Ponzi Scheme Operators Defraud Nigerians Over N300bn- SEC

The Securities and Exchange Commission, SEC, says Nigerians often fall  victims of Ponzi Schemes because of their quest to get rich as soon as possible.

As a result, some Nigerians have lost close to N316 billion to these fraud schemes over the years, even as lessons are hardly learned from them, SEC said during a training programme for journalists in Abuja, the nation’s capital.

According to AbdulRasheed Dan-Abu, the Head of FinTech and Innovation Department at the Commission, greed and ignorance have played a major role for Nigerians who lost their hard earned income to Ponzi Scheme operators, saying those who participate in the fraudulent investment were unaware that operators pay returns to old investors from money collected from new investors, saying it’s not a genuine investment.

“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.

“Everybody just wants to get rich today. That is actually what makes people fall into this trap,’ he noted. ‘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 explained that some Ponzi Scheme operators such as MMM and New Nation had cashed on the ignorance and greed of many Nigerians to defraud them.

In spite of their huge loss to these evil schemes, he stated that many Nigerians have yet to learn their lessons. In the case of New Nation, he explained over 155,000 rural women were defrauded.

“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.”

The magazine reported that after MMM collapsed last year, not a few Nigerians who lost money in the schemes committed suicide because they could not withstand the huge loss they suffered.