Ponzi scheme
According to Investipedia, a Ponzi scheme is a fraudulent investment scam promising high rates of return with little risk to investors. It involves a generation of returns for earlier investors with money taken from later investors – a proverbial ‘robbing Peter to pay Paul’ format.
Ponzi scheme operates like a pyramid scheme in which they use new investors’ funds to pay earlier backers. But these schemes become unsustainable when the backlog of old investors eligible for payments are beyond the investments coming into the system.
The origin of the scheme in Nigeria is not clear, but Punch Newspaper claim it started in 1980s with the Umana-Umana investment platform. The rate of poverty, unemployment, and get-rich-quick syndrome in Nigeria have made Ponzi scheme to become a striving form of scam.
This Ponzi syndicates have masterminded multiple online platforms, simulating trades in forex and cryptocurrency, mining natural resources, and renewable energy products.
They entice investors with alluring daily returns and weekly salaried jobs, only to abscond with cash deposits that often run into hundreds of millions of Naira.
These operations can last anywhere from two weeks to four months, gathering sufficient funds from victims before abruptly shutting down.
However, these scammers never truly disappear; instead, they reemerge under different guises, perpetuating what appears to be a never-ending cycle of deception.
Before shutting down one fraudulent scheme, they often have multiple other schemes registered and ready for launch. In other words, their criminal enterprise is in perpetual operation.
This syndicate will either concoct a brand-new business entity for its activities or clone an already-established international company specializing in cryptocurrency or commodities.
They get their victims true social media platforms such WhatsApp, Telegram, Facebook, etc. Most times, they create Facebook page of reputable media companies to promote their investment opportunities so that people will easily believe them thinking that for these reputable media platforms to promote such investment, it must be real, coupled with the army of the syndicate who post testimonials on the comment sections.
Findings also revealed a concerning trend: the scammers often use the names of globally recognized brands and personalities to show credibility to their schemes, claiming to offer job opportunities and financial growth for Nigeria’s unemployed population.
A platform called PHEBELLA circulated pictures of two prominent personalities Kelvin Bennett, and Torsten Dehner, claiming they were top-level executives of the company.
Here are some of these ponzi schemes trending in Nigeria:
PHE-BELLA
Minibot.store
Anker-power.net
Teck-ng.com
M.riotinto-wealth.com
PHE-BELLA
This is one of the new trending Punzi Schemes in Nigeria now. The scheme entices people with a promise of daily returns of 5% on investments, with a minimum buy-in starting from NGN 2,500 and lasting for 32 days.
The scheme also promises investors some percentage earnings if the recruit others to join the scheme on their ‘downlines’. Anyone who’s able to grow their downlines to 50 people, PHE-BELLA promised a stable job and funds to establish a local office.
Some people at the top pyramid of the scheme were able to get up to 50 people on their downline and earned a monthly salary of NGN 63,000 and received branded t-shirts for their team. A ploy to lure more people.
PHE-BELLA later introduced a high-return, short-term investment option called “Wefare and Anniversary Package” which promised triple percentage of returns. Many people who were able to earn reasonable amount of month from the investment, reinvested their earnings into the scheme, with the hope of earning more.
After a while the platform went silent, investors couldn’t make get their moneys back, and the managers of the scheme were no long responding to calls.