Fresh revelation from the 2016 annual report of the Nigeria Electronic Fraud Forum (NeFF) has shown that as at the time the Mavrodi Mondial Moneybox (MMM) Ponzi scheme bolted away from Nigeria on December 13, 2016, over N11.9 billion was trapped and subsequently declared lost by gullible subscribers.
Explaining more while launching the NeFF 2016 annual report, CBN’s Director, Banking and Payments System and NeFF Chairman, Mr. Dipo Fatokun, said the Nigeria Interbank Settlement System (NIBSS) report of the Nigeria fraud landscape for 2016 indicated that fraud cases grew by 82 per cent over the 2015 figures, attributing the trend to the increased usage of new payment platforms.
The report revealed further that “No fewer than 23 banks received inflows amounting to N28.7 billion executed in 460,000 transactions through the MMM Ponzi scheme. The amount put into the scheme between November 13th and December 15th, 2016 (through interbank transactions) totals over NGN11.9bn. This amount was largely not recovered”.
“To put this amount into perspective, the 2017 budget for Defence Headquarters is N4.7 billion. This implies that the amount transferred by Nigerians under the MMM Ponzi scheme would have funded the Nigerian Defence HQ almost six times over.
“Majority of the transfers made by customers of banks that participated in the MMM Ponzi scheme were made through the account-to-account transfer platform.
“This was followed by the mobile channel, and lastly, through the web channels of other transfer platforms in the industry,” the NeFF report noted,
It added that 34 financial institutions paid out money for investments into the MMM Nigeria Ponzi scheme, adding that the customers included those of commercial banks, mobile payment operators as well as mortgage banks.
“By the side are the amounts, in terms of volume and value for each financial institution that money was paid out from. Fewer banks received inflows of MMM transactions than the number of banks from which outflows occurred,” the NeFF report stressed.
According to the report, the peak of the MMM investment was in November 2016, when over N13 billion was transferred among the participants, pointing out that the CBN had in the middle of 2016 warned about the dangers of the scheme.
According to the report, despite the 82 per cent increase in reported fraud cases, the industry was able to reduce fraud by 2.7 per cent when compared to the 2015 figure.
“Comparing the attempted fraud against the actual losses, the industry was able to salvage 49.7 per cent of the total amount attempted by these fraudsters within the year.
“These figures informed us that there are more attempts on a yearly basis with different innovation tricks or modus operandi to take advantage of the system,” the NeFF report said.
The report also noted that 2016 witnessed a significant transaction increase across all payment channels in both volume and value in spite of the economic recession.
“In contrast with 2015, there was a 71.43 per cent spike in the volume of transactions processed through the NCS (Nigeria Central Switch),” it said.
