Imu Yinusa and Goodness Omeiza, who are both, promoters of Ovaioza Farm Produce Storage Business Limited, maybe the first to test the efficacy of the new Investment and Securities Bill (ISB) 2023 recently passed by the National Assembly, and awaiting the assent of President Muhammadu Buhari.
The trial of the three, including the company, Ovaioza allegedly involved in a N2billion Ponzi scam and which Justice Inyang Edem Ekwe of the Federal High Court, Court 7, Abuja has slated to commence May 4, 2023, may set the precedent for what await promoters of Ponzi schemes in Nigeria’s judicial system.
The trio was alleged to be operating as fund managers without the approval of the Securities and Exchange Commission (SEC) among others. This, the commission regards as a Ponzi scheme which it has warned the Nigerian public against.
The SEC had in March 2022 sealed up 27 Abeokuta Street, Garki Abuja office of the company on suspicions of illegally collecting money from the investing public to the tune of N2b while not registered with the Commission.
A Ponzi scheme is a fraudulent investing scam promising high rates of return with little risk to investors. It is a fraudulent investing scam that generates returns for earlier investors with money taken from later investors. It involves paying existing investors in a non-existing enterprise with the funds collected from new investors.
A new provision in the new ISB empowers SEC to handle the Ponzi scheme and its promoters.
In the five-count charges brought against the company and its promoters by the Federal Republic of Nigeria, they are alleged to have on or between the year 2020 and 2022 within the jurisdiction of the honourable court did commit a felony to wit: with common intent conspired among themselves and their staff to lure and offer for subscription an unregistered collective investment scheme valued over N2b to the unsuspecting general public including Umejiaku Chikodili Crystal, Omolabake Ale, Obi Sandra P, Nnaemeka Franklin Ugwoke, Ismaila Malum, Kelechi Anayo, Nkiru Onyima, and others.
The first count read, “That you Imu Yunusa, Goodness Omeiza, and Ovaioza Farm Produce Storage Business; all of house No. 27 Abeokuta Street, Area 8 Garki, on or between the year 2020 and 2022 within the jurisdiction of this honourable court did commit a felony to wit: lured and offered for subscription an unregistered collective investment scheme valued over N2b to the unsuspecting general public including Umejiaku ChikodiliCrystal, Omolabake Ale, Dr. Obi Sandra P, Nnaemeka Franklin Ugwoke, Fonon Ismaila Malum, Kelechi Anayo, Nkiru Onyima, and others.
“You thereby committed an offense contrary to and punishable under Section 54 of the Investments and Securities Act, 2007”.
In the second count, the Commission charged that “You Imu Yunusa, Goodness Omeiza, and Ovaioza Farm Produce Storage Business; all of house No. 27 Abeokuta Street, Area 8 Garki, on or between the year 2020 and 2022 within the jurisdiction of this honourable court did commit a felony to wit: a conspiracy of forming a common intention amongst yourselves together with your staff to do an illegal act – diversion of investment funds valued over N2bn belonging to the investing public including, UmejiakuChikodili Crystal, Omolabake Ale, Obi Sandra P., Nnaemeka Franklin Ugwoke, Fonon Ismaila Malum, Kelechi Anayo, Nkiru Onyima, and others. You thereby committed an offense contrary to and punishable under Section 516 of the Criminal Code Act, laws of the Federation of Nigeria, 2004.
The third count also states that “You Imu Yunusa, Goodness Omeiza, and Ovaioza Farm Produce Storage Business; all of house No. 27 Abeokuta Street, Area 8 Garki, on or between the year 2020 and 2022 within the jurisdiction of this honourable court did commit a felony to wit: obtained over N2billion from the unsuspecting public including, Umejiaku Chikodili Crystal, OmolabakeAle, Dr. Obi Sandra P, Nnaemeka Franklin Ugwoke, FononIsmaila Malum, Kelechi Anayo, Nkiru Onyima, and others under the pretense that you are a registered Fund Manager, of which you are not. You thereby committed an offense contrary to and punishable under Section 1 (1) of the Advanced Fee Fraud and other Fraud Related Offences Act, 2006 and punishable under Section 1 (3) of the same Act”.
The defendants are also alleged to have committed offenses contrary to Section 383 (2) (f) of the Criminal Code Act, Laws of the Federation of Nigeria, 2004, and punishable under Section 390 (7) of the same Act.
The Senate version of the ISB was passed last week and will be harmonised with the version by the House of Representatives passed last December.
The Bill which is expected to aid the functioning of the capital market and facilitate the ongoing economic diversification in the country among others prohibits Ponzi schemes that have been used to swindle unsuspecting members of the public by fraudsters posing as capital market operators.
