MMM, Loom, Racksterli, 7 other Ponzi schemes that cost Nigerians their fortune

• Ponzi schemes have promised unusually high returns on investment, but ultimately led to significant financial losses for many Nigerians.
• The list includes infamous schemes like MMM, Loom, and Racksterli, as well as more recent ones like Cheil and Crowd 1
• TheRadar has compiled a list of the top 10 Ponzi schemes that have affected Nigerians.

Nigeria has, unfortunately, been a breeding ground for various Ponzi schemes that have left many financially devastated. With the country's economic crisis, many citizens have been easily deceived by the quick money scheme. These schemes have promised unusually high returns, often disguised as investment opportunities, only to disappear with investors' funds. 

From the infamous MMM to more recent schemes, Nigerians have repeatedly fallen victim to these scams.

TheRadar curated the top 10 most notable Ponzi schemes that have affected Nigerians:

1.MMM

Credit: BusinessDay NG

Mavrodi Mundia Moneybox—MMM came to Nigeria as a salvation in November 2015. It introduced itself as a social financial network of people who provide help and get help from each other. 

Members were supposed to receive 30 per cent on their investment in just 30 days.

Unknown to many, it existed before, starting in Russia, China, South Africa, Zimbabwe, Kenya, Uganda, and Nigeria.

To begin with, an individual can invest as little as 15,000 naira, which is paid directly to another member. The idea is that after 30 days, every member reaps their profits, and guiders get a 10 per cent cut of the new members' investment.

After months of aggressive advertising and recruitment drives, MMM Nigeria suddenly froze its operations on December 13. Members expecting payouts were left disappointed. The scheme attributed the freeze to heavy traffic ahead of the Christmas holidays, promising to reopen in January 2017. While some remain sceptical, others continue to defend the scheme. 

Many who relied on this company as a source of capital had to face the harsh reality that they had been scammed.

2. LOOM 

Credit: FTC

Loom Money Nigeria is another Ponzi scheme that some Nigerians were victims of. It involved a money contribution, and the amount invested would yield an 800 per cent return on investment in 48 hours. 

Loom Money was reported globally with names such as ‘Loom Circle’ and ‘Blessing Loom’. In Nigeria, Loom Money operated via Facebook and WhatsApp in 2019 and crashed the same year. 

The Loom scheme required individuals to recruit eight new members, who would then bring in eight more, creating a never-ending chain. However, the scheme's reliance on referrals ultimately led to its downfall. Before it was banned, those who invested in Loom were left to mourn the loss of their hard-earned money.

3. Racksterli

Credit: ICIR Nigeria

Racksterli was introduced in Nigeria as an online investment platform that doubles the amount invested. 

Racksterli, owned by Michael Oti, was a Ponzi scheme that promised unusually high returns on investment within a short period of 45 minutes. 

Initially, the scheme promised returns within 30 days, but this was later reduced to 45 minutes. The scheme eventually crashed in June 2021.

Racksterli gained significant attention, particularly due to promotion from prominent figures such as Nigerian singer, Davido and Dino Melaye. It ended in tears for Nigerians who fell victim to it. 

4. Twinkas

Credit: ICIR Nigeria

Twinkas is a donation-based platform that promised a 200 per cent return on investment. The platform where members donate N5,000 to N50,000 to another member and, in return, receive 200 per cent of their donation from two other assigned members came as a shock to Nigerians who had just experienced the MMM scam. 

The get-rich-quick syndrome and obsession with easy money have led some Nigerians to continue plunging into Twinkas as a coping strategy in the face of harsh economic realities.

However, this platform also crashed, leaving several people in financial debt. 

5. Cheil

Credit: Cheil Tv

Cheil is the most recent Ponzi scheme company to invade Nigeria in 2024. This platform came with a very promising technique and team that gained lots of trust from ‘employees’. However, it seems to the scamming company that a game is a game. 

Cheil Worldwide Inc. came as a global advertising and media company under Samsung Group. However, a platform claiming to be affiliated with Cheil emerged, recruiting online employees to promote movie videos and earn commissions. The platform claimed to offer a win-win situation, where merchants increase visibility, and employees earn money.

Interested individuals registered at various levels (S1-S3), and their daily task was to watch movie thrillers and earn commissions with weekly withdrawals. 

Referring more people led to higher ranks, salaries, and staff positions. However, the platform introduced new policies, including Quick Refund, auto investment, and AI help watch, before eventually freezing activities, using heavy traffic as an excuse, similar to MMM.

Unfortunately, those who joined late were left with significant losses, making this December difficult.

6. iCharity

Credit: iCharity.Club.Nig

iCharity Club is a peer-to-peer donation platform that allows members to donate directly to each other. The platform claims to be a global network of donors, open to anyone worldwide. iCharity operates with levels and grades, the lowest being Grade 1. Grade 10 is the highest and the more donations you make, the higher up the spectrum you go until you hit the highest point. It also accepts donations in cash as well as cryptocurrencies. 

However, due to its unsustainable business model and lack of transparency, it was flagged as a potential Ponzi scheme. Many were victims of this Ponzi scheme company

7. Crowd One

Credit: Crowd1 investment platform 

Crowd One is a relatively new platform that allows fundraisers to collect donations directly from members, and all participants are only required to have a smartphone to expect immediate refund with interest within 2 hours. The system is designed for individuals, charities, schools, clubs, and other organisations. 

However, its business model has raised concerns about its legitimacy, as it relies on the continuous referral of new members to sustain itself.

8. Ultimate Cycler

Credit: X

Ultimate Cycler was founded by Peter Wolfing, a United States-based network marketer. The platform requires members to donate N12,500 to a fellow member, after which the system promised to provide a return of N50,000. Members can also recruit new members to join under them, potentially increasing their earnings. However, this platform has been identified as a Ponzi scheme due to its reliance on recruiting new members to pay earlier investors.

9. Givers Forum

Credit: NairaLand forum

Givers Forum is another Ponzi scheme that has gained popularity in Nigeria. Members are required to donate funds to other members, with the promise of high returns. The platform claims to provide a mutually beneficial system where members can provide and receive financial assistance. However, its business model is unsustainable and relies on the continuous recruitment of new members. 

10. Pilvest

Credit: SEC NG

Poyoyo Investment (PILVEST) Nigeria Limited is a Ponzi scheme that promised unusually high returns on investment. The company offers four investment plans with varying minimum investment amounts and promised returns. To invest, one can choose any option from A to D, ranging from a minimum of #100,000 with a 20% return of investment for a month to a maximum of N1,000,000 with a promised monthly ROI of 30% and a total ROI of 360%. 

Despite how thrilling the deal is, the Securities and Exchange Commission (SEC) warned that Poyoyo Investment (PILVEST) Nigeria Limited is not registered with the commission, and its operation is a classic example of a Ponzi 

scheme required to invest in larger deals, which ultimately led to the 

As the economic recession in Nigeria persists, the financial community is becoming increasingly aware of various Ponzi schemes and fraudulent activities that have emerged during this challenging period. The implications of these schemes are significant, and many individuals are affected as they navigate the difficult economic situation while striving to secure their livelihoods amidst challenges. 

Nigerian banks lost $42.6 billion to fraud in Q2 2024, FITC reports

Meanwhile, TheRadar earlier reported that the Financial Institutions Training Centre (FITC) made it public to the press that Nigerian banks lost N42.6 billion to fraud in Q2 2024. 

The Q2 2024 loss marks an 8,993% increase compared to Q1 2024 and a 637% rise from Q2 2023 losses, and FITC recommended that banks enhance security by adopting AI-driven monitoring systems and conducting unannounced internal audits to detect irregularities.