The EFCC noted that the suspects defrauded their victims under the guise of forex trading.
A couple, Gloria Osei and Muyiwa Folorunsho, who operated Ponzi schemes are still large after they reportedly obtained Dominican passports to escape a manhunt by the Interpol desk of the Nigeria police to arrest and detain them for prosecution which includes defrauding investors N1bn.
A businesswoman, Chinyere EmekaAtu, was arrested following an accusation of defrauding traders and market women of over N600m in Lagos State.
The woman used her company, Family Food Support Association, to gather unsuspecting members of the public, including petty traders, to part away with N9,000 every month to get a higher return on their investments.
The victims were said to have been promised a return of N200,000 cash and N90,000 worth of foodstuffs after nine months of investments in the associations scheme.
But when EmekaAtu started defaulting in the payment of the promised money and donation of food items to those who invested in the scheme, the aggrieved victims reported the matter to the police.
In a similar twist, a Federal High Court sitting in Lagos State ordered the arrest of a Ponzi scheme operator, Victoria ImaseRegal, over alleged N36.45m fraud.
Commenting on why many Nigerians fall victim to Ponzi schemes, a financial analyst, Dipo Adeniran, told Sunday PUNCH that greed and poverty were two major factors.
He said, Greed is one reason for this.
They will tell you Everything in life is about gambling, you win some, lose some. Its an unhealthy mindset.
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Similarly, the cofounder of PennyTree, Adeleke AwotayoAyeni, in a Twitter space in April 2022 noted that financial illiteracy was a key reason many people were attracted to Ponzi schemes.
He said, For a firsttimer, I can say it is a mistake, maybe, due to misinformation, and lack of financial education but when one falls for a scheme a second time, it means the victim actually recognised the risk and decided to take it.
People often forget that just like any skill, one needs to have the financial knowledge to make sound decisions.
This development led to cases of suicide and attempted suicide among many citizens, who invested in the fraudulent scheme.
A report by the Norrenberger Financial Investments Scheme estimated that as of 2022, Nigerians had lost over N300bn to Ponzi schemes in five years.
Ponzi scheme operators
Section 38(1) of the Investments and Security Act 2007 prohibits the operation of Ponzi schemes.
The section provides that no person shall (a) operate in the Nigerian capital market as an expert or professional or in any other capacity as may be determined by the commission or (b) carry on investments and securities business unless the person is registered in accordance with this Act and the rules and regulations made there under.
After the infamous crash of MMM, online investment schemes have sprung up such as Loom, Twinkas, Donation Hub, Get Help Worldwide, Smile2Charity, Ultimate Cycler, Givers Forum, ICharity, Crowd Raising, Clarrita, and Help2Get.
Other schemes such as MyBonus2u, RackSterli, Quintessential Investment Company, Inks Nation, and Wales Kingdom Capital Limited preyed on Nigerians quest for financial freedom and their founders disappeared with the money invested by citizens.
In 2021, the Economic and Financial Crimes Commission disclosed that it arrested a couple, Emmanuel and Victoria Jaiyeoba, in Ibadan for defrauding investors in an N935m Ponzi scheme.
- Regulatory bill
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