Top 5 Scandalous Investments in Nigeria

The article aims to highlight individually some of the most prominent scandalous investments in Nigeria, It will give a preview into the origin and impact of these get rich quick schemes.

Money doubling scheme in the 70s on the streets of Lagos where fraudsters would pad fake Naira notes with real ones using a supposed magic chemical has grown into an empire of technology-aided schemes. Notable among investment scams are Ponzi schemes, also popularly known as pyramid schemes.

Ponzi schemes are named after the famous swindler Charles Ponzi who in the 1920s  made a name for himself scamming people out of their hard-earned money. These schemes are marketed as multilevel marketing or network marketing investments. It requires you to invest a certain amount of money and then invite another person to invest. This person then has to bring another person, thus continuing the trend. Managers of the investors simply rob Peter to pay Paul, they pay person A using person B’s money and so on until they are unable to pay any more.

This article is a detailed review of some of the top scandalous investments that have taken place in Nigeria. While these scandalous investments are not unique to Nigeria alone the main focus will be their impact on the Nigerian investment ecosystem.

Mavrodi Mondial Movement

Number one on the list of our top 5 scandalous investments in Nigeria is the famous Mavrodi Mondial Movement, popularly known as MMM. The Ponzi scheme became prominent in Nigeria in 2016, and quickly became the biggest investment scheme in Nigeria’s history. MMM was so popular that anyone who was not investing would be considered an alien or foolish.

The scheme had no limitation on the amount of money that could be invested and guaranteed a 30 percent interest on investments within a month. To sweeten the deal, MMM gave extra percentages to people who brought other investors. Sounds too good to be true right? Exactly. The MMM community in Nigeria grew in leaps and bounds, they held conferences and seminars all over the country, with some going as far as renting offices and appointing regional chairman and local leaders. Naturally, the MMM bubble burst in November 2016, causing thousands of Nigerians to lose billions of Naira.

Twinkas investment scandal

Upon the crash of MMM, the flood gates of Ponzi schemes opened in Nigeria. A whole bunch of Investment schemes following Mavrodi’s business model launched their services in Nigeria. One of these popular schemes was Twinkas, investors are required to send money to an individual account after which they would be paired with another investor who would then pay a 100% return on investment into your account in 21 days. You also get a referral bonus of 5% on every new investor you bring onto the platform. The platform crashed months later due to its inability to fulfil its wild promises.

The Ultimate Cycler investment scandal

Ultimate Cycler was created by Peter Wolfing and operated on the 2x2 cycler system that encourages member to member payouts. Peter Wolfing first launched his Ponzi scheme in 2013 under the name Turbo cycler, however, the scheme crashed and a lot of people lost money.

The scheme was relaunched under a new name and with new improved promises, it however crashed once again in December 2016 with a lot of Nigerians falling victim yet again to the scheme. The scheme operates in 6 stages and promises over 100% return on investment. For as low as 12,500 Naira, you will receive 50.000 Naira. The financial expectations and interest rates increase as you move up the pyramid. 

Get Help Worldwide investment scandal

This platform markets itself as an online community where people are helping each other financially directly with no third parties involved, whatever help you give to someone financially grows by 30% if in local currency or 50% in Bitcoin in 30 days. Investors are required to provide help to another individual after which interest is accrued on the help provided.

After 30 days, the investor can also apply to receive help from another investor who then sends the required amount to him. They also offered registration bonuses as high as $20 for investments ranging from $50 to $499. Like its predecessors, The Ponzi scheme began to experience difficulties paying out its investors. The owners broadcasted a message telling investors not to panic and that they are working on restoring things. However, the platform disappeared into thin air with millions of naira despite its assuring message.

The Forex scandalous investments

In the year 2020, while the world battled the Covid 19 pandemic, a new scheme virus also came to town. Forex trading and Forex investments which were previously not common among average Nigerians became the order of the day.

On one hand were individuals who began to organize several pieces of training on forex trading, promising them the opportunity to make hundreds of dollars weekly. On the other hand, were those who created platforms asking people to invest in forex through them, promised monthly returns on investment ranging from 25% to 50%.

Amongst these investing companies were companies like Alowat forex trading company, Mide Btc, amongst others. These investment companies became an instant hit, with the owners becoming millionaires overnight. Some of these companies were able to fulfil their investment promises for a while but then began to suffer huge losses in the forex market. This caused most of these companies to shut down while facing hundreds of millions in losses.

To the rational thinking man, Ponzi schemes are very easy to spot. One of its easiest indicators is its pyramid trends usually disguised as networking and its unrealistic return on investment. Investments promising 30 to 40% ROI are unrealistic and unjustifiable by market practices.

One can easily say that the reason most Nigerians keep falling for these schemes is because of the level of poverty in the country and also the high level of greed. Most of the creators of these schemes portray a lavish and affluent lifestyle and thus easily convince average Nigerians into buying into their fugazi. 

These schemes continue to exist in Nigeria because the financial security operatives rarely do anything to stop them. Some of these scammers even go as far as operating business licenses like the CAC and even pay taxes. 

Investment scams continue to pop up in Nigeria. A good example is Imu Ovaioza Yunusa, the CEO of Ovaioza Group of Companies. Ovaioza and her husband were recently arrested by the police after scamming investors out of billions of naira. The onus falls on Nigerians to take their mind off these get rich quick schemes, the official agencies might be slowing in doing their jobs but the ultimate responsibility falls on Nigerians to identify and avoid these scams.

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