Nigerians Lost Over N300 Billion to Ponzi Schemes in Five Years

Nigerians Lost Over N300 Billion to Ponzi Schemes in Five Years

  • Many Nigerians have fallen prey to the activities of fraudsters that flaunt one form of investment options or another
  • A recent statistics indicate that Nigerians have lost over N3 billion to different Ponzi schemes in the last fives
  • Experts point out the loopholes of Ponzi schemes and advise investment public to watch out for certain or common traits associated with Ponzi scheme operators

Last week, social media was buzzing with the arrest of Imu Ovaioza Yunusa, the founder and Chief Executive Officer, CEO of Ovaioza Farm Produce Storage Business (OFPSB) who defrauded unsuspecting Nigerians of about N3 billion through her well crafted and planned Ponzi scheme.

She fronted her Ponzi Scheme with a company that claims to engage in the processing, storage, distribution, and retailing of farm produce like Garri and Plantain. Ovaioza also co-owns Ovaioza Skills Acquisition Center (OSAC) and Relax and Chill centre.

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Ponzi schemes, Nigerians
Ponzi operators defraud Nigerians N300bn in 5 years
Source: UGC

Her modus operandi was simple like most Ponzi Schemes. She offered investors a huge Return on Investment (ROI), which sometimes run into as much as 45-55 per cent which many fell for and pumped in billions of Naira into her plot.

With ‘investors’ money, Ovaioza started living a life of affluence which she flaunted on social media thereby luring and enticing many other gullible Nigerians. She was reported to have a fleet of posh cars, and choice properties in Lagos and Abuja.

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Trouble started when Ovaioza started defaulting, neither paying partners their profits nor returning their capital. She reportedly refused to answer inquiries, and this led to people reporting her to security operatives.

By the time the bubble finally went burst, she had reportedly defrauded Nigerians to the tune of over N3 billion.

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Nigeria’s rich history of Ponzi schemes

Nigerians have recently been exposed to rising cases of Ponzi schemes, which are often pervasive during periods of the economic crunch recession.

From MMM to Loom; Pennywise to Twinkas; Ultimate Cycler to Givers Forum; Clarrita to Loopers Club, the list is endless. They come under the guise of offering an outrageous ROI.

It is reported that Nigerians in the last five years have lost over N300b to Ponzi Schemes.

Recently, victims of the N123 million MBA Forex Scam stormed the headquarters of the Economic and Financial Crimes Commission (EFCC) to demand the arrest and prosecution of the company’s Chief Executive Officer, Maxwell Odum.

The aggrieved protesters alleged that they were defrauded of a whopping sum of N122.51 million in a scheme promoted by the firm with a promise that they would be getting a 15 per cent ROI every month. The company had since reneged on its promise on payment of returns, according to the protesters.

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EFCC identifies 5 Ponzi scheme operators in Nigeria, set to effect arrest soon

Already, the EFCC disclosed that it has arrested and is prosecuting about 10 Ponzi scheme operators who have allegedly fleeced Nigerians of over N12 billion between October 2020 and August 2021.

The EFCC Special Fraud Unit (SFU) had arraigned Dominic Joshua of Brisk Capital Limited for allegedly defrauding investors of over N2 billion with a promise of a 60 per cent ROI.

Also in Lagos, the anti-graft agency recently arrested a couple for allegedly defrauding unsuspecting victims in an N935million Ponzi scheme.

The suspects, Emmanuel and Victoria Jaiyeoba, who were arrested at their residence in Ibadan, Oyo State, are parents to Adewale Daniel, Marketing Director, Wales Kingdom Capital Limited.

The list is endless.

Why Nigerians are falling for Ponzi schemes, experts say

A recent Twitter Space Discussion titled: “Ponzi Schemes: Why do Nigerians keep falling? organized by PennyTree; a financial service organization that fingered greed, rising inflation, poor economic condition, unemployment, perceived poor performance of the capital market, as well as low returns on government securities, are some of the factors that have exposed many Nigerians to Ponzi Schemes.

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Co-founder of PennyTree, Mr. Adeleke Awotayo-Ayeni, explained that while some people were innocent victims of Ponzi schemes, many others made a conscious choice to invest their money in it.

Speaking further, the Fintech entrepreneur disclosed that the most common way to recognize Ponzi investment was through unrealistic and outrageous profits promises.

Despite several warnings and sensitization exercises, many Nigerians are still falling victims to Ponzi schemes.

Recently, the former Acting Director-General, Securities Exchange Commission, SEC, Mary Uduk, had in a forum in Lagos warned Nigerians to stay away from fake financial experts who would promise to double their money within a short time.

She explained that the commission was committed to sensitizing investors and protecting them from the antics of such fraudsters, especially promoters of Ponzi schemes.

On his part, Professor of Capital Market, Nasarawa State University, Prof Uche Uwaleke, disclosed that Ponzi schemes tend to flourish during periods of economic downturn and are prevalent in societies with high rates of unemployment and poverty.

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How to guard against Ponzi schemes, by experts

Uwaleke advised the investing public to be wary of any investment scheme with highly attractive propositions and mouth-watering returns.

He argued that any rational investor should probe further if any investment offering is appearing ‘too good to be true.’

In addition, he said the advice of experts should be sought before taking any investment leap where possible.

SEC needs to do more, Nigerians says

Many Nigerians want SEC to intensify its regulatory effort to rid Nigeria of Ponzi schemes.

According to Tolu Lana, SEC should tighten its grip because of some of the Ponzi Schemes that have made away with Nigerians' money.

Similarly, Tony Oweazim lamented how a company registered by SEC could make away with investors' funds.

How Ovaioza deceived investors with carefully worded agreement, making it hard to recoup investment

Recall that has reported that A carefully worded agreement by the CEO of Ovaioza Farm Storage Business will leaving investors fighting to recoup their money, making it a hard knot to crack for many as their hard-earned money may have been allegedly frittered away by Ovaioza.

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The agreement, which was sighted by, states that investors will lose their investment due to natural causes or unforeseen circumstances.

In clauses 10-12, Ovaioza said that her investors may lose their money and she will only intimate them in writing and not indemnify them as stated by most agreements.


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