Too Good To Be True: How Mouth-watering Offers, Greed Land Nigerians In Phoney Ponzi Schemes

The recent collapse of investment platforms, including National Reading Culture (NRC) and Tag Investment, has left many Nigerians counting their losses, reviving painful memories of the infamous MMM scheme, which crashed in December 2016. FELIX IGBEKOYI, Asaba; FEMI OYEWESO, ABEOKUTA; Nnamdi Mbawike, Enugu; and ACHOR ABIMAJE, Jos, report.

Poverty, greed, and desperation for quick money have continued to fuel the fraudulent activities of scammers running Ponzi schemes.

It would be recalled that in December 2016, MMM gave a bitter Christmas gift by freezing the accounts of people on its platform. More recently, the National Reading Culture (NRC) and Tag Investment platforms disappeared, taking people’s funds. Why don’t Nigerians learn from these bitter experiences? A smartphone dealer in Gombe State, Abdullahi Sani, who invested in the MMM platform a decade ago, said he was lured by promises of unusually high returns, only to discover that his savings had vanished without warning.

Sani, a resident of Wuro Biriji in Gombe metropolis, said he invested a substantial portion of his business capital after friends assured him the platform was genuine, citing payouts to early investors.

“I have not invested any money in NRC, but I joined MMM at the time because I saw people making money. I invested my savings in the hope of improving my business, but everything disappeared with no return. It has been a painful lesson,” he told LEADERSHIP Weekend.

A Gombe-based entrepreneur and computer expert, Ahmed Muhammad, attributed the recurring trend to worsening economic hardship, unemployment and low financial literacy. According to him, many Nigerians are vulnerable to fraudulent investment schemes because they are desperate for alternative sources of income and often ignore warning signs. He urged the public to be sceptical of any investment promising guaranteed or unusually high returns within a short period.

Mohammed also emphasised the need for sustained financial education, saying investors should verify that the relevant regulatory authorities have licensed investment firms before committing their funds.

He noted that legitimate investments carry risks and do not guarantee extraordinary returns, urging schools, financial institutions and government agencies to intensify public awareness campaigns on safe investment practices

Ronke Adeseye, a victim of a Ponzi scheme, narrated that contrary to public perception, falling victim to fraud is not a sign of stupidity but the result of psychological manipulation.

She revealed that she was introduced to MMM in 2016 by a friend. Her friend, Mary, deposited N500,000 and was paid N900,000 within a week.

According to her, the weapon of greed and fear of missing out, “double your money quickly” Ponzi schemes, fake crypto investments, and “wonder banks” thrive on this tactic. “They promise outrageous returns: ‘Invest N200,000 today and get N400,000 in one week!'”

“I was tempted and challenged. I then deposited N500,000 and was paid N1,000,000. Joyfully, I deposited the N1,000,000 and received N2,000,000. I sold my land for N10,000,000, hoping to get N20,000,000, but was disappointed, and it almost cost me my life.”

“I lost my business, my property, and almost my life from shock. I didn’t know how I ended up in the hospital, where I was admitted for almost three months. I learnt a bitter lesson because everyone was kept away from the deal until the bubble burst,” Ronke lamented.

A banker, Bright Sologo, said scammers study how people think, what they fear, and what they desire, then exploit this knowledge to trick even the most intelligent and careful individuals.

He said Nigerians would continue to fall victim because of secrecy, as some are too hidden to face their families and tell them what is running through their minds.

“Scammers don’t target ignorance; they target emotions. Everyone, educated or not, can have fears, greed, pressure or trust issues.

“These criminals target innocent individuals seeking to conduct business online, then get a 10 gold profit.”

He stressed that this explains why bankers, lawyers, professors, business executives and civil servants sometimes lose millions to scammers.

He said most Nigerians don’t verify facts. “Fraudsters exploit the fact that Nigerians respect titles and institutions. That is why you must always verify independently.”

“Scammers know when people are under pressure or feel rushed; they stop thinking critically. They send alarming messages such as: ‘Your bank account will be blocked in one hour unless you confirm your PIN.’ ‘Pay today or miss out on this investment opportunity.”

According to him, by creating panic, they push victims into making hasty decisions. “Even when people know it sounds too good to be true, they invest out of fear of being left behind,” he said.

On the way out, he advised, “Don’t stay silent. Fraud thrives when victims remain secretive or silent after encountering a scam attempt. They don’t report to the relevant law enforcement agencies, even though the regulators are hardly known or traceable to a particular address.”

A Certified Finance, Business Management and Forensics Consultant, Dr Emmanuel Idenyi Shaibu, attributed the rising incidence of Ponzi scheme fraud in Nigeria to poor financial literacy and the absence of financial education from the country’s school curriculum.

Dr Shaibu said that fraudulent Ponzi schemes always target gullible members of the public. According to him, many Nigerians lack personal financial goals and are easily lured by promises of unrealistically high returns because they do not understand how legitimate investments work.

The Financial Management Expert maintained that Ponzi and pyramid schemes rely on funds from new investors to pay earlier investors rather than generating profits from legitimate business activities, making them unsustainable.

Dr Shaibu advised Nigerians to ask critical questions before investing their hard-earned money into any scheme.

He insisted that if an investment truly generated such extraordinary profits, its operators would not need to seek funds from the public.

As a safeguard, he urged Nigerians to seek advice from qualified financial experts before investing, conduct proper due diligence and avoid expecting wealth without legitimate work.

He further urged Nigerians to set realistic personal financial goals and live within their means. The financial expert warned that until financial education becomes a priority, many Nigerians will continue to fall victim to Ponzi schemes.

A victim of a Ponzi Scheme known as National Reading Culture (NRC), Mrs Amarachi Njoku told our correspondent that she lost over N2 million that she invested in the scheme. She stated that she initially invested N500,000 into the scheme, adding that the fraudsters gained her trust when they paid her N800,000.

She stated that after her initial investment, she continued investing, even convincing many people to join the scheme. Mrs Njoku said she was surprised when the company, which claimed to be genuine, suddenly disappeared, and that her attempt to withdraw funds from the account was unsuccessful.

“As I’m talking with you now, people are on my neck. I’m borrowing money to pay back those whom I convinced to invest in the scheme,” she stated.

Economic experts who spoke with our correspondent described the collapse of the NRC and similar Ponzi schemes as a recurring cycle fueled by economic desperation and greed.

They stated that the fraudulent schemes exploit individuals seeking quick wealth by offering unrealistic, non-guaranteed returns for simple online tasks.

An economic expert, Dr Ifeanyi Ezem, claimed that NRC used deposits from newer investors to pay off earlier ones, noting that the scheme lacked any real underlying business or revenue model.

He stated that the high cost of living makes the vulnerable population, who are often more gullible, more susceptible.

The expert averred that NRC was not registered with either the Securities and Exchange Commission or the Central Bank of Nigeria. He described the schemes as highly illegal and uninsured.

An Ogun State-based publisher, Michael Ogunsiji, has his own tale of experiences from Ponzi schemes.

“I participated in the MMM, BMP, EMMA and CBEX. I recouped my investment on MMM with a profit. I incurred losses on BMP, and CBEX was like a reward for all my losses in BMP. I have studied all the Ponzi schemes and discovered that they have a limited lifespan. The longest survival rate of every Ponzi scheme is 18 months, while the shortest is 6 months.”

“Principally because of the criminal intent behind the scheme, none of them lasts until their expiration dates. The operators run away with people’s money once they have achieved their set targets. So, in my experience, I ensure I cash out 6 months before the Ponzi scheme’s expiration date,” he said.

Speaking about how he finds out their expiration date, he said, “As a fact-checker, I ‘wayback’ the registered website link for every Ponzi scheme URL to determine the registration date and when the website will expire. Once I discover this, I will invest with a calculation to cash out 6 months before the expiration date.”

“Let me emphasise this; I don’t invest in any Ponzi scheme that has no registered website, because those ones have no lifespan. They can crash within 3 days of operation, the moment they realise a reasonable amount to survive. But for me, the experience is memorable, because I realised whopping millions of naira; about a 200 per cent return on my investment, so I have no cause for regret so far!”