Ponzi scheme is an organized financial fraud targeted at investors based on the promise of high returns on investment (ROI). The failure of the scheme is guaranteed right from the start, but often well-disguised as preliminary success. Thus, at the early stages, which may run into a couple of years, all will seem well, as some investors may receive their returns (which they may re-inject into the scheme) while new entrants will find their way in until a considerable number of people would have generated large funds.
In what may appear as a sudden twist of events, the plane will come crashing and there may be no survivors except those who disembarked from the ill-fated flight of disaster. Unlike in typical air crashes, the pilot, the chief promoter of the scheme, and his crew often survive because, being the architects of the doom, they have everything worked out and their parachutes are intact.
Not too long ago, Maxwell Chizi Odum and his company, MBA Trading and Capital Investment Limited (MBA Forex) allegedly made away with about N213 Billion Naira. We have also heard of Akor Philip Paul of Benignant Forte Nigeria Limited, Dominic Joshua of Brisk Capital Limited, Harrison Osemwengie of HO Corn Farm, Adewale Jayeoba of Wales Kingdom Capital Limited etc, being architects of investment tragedies in Nigeria.
But has Nigerians learnt any lessons? It is doubtful. Over time, these ponzi scheme operators appear to come up with intelligent and well-organized system of commanding the interest of the public. Some have learnt to bring a bit low the percentage rate of ROI. This is to divert attention. The more realistic it looks, the more the scheme will be considered authentic. Others have moved to make available physical places of business and demonstrate trading and business efforts, with workers scattered around several business locations as signs of progress and expansion. They claim to operate in various sectors of the economy – agricultural, technological, real estate, cryptocurrencies, hospitality, etc. Imagine Global Solution Limited (IMG) and Chinmark Group Limited played out the script perfectly.
Bamise Ajetumobi of Imagine Global Solution Limited (IMG) – started a micro lending business that was allegedly meant to provide trading capital at the grassroots level, basically focusing on the unbanked. From this point, Bamise and his company claimed to have needed more funds to take advantage of the opportunity available in the business after analyzing the funding gap. They attracted lots of investors who invested in the business with the hope of receiving adequate returns. The major source of attraction for the investors was an elite advisory board set up by Bamise which was made up of men and women of great pedigree. As time revealed, Bamise allegedly falsified the financial status of IMG. The Advisory Board members were always kept in the dark by Bamise and Elizabeth, his wife, regarding the true affairs of IMG. For instance, without the knowledge of the Advisory Board members, Bamise and his wife, Elizabeth, allegedly converted IMG from a company dealing in licensed money lending business to a ponzi scheme platform. Many got the heat. Lots of money were lost.
In the case of Mr. Marksman Chinedu Ijiomah and his company Chinmark Group Limited, a similar situation played out. The alleged reason for the failure was that the Securities and Exchange Commission (SEC) had frozen the company’s accounts. This came months after SEC announced that Chimark Group is not registered with the SEC and the investment scheme being promoted was also not authorized by the SEC.
Like Bamise of IMG and the rest, Marksman Chinedu Ijiomah was indeed a marksman – skilled in “shooting” down the ignorant and gullible investing public. Unlike Bamise, Marksman heavily utilized a number of Social Media Influencers who served as bullets to “gun down” people desperate to make money. It worked. The success recorded was massive.
While it may be difficult to hold the Social Media Influencers equally liable, what was clear was that some of them went beyond certain legally permissible limits in promoting the “business”. This singular act of indiscretion exposes them to possible liabilities of some sort. In today’s world, social media influencers wield wide powers of influence. A public display of associating with a person or business is enough to attract patronage to that person or business even without saying a word. We recently saw how the star actress, Regina Daniels used her influence on social media to promote Jaruma (the Kayamata merchant) and her products which she later claimed not to use. However, she was comfortably hobnobbing with Jaruma and her products in a manner suggesting she was in fact using the products just to attract sales. Unknown to her followers, she was not using the products and has never used them as she claimed.
Apart from Social Media Influencers, these schemers also use religious controls to command legitimacy. They draw closer to influential pastors while targeting the congregation who will rather pray than make intelligent investment decisions.
Talking about liabilities, the promoters of these ponzi schemes often get away with their deeds. A couple of arrests here and there may help but only a few may recover some cash. But even the law enforcement agents often take their cut in the form of bail conditions and will ultimately release these promoters. In fact, law enforcement agencies are not often quite sympathetic with the victims who they consider as “thoughtless and greedy risk takers.” The agencies are sometimes caught up in the legal controversies of treating the case as either a criminal case or a civil case flowing from failed business transactions.
Where arrest is not possible, the promoters of the ponzi schemes may be cooling off in the Island of the Caribbean, while waiting for tension to cool.
Beyond the semblances of greed, and the power of influence, victims of these pyramid schemes suffer for their inability to involve financial consultants in the deals. They get their fingers burnt for neglecting even the role of lawyers and their relevance in the scheme of things. The victims appear to be controlled by the burning desire to find value for their savings in a country engulfed in an alarming rate of inflation.
Nonetheless, there is no justification for weak investment syndrome in business which is primarily a risk.
Whether Nigerians will learn a lesson for once remains to be seen. In the meantime, the Government should not fold its hands and watch. Active steps need to be taken to regulate the investment space as the current passive disposition of the Government and its relevant agencies are clearly unhelpful.
Introducing Law Practice as a Business
Dear friends, I’m happy to announce the publication of my latest book, Law Practice as a Business.
Law Practice as a Business discusses a critical aspect of law-practice business—the business of making money in legal practice. It shares some of the vital business strategies and distinct ideas peculiar to the legal industry. The ideas are presented with clarity of thought and simplicity of language. Hopefully, this keeps you relaxed while activating your logical and innovative mind.
In addition to my knowledge and personal experience, the fundamental business aspects of legal practice discussed in this book also draws from the ideas of well-accomplished legal practitioners and scholars, locally and internationally. Therefore, some of the opinions expressed in the book are authoritative. The ideas are not only authoritative but realistic, with proven degrees of success.
This book is meant to be a source of information, inspiration, and motivation for all categories of lawyers—especially young lawyers—as well as the lay in law, including law students and people in service-based businesses.
Book Price and How to Get a Copy
Law Practice as a Business is N7,000 (Seven Thousand Naira) only per copy, excluding delivery cost. To grab a copy or more for yourself and your learned friends, kindly make payment to any of the following account details:
Azubuike Stephen Ifeanyi
Azubuike Stephen Ifeanyi
You can share evidence of payment via email (email@example.com) or WhatsApp (+2348063868497) and provide your delivery address.
You can also purchase the book at my online store, https://stephensbooks.net/.
NB: For law firms, legal departments, and other organisations, Law Practice as a Business is also available for bulk purchase and is deliverable to all locations. To place requests, please email firstname.lastname@example.org. You can also reach me via call/WhatsApp on +2348063868497.
The book is also available in Lagos and Abuja at the following locations:
1. Ikeja Bar Centre, Lagos High Court, Ikeja Division.
2. Udom Emmanuel Book stand, Federal High Court, Ikoyi.
3. Infusion Lawyers, Vibranium Valley, 42, Local Airport Road, Ikeja.
4. Mr. Alex, Federal High Court, Abuja, 08035991379.