The Economic and Financial Crimes Commission (EFCC) has issued a strong warning about 58 companies allegedly running illegal Ponzi schemes in Nigeria.
How Do Ponzi Schemes Work?
Ponzi schemes promise investors huge profits with little to no risk. However, instead of making genuine investments, they use money from new investors to pay off older ones, creating the illusion of a profitable business. Once new investments stop, the scheme collapses, leaving most investors with huge losses.
EFCC’s Findings
According to the EFCC, these companies are not registered with Nigeria’s financial regulators, the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC). A statement released on the EFCC’s official X (formerly Twitter) page read:
“The EFCC alerts Nigerians about the operations of 58 companies masquerading as investment platforms and scamming innocent citizens out of their hard-earned money. Neither the CBN nor the SEC has licensed these firms.”
Legal Action and Ongoing Investigations
The EFCC has taken legal action against several of these companies:
- Five companies have been convicted.
- Another five companies have pleaded guilty and are awaiting further legal review.
- The remaining cases are pending arraignment.
Some of the Companies Named by EFCC
Among the alleged fraudulent companies are:
- Wales Kingdom Capital
- Bethseida Group of Companies
- AQM Capital Limited
- Titan Multibusiness Investment Limited
- Green Eagles Agribusiness Solution Limited
- Cititrust Credit Limited
- Chinmark Homes & Shelters Limited
- Crowd One Investment
- Farmkart Foods Limited
- Many others.
What You Should Know
In a related development, EFCC’s Kaduna Zonal Office recently arrested 28 individuals in Niger State for running a Ponzi scheme under the company Q-Net Ltd. These suspects allegedly lured investors with promises of high returns and collected between $790 and $850 (approximately N1.46 million) from each participant.
As part of efforts to tackle these fraudulent schemes, the Nigerian Senate passed the Investments and Securities Repeal and Re-enactment Bill, 2024. This law introduces stricter penalties, including a 10-year prison sentence and fines of up to N20 million for anyone involved in Ponzi schemes.
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