In the recently times, Ponzi scheme operators have invaded the soul of Nigeria with recklessness of an undertaker, causing pains, loss of huge amount of the people’s hard-earned money on false investments that causes more harm than good.
Last week, the Economic and Crimes Commission, EFCC, an agency mandated to fight financial crimes, economic sabotage and cybercrimes, wielded their its Section 6(b) of the EFCC establishment Act 2004, which empowers it to investigate all financial crimes including advance fee fraud, money laundering, counterfeiting, illegal charge transfers, futures market fraud, fraudulent encashment of negotiable instrument, computer credit card fraud, contract scam, etc, declared war on Ponzi scheme operators.
The Act does not only mandate the EFCC to only investigate just government federal and states institutions but also private entities and individuals.
It is on this ground that the commission, after a thorough investigation of over three months, came out with the names of fifty-eight (58), Ponzi scheme operators illegally operating across the country.
The Commission stated that “the companies are neither registered with the Central bank of Nigeria, CBN, nor the Security and Exchange Commission, SEC, the two regulators, in separate correspondences with the EFCC, denied that they are registered with them.”
Apart from its mandate of Prevention, investigation and prosecution of economic and financial crimes, I must say, that the Commission, under its Executive Chairman, Ola Olukoyede has done a great service to this nation by closing down these illegal investment shops by holistically apprehending and arraigning them.
He deserves commendation in its effort to inform and enlighten the populace on the modus operandi of Ponzi Scheme Operators, as well as what the citizens should do to protect themselves from these fraudsters.
The Commission, through it Spokesperson, Dele Oyewole said “The EFCC assures the public of its vigilance and proactive monitoring of every entity and player in the nation’s economic space to safeguard the public from opportunistic and predatory operators and use the instrumentality of its anti-corruption mandate to stimulate growth in the economy.”
The clamp down on these Ponzi scheme operators has so far yielded result, with the EFCC spreading its wings in the fight across all corners of the federation and to ensure a sane environment for Nigerian businesses to thrive. For instance, on March 10, 2025, Operatives of the EFCC, Kaduna Zonal Directorate arrested 28 suspected ponzi scheme operators in Minna, Niger State.
Their arrest linked them to fraudulent investment activities with a company, Q-Net Ltd, which operates from a three bedroom apartment in Al-Bishiri Estate, Minna, Niger State.
In May 27, 2021, a fleeing Ponzi scheme operator, Omotade-Sparks Amos Sewanu, operator of the Inks Nation Ponzi Scheme was arrested by the operatives of the EFCC in Sokoto. He had been at large but was finally arrested. Also, fake Ponzi scheme operator Umoren Moses Edet was convicted and sentenced to seven years in prison. has convicted and sentenced a fake Ponzi Scheme operator: he was sentenced by Justice A.T. Mohammed of the Federal High Court sitting in Port Harcourt, Rivers State.
Nigerians and all stakeholders in the anti-corruption fight should join hands with the EFCC in achieving a safer, secured and vibrant economy, devoid of any case of Ponzi schemes and other economic and financial crime. Through collaboration with stakeholders, our dreams of having a safe Nigeria will be achieved.
How does this Ponzi scheme works? It’s striking features of Ponzi scheme is that it is a fraudulent investment where returns to initial investors are paid using capital from newer investors rather than legitimate profits derived from the investment.
It relies on a continuous flow of new investments to sustain pay-outs thereby collapsing when new investments come up and or when the new investors demand withdrawal from their dividends.
Simply put, a Ponzi scheme is an investment fraud that pays existing investors with funds received from new investors. Perpetrators of this kind of scheme may promise to invest victims’ money and generate high returns with little or no risk, but what many investors and victims in this fraud do not know is that the initial organizers of the fraud do not invest the money, what they normally do is that they pay those who invest earlier to keep the business going and they may also keep some of the money for themselves.
In Nigeria, Identifying a Ponzi scheme is not easy as criminals usually disguise their evil trade.
As a scheme, it promises high returns with little or no risks and in a normal investment, there is a possibility of risks and organizers may inform or highlight those risks to their investors, unlike in a Ponzi scheme. Perpetrators guarantee investors of high returns on investment and assure them that there is no risk, earning investors’ trust.
Other ill features of a Ponzi schemes are the fact that most of the Ponzi schemes are not registered with the relevant authorities in their host countries. There is no gain-saying the fact that a safe, secured and enabling environment makes it easier for the development and progress of a nation. But to achieve this, there has to be laws, rules and regulations guiding the conduct of various stakeholders, including the investors and organizers of various investment platforms.
Governments and institutions should commit to sanitising the financial space of the nation to attract investors both within and outside the country.
Other features of a Ponzi scheme include; unlicensed sellers, just as the companies are not registered, so are the sellers, hence the need for the firms and professionals to be licenced and registered. Because they will be checked by the various registration council and agencies.
Having a secretive and complex strategy is also a red flag on the part of the Ponzi scheme operators. For a sane, conducive economic environment, Nigerian citizens should also avoid opportunities they don’t understand and report to the relevant authorities on some of these fraud mechanisms employed by these Ponzi scheme operators.
There are considerations in paperwork, there are errors and inconsistencies in citizens’ accounts statements which may indicate that funds are not invested accordingly, the citizens should be vigilant in reviewing all the paperwork related to their investment.
They also face high difficulty receiving payments from their investment, Ponzi scheme investment promoters make use this technique to prevent participants from receiving their dividends and from cashing out by offering even higher returns.
To be forewarned is to be forearmed.
Abubakar U. Abbas writes from Jabi Abuja.
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