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By Chinwendu Obienyi
Rising inflation and financial losses from the capital market as well as the ineffectiveness of monetary policies have exposed Nigerians to Ponzi schemes and related frauds across the country with victims losing over N900 billion in 23 years.
This was stated by the Director of the Bank Examination Department, the Nigeria Deposit Insurance Company (NDIC), Michael Oladele, during the 2022 workshop for financial correspondents and business editors which held in Port Harcourt recently.
This was even as the NDIC stated that it is in discussions with the Securities and Exchange Commission (SEC) and other regulatory bodies to wedge a tougher battle against Ponzi scheme operators.
Delivering a paper titled; Rising Ponzi Schemes and Investment Scams in Nigeria, Oladele, said Nigerians have lost at least N911.45 billion to different Ponzi schemes and related schemes in the last 23 years, adding that there is paucity of data on Ponzi frauds in Nigeria possibly due to under-reporting or even wrong classification.
He revealed that N700 billion has been trapped in private placements in Nigeria, investors have been swindled over N18 billion, N171 billion and N22.45 billion from the Mavordi Mundial Moneybox (MMM) scheme, MBA Forex and Nospecto scheme.
Offering insights into the modus operandi of the scheme, Oladele said the schemes come with abnormal accumulating returns or capital gains on investments, re-investment to sustain the live-wire of the scheme and persuasions from friends and family to participate in the scheme.
He also added that celebrity endorsements, greed, regulation arbitrage, economic hardship and others have enabled the rise of Ponzi scheme, stating that the Federal Government in collaboration with SEC and Central Bank of Nigeria (CBN) has implemented strategies to prohibit these activities.
“Yes, we are in constant discussions with other agencies to see how best we can reduce these schemes from thriving. We, ourselves have encouraged the public to report such “wonder banks” via our website”, Oladele said.
He insisted that counteractions by the targets, who bear much of the brunt of the scams, are required to expose and prosecute suspects. According to him, there is much the public could do to evade the antics of Ponzi scheme traps, as it is a conceptual fraud.
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