By Chinelo Obogo
Nigerians have lost over N93.72 billion to Ponzi schemes and other financial fraudulent activities between January 2023 to December 2024, Daily Sun can report.
This brings the total amount lost to over N1, 005,170,000,000 in 25 years.
Scammers and fraudulent schemes continue to exploit loopholes and unsuspecting victims and the rising trend has sparked concerns over the need for stricter regulations and public awareness to curb the growing horror.
In December 2022, the Director of the Bank Examination Department at the Nigeria Deposit Insurance Company (NDIC), Michael Oladele, made a startling revelation about the widespread financial losses people have suffered due to numerous Ponzi schemes and related frauds in Nigeria.
He disclosed that a staggering N911.45 billion had been lost to fraud across the country over the past 23 years, saying that this huge amount would no doubt have a devastating impact on the victims and the country’s economy.
Ponzi or pyramid schemes are often deceptive arrangements in which people are usually promised high returns with little risks. Its modus operandi centers on the recruitment of new members rather than selling actual products or services. Participants are usually required to recruit new members in order to ‘cash out’ and each new recruit pays an initial fee or ‘investment’, a portion of which is used to pay returns to the earlier participants. These schemes are different from multi-level marketing (MLM), which usually involve the sale of actual products or services, although some MLMs have been accused of operating like pyramid schemes.
Though there is also no publicly accessible database specifically tracking Ponzi schemes in Nigeria as many of these schemes operate in the shadows and go unreported or undetected, Daily Sun tracked some of the cases that have been reported between January 2023 and December 2024.
To protect Nigerians from falling victim to these schemes, in March 2023, the Senate passed the Investments and Securities Amendment Bill (ISB) 2023 into law which prohibits the operation of Ponzi and other illegal investment schemes while prescribing a jail term of not less than 10 years for promoters of such schemes.
But despite efforts by the NASS to tighten regulations, the problem of Ponzi schemes has persisted. Though the list is not exhaustive, in March 2023, a Federal High Court in Lagos State ordered the arrest of Victoria Imase-Regal, a Ponzi scheme operator, for allegedly defrauding individuals of N36.45 million. In May 2024, Justice Efe Ikponmwonba of Edo State High Court sitting in Benin-City convicted and sentenced Raji Onii and Udo-Iwe Raphael to two years imprisonment for fraud and ordered that the N10,917,357.00 recovered from them be returned to the victims of the crime.
On June 10, 2024, the Economic and Financial Crimes Commission (EFCC) secured the final forfeiture of N204,849,859.00, 15 properties, and eight high-end vehicles before Justice Inyang Ekwo of the Federal High Court, Abuja, for fraud victims. The properties, money, and vehicles were recovered from Jedidiah Ibrahim Ezenwa, which he illegitimately acquired through his companies: Jedidiah Cement Industry Ltd., Omega Global Resources, Jedidiah Universal Transport Hephz Ltd, Afrinvest Asset Management Ltd, The Gurguru Company Ltd, Josien Holdings Ltd, Prince Hephzibah Ibrahim Ezenwa, and Prime Ebulah Properties Ltd, from his victims, Ibrahim Amusan, Afri Invest Ltd, Joisen Holdings Ltd, and Jack Welch Petroleum Services Ltd.
In July 2024, Rufus John Isip and his company, ITM-IT Resources Limited, were arraigned before the Federal High Court in Uyo, Akwa Ibom State, on charges of operating a Ponzi scheme known as Vandera, defrauding investors of over N2 billion. In September 2024, Bliss Multinational Perfection and Arch Oyinmiebi Bribena, the Chief Executive Officer of Baraza Multipurpose Cooperative Society Limited, were investigated and indicted for investment fraud in which 123 petitioners lost over N2 billion to the suspects who promised them a 25 percent return on investment but neither received the promised return nor recovered the funds invested.
In October 2024, one Chinedu Okoronkwo was arraigned before the Federal High Court in Enugu on charges of operating a Ponzi scheme through Reliance Microfinance Cooperative Society Limited, defrauding investors of N71.58 million. By October 2024, the scale of such fraudulent activities had escalated when 2.7 million Nigerians lost N89.4 billion to a Ponzi scheme operated by BBHTV. The Federal Government had frozen the accounts of BBHTV, citing issues with the payment of Personal Income Tax. Just five months after commencing operations, BBHTV informed its victims that the Federal Inland Revenue Service (FIRS) had frozen its accounts. The faceless operators of the scheme claimed that these frozen accounts held a total of N89.4 billion.
Due to the increase in these fraudulent activities, the Senate on Wednesday, December 4, 2024, passed the investments and securities bill (ISB) 2024, to replace the Investments and Securities Act of 2007. The chairman of the senate committee on capital market, Osita Izunaso, said the Bill will protect the integrity of the security market against all forms of market abuse and insider dealing and prevent unauthorised, illegal, unlawful, fraudulent and unfair trade practices, relating to securities and investments.