one really knows, because no one admits to being involved.
He was arrested, convicted and served time. But, once he was out, he started all over again.
He's been around., reinvented himself, and lost people's money.— Maya Fischer-French, Personal Finance Journalist
It sounds all very safe and sweet, but if you go look at their website, with its promise of 30% return a month...those are red flags.— Maya Fischer-French, Personal Finance Journalist
She says she is only starting to unpack this whole scheme, but like all pyramid schemes, it is going to collapse.
she says the SA branch are making big efforts to say it has got nothing to do with what is going on with MMM internationally.
There is no organisation to go to really, these are not easy things to unwind and find out what is going on...it is important to spread the warning.— Maya Fischer-French, Personal Finance Journalist
There is going to need to be a lot more peeling away of the layers of this onion, but she says, it is undoubtedly one of the largest pyramid schemes created.
This article first appeared on 702 : How to avoid being scammed by MMM style schemes