Nigerians lose N300b to Ponzi schemes, speculative trade

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Guardian – Rising inflation, perceived poor performance of the capital market, as well as low returns on government securities, have exposed Nigerians to speculative and dubious schemes with victims suffering over N300 billion in the last five years.

Following the losses, experts have urged the Federal Government to create policies that will promote national development, tackle prevailing stock market volatility, restore the stock market to sustainable growth and make returns on investment in Federal Government bonds more attractive.

Notwithstanding some modest advancements in the equities market, the country’s investment climate has continued to witness the proliferation of illegal fund managers. This has become a source of worry to the capital market community.

Efforts by the Securities and Exchange Commission (SEC) to flush them out of the market have remained futile as promoters of the schemes continue to defraud millions of investors, who are promised mind-boggling returns on their investments.

Due to the unprecedented lull in the market, many investors expose themselves to scam investment and Ponzi scheme outfits that deceive them that their money would yield as much as 100 per cent in a short period. Such schemes with all the illegality and promises of unrealistic returns have burnt the fortunes of many ambitious investors.
Ponzi schemes, also known as pyramid investments, are a form of financial fraud that lures investors with the promise of high returns but often ends up giving no returns at all, with a possible loss of investors’ total capital.

This has been a recurring challenge and has of late grown aggressively as more Nigerians have fallen and are still falling victims to such schemes.

The Guardian gathered that of the N300 billion lost by millions of Nigerians to Ponzi schemes in the past few years, over 2,000 speculators lost N900 million to Yuan Dong Ponzi. Also, Galaxy Transport Ponzi schemes defrauded victims of N7 billion while N2 billion was lost to Famzhi Interbiz Limited. Nigerians who invested in Cowlane and Dureil also lost N100 million to each of the outfits.

For the infamous Mavrodi Mundial Movement (MMM) that operated between 2015 and 2016, three million investors lost N18 billion. Nospecto investors also lost over N106 billion within the same period.

The Nigeria Electronic Fraud Forum, which was unveiled in 2017, stated that the Nigerian investing public also lost another N11.9 billion to the MMM.

The SEC recently announced that the Ponzi scheme outfit currently under its investigation is the ‘grand-daddy of the fraudsters, stating that the promoter is estimated to have collected over N147 billion between 2019 and 2020.

SEC said: “There is an online Ponzi scheme under our investigation. Some of those who have suffered from these schemes have been heartbroken; some have committed suicide.”

The latest incident, which involved a case of suicide has to do with four investors who were defrauded through an advertisement placed by a company on radios, podcasts and other social media platforms, calling for participation in the company’s various investment plans, which included: logistics/bike investment, customer relationship management investment, education virtual reality for students investment, location sponsorship investment, real estate and independent investment, with returns hovering between 60 to 110 per cent.

The deceased was said to have taken a loan of undisclosed millions of naira from the bank, which he invested in the company. About three others also attempted to take their lives when they could not withstand the pressure from the banks where they took loans.

Among those who invested in the company were: Agboniffo Ohis Iyawere, who put N3,340,000 into the business, while Victor Okinedo staked N15,340,000. Chibueze Amuchie lost N800,000. Bazuaye John and his family and Obiakor Elochukwu Pious and his wife invested N25,081,000 and N44,900,000 respectively.

Another victim, Enokela Monday, a 100 level student of Air Force Institution of Technology, Kaduna, invested N1.5 million, meant for his school fees, rent and loan he collected from his friend.

Recently, victims of the N123 million MBA Forex Scam stormed the headquarters of the Economic and Financial Crimes Commission (EFCC) to demand the arrest and prosecution of the company’s Chief Executive Officer, Maxwell Odum.

The protesters alleged that they were defrauded of a whopping sum of N122.51 million in a scheme promoted by the firm with a promise that they would be getting a 15 per cent return on investment every month. The company had since reneged on its promise on payment of returns, according to the protesters.
Already, the EFCC has arrested and is prosecuting about 10 Ponzi scheme operators who have allegedly fleeced Nigerians of over N12 billion between October 2020 and August 2021 after most of the operators had promised their victims’ attractive returns on investment (ROI) as high as 55 per cent after their first month of investment, a bait swallowed by thousand Nigerians who have since got their fingers burnt.

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