It appears like the end of another long and winding pyramid scheme has come to an abrupt end. According to Nigerian BusinessDay newspaper: “Bubble bursts as ‘wonder bank’ fails to deliver returns”
Barely one month after the Central Bank of Nigeria (CBN) sounded an alarm about the re-emergence of wonder banks in the country, the bubble has began to burst as one of the organisations has closed shop following its inability to settle bogus interests promised investors.
Business Day gathered that the “wonder bank” which has offices in Ajao Estate, Egbeda and Ikeja areas of Lagos, with head office in Ibadan has crashed as it was unable to pay thousands of its depositors the jumbo interests promised just within 26 weeks of operation.
Most of the depositors who lodged various sums of money with this institution met its three Lagos offices locked when they visited the place last week to collect their heavy interests for week 26 which was due for collection.
This is where the scam really is:
The organisation has been accepting as minimum deposit the sum of N10,500 from depositors with the promise to deliver N20,000 after three weeks of lodgement.
Well, BusinessDay did not mention Nospetco in its report, but Vanguard was much more explicit. They couldn’t have put the headline better: “Voodoo fund managers on the prowl”
They claim to be fund managers. That their business is genuine, clean, not designed to defraud members of the public, and in fact aimed at alleviating poverty. But there is something eerie, strange and chilling about their operations and conduct casting doubt on this claim.
For example, except for Treasure Interlink Limited, none of these companies visited had a visible signboard at their offices. Also, none of the owners or directors of these companies wants to be identified publicly. Perhaps due to the recent onslaught by the Central Bank of Nigeria (CBN) and the Economic and Financial Crimes Commission (EFCC), the personalities behind these companies have made themselves elusive. For example, one of the directors of Treasureline Interlink with headquarter located at Divine Favour Plaza Fajuyi road, Ibadan, Oyo State, who accepted to a telephone chat, was introduced by his staff as Mr Oyekale Oyeniran. But it was discovered that his actual name is Mr Isaac Ademola Kolade.
Many of them also have one thing in common, they’re headquartered in my hometown, Ibadan.
The companies also bear queer but seemingly attractive names .i.e. Wealth Solutions, Success Point, Pennywise, Spring of Wealth, Cash Seed, Open Gate, Fantastic Options, Gold Power etc. Another puzzling aspect of these companies is that most of them have their headquarters located in the ancient city of Ibadan. And nobody seems to know why this is so.
Why any Nigerian will deposit a massive 450,000 Naira (about 3,500 US Dollars) into a shady investment scheme beats my imagination. Of course the “investment schemes” do not potray themselves as scams. They also promise huge rewards for such investments and gullible Nigerians fall prey for such scams. Nospetco for example, promises to pay 40,000 Naira monthly on your 450,000 Naira “investment”.
What they do not tell you is that this business of theirs is nothing new. Its an old scam whereby deposits from new members are used to pay old members. Thus, the scam continues as long as new members join. It is thus not surprising that Nospetco has been around and waxing strong for 5 years now.
Vanguard reports that the Central Bank of Nigeria (CBN ) and the Securities and Exchange Commission (SEC), had placed advertisement in the media recently that anybody patronizing these companies does so at his/her own risk. Despite the warnings, a large number of people queue up on daily basis to join the schemes offered by these companies and even new ones are being floated.
The bubble is bursting – not because there are no new gullible members to join, but because the Central Bank of Nigeria had ordered that commercial banks closed the accounts of these schemes. The Economic and Financial Crimes Commision (EFCC) has been hunting down the directors of this shady schemes thus making business much more difficult to run.
In case you did not know, a pyramid scheme according to Wikipedia, is a non-sustainable business model that involves the exchange of money primarily for enrolling other people into the scheme, usually without any product or service being delivered, and is highly illegal. Pyramid schemes have existed for at least a century. Matrix schemes use the same fraudulent non-sustainable system as a pyramid; here, the victims pay to join a waiting list for a desirable product which only a fraction of them can ever receive.
I’d do a detailed analysis of all the Nigerian pyramid scams I can research on, shortly. Meanwhile, please share your thoughts here and now.
NOTE: This post and other subsequent ones related to Nospetco should in no way be misconstrued as assassinating the character of Nigerians in any way. I am calling them scams not because they are run by Nigerians but because they are truly scams. There are many hard-working and truthful Nigerians out there.
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