EFCC raises alarm as Nigerians lose N18.7bn to Ponzi, airline discount schemes

The Economic and Financial Crimes Commission (EFCC) has disclosed that Nigerians have lost a total of N18.74 billion to two major fraudulent investment schemes, accusing some banks and financial technology firms of negligence and compromise.

The Commission raised the alarm on Thursday in Abuja through its Director of Public Affairs, Wilson Uwujaren, while briefing journalists on the operations of fraudsters exploiting airline discount offers and bogus investment platforms.

Uwujaren revealed that the combined losses from the schemes amounted to N18,739,999,027.35, adding that one new generation bank, alongside six fintech and microfinance banks, allegedly enabled the fraud through lapses in due diligence.

According to him, the first scheme involved an airline discount fraud, which targeted unsuspecting travellers with offers of discounted foreign flight tickets.

“The modality of these fraudsters,” he said, “involves a string of carefully devised airline discount information that any unsuspecting foreign traveler will fall for. What they do is to advertise a discount system in the purchase of flight tickets of a particular foreign carrier. The payment module is designed in such a way that their victims would be convinced that the payment is actually made into the account of the airline. No sooner the payment is made than the passenger’s entire funds in his bank account are emptied”.

Uwujaren disclosed that over 700 victims lost a total of N651,097,755 through the airline scheme. He added that the EFCC was able to recover and return N33,628,000 to some of the affected victims.

He, however, warned Nigerians to remain vigilant, noting that foreign actors behind the scheme were converting illicit proceeds into cryptocurrency and transferring them through the Bybit platform.

The second scheme, according to the EFCC, involved Fred and Farid Investment Limited (FF Investment), which allegedly defrauded more than 200,000 Nigerians through fake investment packages.

Uwujaren stated that N18,088,901,272.35 was siphoned through nine associated companies offering different investment options. He added that foreign nationals masterminded the operation, with three Nigerian collaborators already arrested and charged to court.

Further briefing on the role of financial institutions was provided by Abdulkarim Chukkol, Director of Investigations, and Michael Wetcas, Acting Director of the EFCC’s Abuja Zonal Directorate.

According to them, “a new generation bank and six Fintechs and Micro Finance Banks are involved in this. The financial institutions clearly compromised banking procedures and allowed the fraudsters to safely change their proceeds into digital assets and move into safe destinations”.

They disclosed that investigations revealed cryptocurrency transactions worth N162 billion passed through one bank without adequate customer checks, while a single customer allegedly operated 960 accounts, all linked to fraudulent activities.

The EFCC called on regulatory authorities to enforce strict compliance with Know Your Customer (KYC), Customer Due Diligence (CDD) and Suspicious Transaction Reports (STRs) requirements.

The Commission warned that banks, fintechs and microfinance institutions found aiding fraudsters risk suspension, prosecution and further sanctions, stressing that negligence in monitoring suspicious transactions would no longer be tolerated.

Uwujaren assured that the EFCC would sustain its anti-money laundering efforts and urged financial institutions to strengthen internal controls to prevent further economic losses.