Drama of an obdurate PONZI INVESTOR
(Mr Mellow has been waiting for Barr. Ojulari in his chambers for more than three hours, he has been served with three bottles of soft drink and two package of chicken and chips which he has completely eaten all, except for the last bottle of soft drink that he was still drinking, which he held in his hand. Barr. Ojulari entered the Chambers with his intern and they went straight to his office, Mr mellow joined him.)
MR. MELLOW: You are welcome, I have been here since morning, your Secretary informed me that you were in Court (he gulps in the remaining content from the bottle in his hand)
BARR. OJULARI: How is work and family my friend?
Mr. Mellow: All is well with my family, I am here because of my work.
BARR. OJULARI: Hope there is no trouble?
MR. MELLOW: Partial No! I want to quit that work, I have gotten another big offer which I can utilise and start earning big amount of money from it monthly.
BARR. OJULARI: What offer is that?
MR. MELLOW: A better offer, an offer that is better than lecturing in a government university, that the government may even delay my salary sometimes.
BARR. OJULARI:Could you please tell me more about this lucrative offer that is so good to have convince you to attempt to resign from government work?
Mr. Mellow: Go through this document, I want you to read it with a legal mind before I sign on it.
(He hands over a document to Barr. Ojulari)
BARR. OJULARI: (Opens the document) This document stated the terms of agreement between you and XYZ Company.
MR. MELLOW: Yes, that company is a God sent, it gives me an opportunity to invest any amount of money I can and I will be given 40% Return on investment every month. This opportunity is not for me alone, it is open for anybody who also wants to join this life saving investment.
BARR. OJULARI: This is surprising! They even stated it here that you will be refunded with all your investment fund with interest anytime you don’t want to do anymore.
Mr. Mellow : Honestly, I have not read that part, that is essence of having a lawyer. I am planning to sell my pieces of land at Lekki and Abuja to realise up to 500 million naira and invest it on this business.
Barr. Ojulari: Great! That means you will be earning 200 million naira every month, without doing anything.
Mr. Mellow : That is why I like that investment, in fact, I want to use all my life savings to invest on this.
Barr. Ojulari: They even state it here in this document that, they are a team of expert in Real estate, Agriculture, Oil and Gas, Haulage, and many other lucrative businesses. That they will use your money and that of others to invest in these businesses and give you the profit according to the rate of your investment.
MR. MELLOW : Yes of course.
BARR. OJULARI: How did you get to know this company?
MR. MELLOW : I heard their advert on a popular radio station. I have even visited their office in Ibadan where I was given this document.
BARR. OJULARI: Now, as a lawyer, what do you want me to do in this matter?
MR. MELLOW : You are not serious my friend, are you not the one that usually tell me that I should always consult a lawyer before I make any business transaction?
BARR. OJULARI: OK friend, you are too brilliant! As a matter of law, this type of investment is called PONZI SCHEME. It is illegal in Nigeria. All Ponzi scheme establishment is a fraudulent. The worse part is that, the money you invest in it will not be recovered if it later gets in dispute. Even the SEC or CBN may come after them (1).
MR. MELLOW : No, don’t tell me that. Those mad WhatsApp guys that usually send you a message to send 50,000 and get 100,000 in some minutes are what we know as Ponzi scheme. This is called shares. What do you mean?
BARR. OJULARI: There are differences, A Shares represent ownership of a company, when you buy a Shares in a company, you become a shareholder and it gives you the opportunity to make decisions in that company(2), can you make a decision in this kind of investment?
MR. MELLOW : I don’t think so.
BARR. OJULARI: No Ponzi scheme organisers will admit that they are running a Ponzi scheme, they will either call it Shares or Partnership. Those people often promise to invest your money and generate high returns with little or no risk, but those fraudsters do not invest your money , they use it to pay those that have invested earlier and keep the rest for themselves (3).
MR. MELLOW : Are you so sure?
BARR. OJULARI: Yes, with little or no legitimate earnings, ponzi scheme requires a constant flow of new money to survive, the scheme will collapse when new investors are no more coming in (4).
MR. MELLOW: Ah! Does that mean that they rob peter to pay Paul?
BARR. OJULARI: Yes. Meanwhile, in Nigeria, only bodies that can collect money from the public with the promise of paying it back with interest are banks and other bodies established by law to carryout such business. (5)
MR. MELLOW : This is something else.
BARR. OJULARI: In fact, no body is allowed to carryout financial business in Nigeria other than Insurance and Stockbroking, unless it is incorporated in Nigeria and has a valid license from the Central Bank of Nigeria(6). Does your new company has a valid license from the CBN?
MR. MELLOW : I don’t know. But why will I not be able to recover my money, I am innocent and I don’t know all this before.
BARR. OJULARI: Firstly, ignorantia juris non excusat, ignorance of the law is not an excuse. You won’t be able to recover your money because Ponzi is illegitimate and fraudulent in Nigeria (7) and any money which is invested on illegality can not be recovered to you by the Court, because Courts are forbidden to enforce it, or allow itself to be used to perpetuate illegality (8), if the court can not recover your money back for you then where would you think you can get it back if matter arises on the said investment?
MR. MELLOW : OK, what about those people that established it?
BARR. OJULARI: Those people are liable on conviction to imprisonment that is not less than five years or 10 million naira fine or both imprisonment and fine.(9)
MR. MELLOW : Good!
BARR. OJULARI: Even an individual that invites people to invest on ponzi is liable on conviction to 100,000 naira fine and a corporate body who invites to ponzi will be fined with 500,000 naira on conviction.(10)
MR. MELLOW : Thank God, I am save. I have a competent lawyer..
BARR. OJULARI: This is why I must tell you, whenever anyone invites you to invest or partner in a business, ask the person if the company is registered under CAMA, are returns promised realistic? Imagine this one says you’ll be paid 40% of your capital every month. Even 5% monthly is not realistic. Finally, does the business make huge amount of their capital solely from the public?(11)
MR. MELLOW : But what will happen to the money of those that invested, since the court will not order them to refund it to the investors?
BARR. OJULARI: It will be forfeited to the Federal Government of Nigeria.
MR. MELLOW : You have just saved me from what may lead me to depression, stroke, and even madness! I am very grateful. Heard that your first son is now sitting WAEC, don’t worry I will offer him scholarship to abroad to study medicine that he says to study. All bills on me.
BARR. OJULARI: Ah! Thanks my friend I’m very grateful.
(They were both served a plate of hot pounded yam with egusi soup and plenty meat by the chambers’ cooks)
Abdulrauf Abdullahi Adebayo is a law student, a Content creator, a Dynamic writer and a Ghost writer. He can be reached via 09034904883 and [email protected]
WORD BANK:
(1). OBDURATE: Refusing to change one’s opinion or course of action.
(2). SEC: Securities and Exchange Commission,
REFERENCES:
[1] OCHEDI & ORS V. CBN & ORS (2018) LPELR-45316 (CA)
[2] https://www.nibusinessinfo.co.uk/content/what-are-shares <accessed on 23rd May, 2022>
[3] <https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-alerts/investor-18> <accessed on 23rd May, 2022>
[4] The Nation, “Ponzi Schemes: Legal hurdles to ‘investment’ returns recovery”, retrieved from <https://thenationonlineng.net/ponzi-schemes-legal-hurdles-to-investment-returns-recovery/amp/> Accessed on 20th May, 2022.
[5] Section 67 (1) of the Investment and Securities Act (ISA) 2007
[6] Section 57 (1)’and Section 59 of the Bank and Other Financial Investment Act (BOFIA), 2020
[7] MEKWUNYE V. LOTUS CAPITAL LTD & ORS (2018) LPELR-45546 (CA)
[8] UNITRUST INSURANCE CO. LTD V. AMBICO SENDIRIAN NIGERIA LTD (2012) LPELR-15417 (CA)
[9] Section 57 (5) of the Bank and Other Financial Investment Act (BOFIA), 2020
[10] Section 67 (2) Insurance and Securities Act (ISA), 2007
[11] O. G. Chukkol, “Matters Arising on The Fall of Chinmark Company”, retrieved from https://www.facebook.com/100003817221624/posts/2408606509276566/?app=fbl accessed on 18th May, 2022.
