The Association of Certified Fraud Examiners (ACFE), Southwest Nigeria Chapter, has hinted at the dangers of Ponzi schemes to anti-fraud professionals and investors, warning that such opportunities are often hallmarks of fraudulent operations.
Chairman, Board of ACFE, Southwest Nigeria Chapter, Prof. Godwin Oyedokun, at a training, urged them to take extreme caution regarding the investment opportunities that promise rapid and exceptionally high returns.
Speaking on the theme, Oyedokun expressed concern on rising investment scams and Nigerians’ vulnerability, citing the CBEX collapse and the floating of similar schemes, pyramid schemes, almost immediately after the CBEX trauma.
Noting that both Ponzi and pyramid schemes share some similar modus operandi, like relying on participants’ money to pay earlier investors, promising unrealistic high returns and eventual collapse, Oyedokun stressed the need for Nigerians to familiarise themselves with their nuances to be circumspect.
According to him, investors must guard themselves ahead with early warning signs to avoid victimisation and financial loss.
He listed some red flags as high, consistent returns, secretive strategies, complex explanation and pressure tactics, even as he further cautioned the investors against greediness, tasking them on financial education and responsible behaviour.
Oyedokun, also a management expert, said: “Ponzi schemes disguise as legitimate investment, portray a single investment vehicle, and often claim earnings from fake profits. Pyramid schemes, on the other hand, emphasise recruitment, require buying in and lack real products.
Facilitator at the training and a Forensic Accountant, Dr Kennedy Iwundu, challenged fraud examiners to up their game in tackling fraudulent endeavours, noting that the ease with which scammers infiltrate systems was alarming.
“A collaborative approach between fraud examiners and lawyers is essential. Together, they can dismantle these schemes and seek justice for victims by tracing funds, identifying irregularities, and providing expert testimony in legal proceedings,” he said.
President of the ACFE South West Nigeria Chapter, Dr Lydia Ajayi, said the training was critical at this time, calling for more sensitisation and knowledge update of both investors and fraud examiners.
“By sharing expert insights and best practices, we aim to create a more vigilant and informed community that can spot and stop these schemes”, she said.
