To unmask the operations of the internet ponzi scammers, and the pains of their victims Muheeb Mashood explored different ponzi projects for months; investing in different projects while joining different WhatsApp platforms and Telegram groups.
It was a Wednesday in June.The darkness impressed upon the night, while the birds chirped from their nests. The usual Sokoto hostile weather drove residents outside from their rooms. On the ground lays a bed with a pillow, and on the bed is Bolaji Aliyu, facing the sky covered with stars.
Amidst the conversation, Aliyu was haunted by his harrowing experience, recounting how he lost N50,000 in 2022 to a ponzi platform.
With what seemed like an opportunity to grow his hard-earned money, the 27-year-old Aliyu was captivated by the prospect of financial cash out by his friends, and invested his total savings on the scam project called ‘TG’.
Initially, he was disappointed to hear that the minimum investment fees is N100,000 because he only had N50,000 at that time.
With a beaming anticipation blending on his face, Aliyu invested N50,000 after his friend later found some people that collaborated with him — aiming for their money to reach N250,000 on the same day.
As was expected, Aliyu was gripped with joy when the money dramatically increased on the platform’s website, as he monitored it on his phone. Soon, the dream turned into a fantasy after their investment suffered drastic fluctuations before it finally vanished into thin air. The aftermath left him with sober, solitude and frustration.
“After I lost my N50,000, l faced regressive hardships, hunger and I could not fully concentrate on everything I’m doing around that time because the money is too much. And my life depends on it.”
“Thanks to a friend of mine that sent me N5,000 to buy some foodstuffs that revived me for the meantime.”
The present economy of the country has pushed many Nigerians to resort to get-rich-quick strategies to earn money, as people are finding it difficult to survive due to recession.
Credit: Muheeb Mashood, Naomisophyblog
Nigeria’s inflation rate hit 34.19 percent in June, 2024, the highest recorded since 1996. Removal of the fuel subsidy, and weakening of local currency accounted for this surge.
Boosted by price increases in bread, cereals, potatoes, and fish, food inflation accounted for the bulk of Nigeria’s inflation basket, surging to a high record of 40.87 percent compared to 40.66 reading in May.
This has increased fraud in the country while large numbers of the citizens are falling victims to scam – among them Ponzi schemes.
What is a Ponzi Scheme?
According to a study by ResearchGate, the proliferation of ponzi schemes appears to coincide with the official declaration of economic recession in 2016.
Ponzi scheme is an online scam investment where existing customers are paid from funds deposited by new users. It is a short term project that promises high rate returns to create an illusion of big profits. It stays between one to three weeks depending on the strategy devised by the perpetrators.
The ponzi con artists usually impersonate brand products to grade their investment level.
Tesla
On a Thursday morning in June, Olamilekan Abdulganiyu, saw a link with an investment program on a WhatsApp group. A click to the link directed him to a website with the name ‘Tesla’, misrepresenting one of America’s leading brand of cars.
With varieties of products, he invested N2,000 – the sum he could afford to lose, with N600 as daily income. He withdrew N1,150 immediately as a welcome bonus. However, N1,050 was credited to his bank account after the platform deducted 15 percent as transaction fee.
“Guy share me the link make I also run am”, this reporter told Abdulganiyu to share the link.
Without delay, I joined through his referral link, invested the same amount and bought the same product as he did. I withdrew my welcome bonus, and Abdulganiyu was given N700 as referral bonus. We joined their Telegram channel and WhatsApp group where we received updates.
Screenshot of Tesla scam investment products
“This one nah small cash out channel ooo”, I said. “But this thing is fake, majority of them don’t stay long”, Abdulganiyu replied.
“See nah them sabi, I thank God say I don withdraw half of my money. Because I just risk the little change wey I suppose to use chop”, I retorted as we both burst into laughter. That was how my journey on a tour of Ponzi schemes commenced.
In a surprising turn of events after two days, we experienced a gradual increment in the minimum withdrawal from N1,000 to N1,500, and later to N3,000.
The Tesla scam project stayed for a week. Fortunately we were able to claim our capital investment including some little profits before one of the administrators of the WhatsApp group that we joined sent a message to the effect that the project had stopped paying. Yet, we had earlier withdrawn some yet-to-be-dropped funds before we realised it was fake.
Notwithstanding, the group admin introduced himself to us as one of the biggest investors of the project. He added us to his own WhatsApp group, and promised to keep us updated on the newly launched project to invest without losing our money.
After Russia, Ukraine, China and the U.S.A, Nigeria has been ranked 5th in a global report on sources of cybercrime activities. This report was described as the first-ever World Cybercrime Index, identifying top major cybercrime hotspots at a national level.
In 2022, Nigeria’s anti-graft agency, the Economic and Financial Crimes Commission (EFCC) reported to have convicted over 2,847 persons connected with cybercrime activities in the country as of October 2022.
Furthermore, the then EFCC chairman, Abdulrasheed Bawa disclosed that majority of the convicts were youths who ought to fight against cybercrimes and other criminal activities associated with cyberspace.
After Oyinye Mercy Lawrence, whose name was revealed from a payment records after she credited this reporter a token of her giveaway, and whom identified herself as Rhik’s Empire, added us to her group (with over 900 members), this reporter started a new course with the ponzi scheme, studying every activity of the group. Then, we discovered the tricks used to lure people by some so-called promoters.
Payment receipt of giveaway revealing Rhik’s Empire’s name
How Promoters Lure Victims
It was early Monday morning after the day broke. The burstling environment of Wamakko, a community in Sokoto, was characterised with noise, as residents prepared for their daily routine. I grabbed my phone, and scrolled opened my WhatsApp. I was in shock as my WhatsApp was account flooded with several groups created by different individuals who identified themselves as promoters.
These promoters take contacts enmasse from other WhatsApp platforms with the same propaganda. They open a new group and add people to it. Then they start prophesying a fake project. Why? Because they receive a 30 to 40 percent bonus from the deposit made by anyone who joins through their referral links.
“I’m running with just one objective. Showing my team members how to make money…Helping them achieve financial success.
“International Breweries will be staying more than a month this period…If by the end of this project you used my cash out cheat, and you didn’t profit up to #150,000 to #200,000…I will be more than ashamed to call you my team member”, Rhik’s Empire sugarcoated a fake project on his WhatsApp platform.
Screenshot of Rhik’s message on his WhatsApp group sugarcoating a fake project
On occasions, these so-called promoters organise giveaways; money, recharge cards and data to enchant people and demonstrate that the ponzi projects actually lead to success.
However, they subject members to conditions. Before a member can be qualified for the giveaway, he must have invested in some particular project that is always sanctioned by them. Sometimes, the winners just need to engage their posts in the group by posting stickers as reactions. These tactics are devised to gain more referral bonuses, and to validate their actions.
“There will be a giveaway for five people in the group today…The giveaway condition is simple. Only investors on Schneider Power, International Breweries or SFN are eligible for the giveaway.”
“Please I don’t want to insult anyone here because I believe we are all adults here. So, if you know you don’t fall in any of the categories, kindly respect yourself and don’t drop your details”, Rhik’s Empire stated again.
These promoters play with psyche of their victims by investing a large sum of money on the projects. Also, sending withdrawal proofs to their platforms has brought a win-win situation for them.
This reporter discovered that the so-called promoters have a platform where they also interact. And majority of the withdrawal screenshots posted in their groups are identical. Therefore, faking their investment amounts.
Like Rhik’s platform, ‘Daily Hommies Update Top’ is another WhatsApp group with a common mission — having over 250 members. This one is run by Salim Abdullahi (revealed by TrueCaller), who identified himself as Busybrains. He also posted similar projects like the first predator.
However, unlike Rhik’s, Busybrains does not dish out giveaways. Given to the circumstances, he is not as skilled as Rhik’s or the game may not be as favourable to him as the former.
Screenshot of Busybrain’s post of a fake project to his WhatsApp platform
Screenshot showing the real name of Busybrain, revealed after his phone number was subjected to a check on Truecaller
Porsche, Tecno, Intel.dad
After the shock from Tesla that promised to stay for 90 days but lasted for a week, it took me weeks before I could invest in another newly launched project (Porsche). This time, it was around July.
This project had been sugarcoated by Rhik’s since I joined her WhatsApp platform. She always shared screenshots of her withdrawal to the group on a daily basis. As she claimed, the project had already stayed for three weeks, and was updated on 15th July, increasing their daily income from N300 to N600.
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Like Tesla, I invested N2,000, withdrew N1,200 as a welcome bonus, and my remaining balance in the next two days after I received N600 daily income twice. That was all I could get before the project crashed (stopped paying), three days after it was updated.
What it means is that the operators of this project tamed the existing users with small tokens, and used them as bait to lure more victims to swindle them.
Another project is Tecno, introduced on 17th July, where I invested my usual N2,000. Unfortunately, I was unable to withdraw my capital before the project crashed the following day.
The last project I invested in to conclude my journey was ‘Intel.dad’ where I was welcomed with a myth. Introduced in late August, Rhik posted the scheme to her WhatsApp group a day after the launch.
I deposited a sum of N5,000 to Humaira Muhammad, one of the perpetrators behind the platform — hoping to earn a return of N1,750 daily for the next 365 days. The following day, I withdrew my daily return but the money took forever to arrive into my account.
In the first two projects I invested in, I was fortunate not to fall victim because I invested as early as the first day the project was launched and updated respectively. However, I got scammed on the last ones due to my late registration — the fate of victims of these sham projects.
Among the victims of the Porsche project was Abdulmumeen Adam. When asked whether he was able to withdraw his money after he invested with N2,000, he noted that he could not withdraw anything from the platform before the project stopped paying the following day.
Similarly, Akorede Soneye (who preferred his real name not to be mentioned) was devastated when he was unable to withdraw his money after he deposited N5,000 to Musa Ibrahim Sabo, another perpetrator behind the ‘Intel.dad’ fake project.
Screenshot showing this reporter successfully purchase a N5,000 investment product from Intel.dad, a fake platform
Payment receipt showing this reporter deposited N5,000 to Humaira Muhammad
Payment receipt showing Akorede Soneye deposited N5,000 to Musa Ibrahim Sabo
According to data by Ponzitracker, 66 Ponzi schemes were uncovered in 2023. This means that a new project is launched at least once every five days.
This data represents an almost 100 percent surge from the 34 schemes discovered in 2021, and a nearly 20 percent increase from the 58 schemes uncovered in 2022.
Collectively, the 66 Ponzi projects represented nearly $2 billion in investor funds which was significantly lower than the $5.3 billion invested on the project in 2022.
Thus, it was postulated that until the economic downturn is addressed and rejuvenated, Ponzi schemes would continue to thrive in Nigeria.
Red Flags
Throughout the journey of this reporter with Ponzi schemes, it was discovered that these platforms run with identical strategies, but with little discrepancies.
To start with, whenever a new platform is launched. They display a very good signal for at least two days. At this period, they credit users without delay whenever withdrawal is being made. And they interact with people through their Telegram channels to give an impression of how reliable their platform is.
“With a daily rate return of 30% and a commission of 40%, you can get a generous return whether you invest yourself or invite subordinates to invest.
“You will get back all your funds within three days, and all will be profits after that. This is the best investment platform in Nigeria”.
“Don’t wait, join now, and you will achieve great success with the development of TECNO”, said one such example from the Tecno Telegram channel.
The next days always follow with hike of the minimum withdrawal. At this stage, the majority of people will not be able to withdraw their money. And they will stop paying in the next or two days, with new investors losing their money without a single withdrawal.
“The number of people Withdrawing daily is very much
And for the Withdrawal not to be slow, we have to change the minimum withdrawal to 2,000”, the message will say.
Also, these platforms use untraceable account numbers to receive deposits from their victims. When Abdulwasiu Ajao who linked his BVN to his Opay account was about to make a deposit to one of the platforms, Opay customer care service gave him a phone call to warn him that the account he was about to pay into is suspected of scam.
Screenshot of when Opay warned this reporter that he was about to pay to a fraudulent account
Likewise, when we subjected the URL of these platforms to different verification tools. Their results came out with a high element of scam and risk.
When subjected to EasyDmarc, one of the website verification tools, Tecno URL scores zero while showing that its risk assessment level is high.
Similarly, another verification tool ‘WHOIS’ traced the registrar of the URL to Alibaba.com Singapore E-Commerce Private limited instead of Tecno Mobile based in Shenzhen, China.
In addition, the ponzi websites always become inactive whenever the culprits finish their scam operations. Same goes for their WhatsApp and Telegram channels. Sometimes, they change the identity of these communication groups by using it for another project.
More Victims Groan
It was a regrettable day for Juliet Obi when she experienced a dilemma after she deposited money to a scam platform called ‘Olympic’. To her surprise, another person intercepted her account and withdrew her money before she could even purchase an investment product.
Despite several complaints lodged to the platform’s administrator, she was unable to recover her funds.
“Someone logged into my account and withdraw my money. And I did not give my password to anybody.”
“I don’t know how it happened but the person withdrew the money the moment it entered my account”, she added.
Juliet does not suffer the agony alone. Kasim Bello is another victim who was swindled of his N5,100 by the same project. Although he was able to purchase the product after he funded his account, he could not have access to his account subsequently, as another person withdrew his profit.
The customer care service failed to respond to his queries despite his efforts to reach them.
He said: “I made my payment. When it was time for me to withdraw the money, somebody else had already withdrawn the money. And the admin never replied my messages.”
Likewise, Kennedy Peter underwent the same fate. He noted that he was requested to make another deposit to rectify his previous transaction.
“I am frustrated because I made payment since yesterday. Till now I have not seen it reflected on my dashboard. It is so annoying.”
“I cannot even see the order I made and someone who claimed to be an admin gave me an account outside the Olympics page telling me to make another payment with the same amount, so that he can help me rectify the issue. I don’t know who to trust now.”
Cybercrimes Under Nigeria Law
Cybercrimes (Prohibition, Prevention, etc) Amendment Act, 2024, prohibits the usage of computer and internet for a fraudulent purpose, with punishment readily available for an offender guilty of any of the offenses provided in the Act.
Section 22, subsection 3 of the Act prohibits any person to fraudulently impersonate any person or entity, either alive or dead with an intention to gain financial advantage to himself or cause disadvantage to the person so impersonated or some other person.
The punishments available for the offender of the offense upon conviction are seven years imprisonment, or N5,000,000 fine, or both.
The section reads: “(1) Any person who is engaged in the services of any financial institution, and as a result of his special knowledge commits identity theft of its employer, staff, service providers and consultants with the intent to defraud is guilty of an offence and upon conviction shall be sentenced to 7 years imprisonment or N5,000,000.00 fine or both”.
Methods of Avoiding Phishing Scam
In an interview, Sunday Awosoro, a fact-checker, and an expert with considerable years of experience in phishing scams suggested preventive measures to avoid falling prey of ponzi projects.
Since ponzi cons artists aren’t stigmatised in their attack, Awosoro highlights some safe-tips which should be possessed by the general individuals in order to arm themselves against internet scammers.
“Before investing in any platform, it is important for you to dig deep. Check reviews, verify the business through official registries, and be sceptical of platforms that promise high returns with minimal risk.
“You should also be aware that scammers often create a sense of urgency, pushing you to invest quickly so you do not miss out. A legitimate investment will give you time to make an informed decision.”
Credit: Muheeb Mashood, Naomisophyblog
He also advised people to be cautious of platforms that lack transparency, have no physical address, or provide little information about their business model. Also, he advised people to be wary of platforms that require investors to recruit others to earn returns—as this is a classic sign of a ponzi scheme.
When further asked about how state actors can intervene to prevent further attacks, Awosoro believes, a level of a mix of public education, tighter regulations, and cooperation between law enforcement agencies and tech companies is essential in tackling these schemes on a broader level. He similarly said, companies also need to step up by developing better tools to detect and block these scams before they spread widely.
“Educating the public about common scam tactics can raise awareness, while stronger regulations can help monitor and shut down fraudulent platforms more quickly”, he concluded.
By: Muheeb Mashood
The post INVESTIGATION: Inside story of ponzi scammers, duping victims via sham platforms appeared first on Latest Nigeria News | Top Stories from Naomisophyblog.
