EFCC warns against Ponzi schemes posing threat to Nigerian economy, security

*The Economic and Financial Crimes Commission also laments that cybercrime, which is a significant offshoot of the get-rich-quick mentality, has deeply damaged Nigeria’s global reputation and discouraged foreign investments

Isola Moses | ConsumerConnect

The Economic and Financial Crimes Commission (EFCC) has cautioned Nigerian investors against embracing Ponzi schemes because of inherent dangers to the economy and national security.

ConsumerConnect reports the EFCC stressed that such dubious investment schemes also have destroyed several lives, eroded public trust, and undermined Nigeria’s development.

Aisha Abubakar, Acting Zonal Director of EFCC Enugu Directorate

140 top NSCDC officials from across Enugu State attended the retreat with the theme, “Developing Leadership for a New Paradigm”.

Ms. Aisha Abubakar, Acting Zonal Director of EFCC Enugu Directorate, stated this in his address at the Annual Management Retreat of the Nigeria Security and Civil Defence Corps (NSCDC), held at Ogbete, in Enugu, South-East region.

Delivering her paper titled, “Get-Rich-Quick Syndrome and the Youth Vulnerability: The Case Study of Ponzi Scheme – The Role of Law Enforcement in Prevention and Disruption”, Ms. Abubakar described the get-rich-quick mindset as a major economic and security concern in the West African country.

The Acting Zonal Director of EFCC stated that Nigerian youths are especially susceptible and driven by a desire for rapid wealth often amplified by social media and societal pressure.

She also said: “In Nigeria today, the aspiration for wealth has grown increasingly urgent among the youths.

“They often fall victim to enticing schemes that offer double returns within short timeframes, despite the absence of legitimate business operations.”

Why Nigerians take to Ponzi schemes

Contextualising the investment schemes, Abubakar attributed the widespread appeal of such fraudulent schemes to a combination of greed, financial illiteracy, peer and social pressure, technological exposure, drug use, loss of core values, depression, and frustration with traditional systems.

The EFCC top official noted that several people have continued to invest in scams, “even when they suspect it’s too good to be true.”

Among others, she mentioned infamous investment scams, including MMM Nigeria, MBA Forex, Chinmark Group, and lately, CBEX.

According to her, CBEX is one of the most devastating financial frauds in the country’s recent history.

The Acting Zonal Director of EFCC Enugu Directorate explained: “CBEX promised a 100% returns on investment in 30 days, using the appeal of cryptocurrency and AI-driven strategies to deceive investors.”

She equally listed other common types of fraudulent schemes to include the Advance Fee Fraud, popularly codenamed “419”, fake job offers, bogus scholarships, online loan and grant scams, and fake Forex and cryptocurrency platforms.

The EFCC stated that cybercrime, which is a significant offshoot of the get-rich-quick mentality, has deeply damaged Nigeria’s global reputation and discouraged foreign investment.

Abubakar further warned: “Cybercrime has created a market system where fraudsters obtain competitive advantage and drive out legitimate business.

“It also funds organised crimes and terrorism, undermining our national security and economic progress.”

The role of EFCC in curbing menace

Highlighting the role of EFCC in curbing this menace, Abubakar noted the Commission combats such schemes through public campaigns, collaborations, and strategic partnerships.

The Acting Zonal Director of EFCC added: “We conduct roadshows, use social media, and work with institutions like the Central Bank of Nigeria (CBN), Securities and Exchange Commission (SEC), banks, and INTERPOL to trace funds and disrupt scam networks.”

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