Securities and Exchange Commission (SEC), has revealed that Nigerians have collectively lost about N316 billion to Ponzi schemes and illegal fund managers over the years.
The commission warned that both greed and ignorance continue to fuel the spread of these fraudulent activities.
AbdulRasheed Dan-Abu, head of FinTech and Innovation Department at the Commission, made this disclosure during a presentation on combating investment fraud at a journalist academy held in Abuja.
The event was organised by the commission to train finance journalists.
Dan-Abu described Ponzi schemes as deceptive investment setups that pay returns to earlier investors using funds contributed by new participants rather than from any legitimate business operations.
“These schemes are not really doing anything. They are just collecting people’s money and using it to pay the initial investors. At some point, when there are no new investors, the whole thing crashes and the operators disappear,” he said.
He attributed the persistence of such frauds to the increasing obsession with fast wealth among Nigerians.
“Everybody just wants to get rich today. That is actually what makes people fall into this trap. Even the people who are greedy now are more educated than those who experienced Charles Ponzi’s first scheme. Education has not stopped greed,” he noted.
Dan-Abu recalled the infamous MMM Nigeria scheme, which lured thousands of citizens with promises of a 30 percent monthly return.
He said that some victims even reinvested after its collapse.
“Even after MMM shut down, they came back and told people that if you pay a certain amount, you will get access to your lost money. People still paid. That shows you how greed blinds people,” he said.
He further recounted another case involving a fraudulent organisation known as New Nation, Women in Oil.
The scheme disguised itself as a government-backed empowerment initiative and ended up trapping 155,000 rural women.
“Many sold their houses and cars to invest because they believed it was real. It tells you how dangerous this thing is when people do not ask questions,” he said.
According to data from the SEC presentation, several investment scams have led to massive losses: investors lost N100 million each in Cow Lane and Durrell Nigeria Ltd; N235 million in Now-Now Alert; N400 million each in G-Circle Investment and Box Value Trading; and N900 million in Yuan Dong.
Other major scams included Dantata Success and Prof Coy, which defrauded investors of between N1.2 billion and N2 billion; Famzi Intbiz, which cost N2.5 billion; and Bara Finance, which led to losses of N3.5 billion.
Galaxy Construction and Transportation accounted for over N7 billion in losses, while MMM Nigeria alone wiped out N18 billion.
Nospecto Oil and Gas and other so-called wonder banks drained about N106.9 billion from investors, with the largest single case still under investigation, valued at more than N174 billion.
