Ponzi Schemes: Federal Government Clamps Down On Fraudsters


The last six months has seen Nigeria launched into the era of Ponzi schemes, the proliferation of these ventures have come at a huge cost to many Nigerians especially when these get-rich-quick schemes fold up.

The government has tried to dissuade the public from engaging in these high-risk ventures (Ponzi schemes) with little success. But the Federal Government, through the Securities and Exchange Commission (SEC), has sealed up the premises of one of these latest Ponzi schemes – Yuan Dong (YDEC) over illegal operations in the country.

Head, Corporate Communication of SEC, Mr. Naif Abdussalam, speking in Abuja, said the closure was to end unlawful activities of the company.

 “Investments in the scheme range from a minimum deposit of N10,000 to a maximum deposit of N240,000.

“The investment period of the scheme is pegged at a minimum of 30 working days to a maximum period of 10 months with offer of interest rates on short and medium term basis.

“The company promises a daily profit of N80 and N2,400 depending on the category of investment.”

Abdussalam disclosed that the commission’s investigations showed that the company also enticed its customers with payment of bonuses should they convince more investors to invest in the scheme.

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He said that the commission had established that the company’s activities also constituted a breach of the Investment and Securities Act (ISA), 2007.

“Furthermore it was discovered that contrary to their supposed existence in over 20 locations across the country, the company only has functional offices in Asaba, Kano and Abuja.

“The promoters of these illegal operations have been arrested by the Nigeria Police Force and are undergoing interrogation.

“The Commission wishes to notify the investing public that the company is not licensed to carry out investments business of any type and as such its operations are illegal.”

Abdussalam advised the public to exercise due diligence and caution in the course of making investment decisions.