In 2015, I went to see my cousin and his girlfriend in a high-end hotel. She was just in town, and he wanted to treat her to the good things in life.
So, as we talked, he mentioned that he had someone available to show me how the scamming industry worked. In his defense, he was a successful businessman, but he thought that because I was tech savvy, I would be good at scamming people for a living; it was a funny proposition that I flatly refused.
Funny enough, it is been ten years and the scam game has created a massive ecosystem in which different people come up with different scam formats, when discovered, they go back and formalize a different strategy, and this has been going on for a very long time.
Now, there is a scam in almost every aspect of life, and different people devise different methods to formulate and formalize it. In crypto you have presale, ICO, IDO, meme scams and many other types of scams. In the government sector, there are people who form a ring and then defraud the government of billions.
In banking, politics, and other areas.
However, one of Nigeria's most successful scams is the Ponzi scheme. Its popularity stems from the fact that it is web2-esque, which makes it easy to relate to.
However, the creators attempt to present it as a type of investment scheme that is appropriate for anyone. Now, these people try to pay influencers as much as possible because they know people trust influencers, and then they seek government support.
Even if they do not receive government backing, they obtain some form of scam certification from a likely ghost government employee with access to government documents. This person will most likely be untraceable because they are not registered, but they do have access to government documents that these scammers can use to operate.
Scammers will always try to legitimize
Now that they know that person will seek some form of legitimacy, they obtain these documents illegally, and they will also promise high APRs to people who will invest in their so-calledbusiness.
No one will question where these people got their financial backing, whether it was from angel investors or VCs. Additionally, these scams will not tell these so-called investors where these APY will come from.
The tactics
They now ask people to deposit $10 and receive $1 every day, which is approximately $30 per month and $360 per year. Just for indefinitely locking up 10 dollars.
Now they will sweeten the deal by saying something like "deposit $1,000 and make $200 per day."
They understand that the second deal is riskier but more profitable, but they still include it for those who are as brave as a lion, and now comes the third deal: invite ten people and get 200$ and earn 5% on top whatever profit or deposit they make.
Now, ten people may appear to be a daunting task, but when people learn about the referral bonus and how it will earn even more money on whoever they refer, they will go on to become personal brand advertisers, eliminating the need for these scam businesses to pay influencers. The sweet deal they'll offer on referral will turn the first alpha scamee (scam victims) to become brand ambassador.
However, how will they get these first customers to deposit money, given that the huge ROI is already raising red flags?
The first psychological conviction that this is a scam is the high ROI, but people will continue to test what they suspect to be a scam for one simple reason: greed.
This greed is what these scam-esque investment schemes will capitalize on. Now these guys already have capital to begin with. Now let's say they raised $100k, it'll be easier to pay
Greed will make you test the water
They understand that people will question whether this ROI is real, but there will be first testers: those who are not afraid of losing $10.
Now, these guys will deposit and make $30 by the end of the month. They'll withdraw the money, test it to see if it's real, maybe use the money to buy a few groceries then they'll be like "oh my goodness" they can't believe they've just discovered a money printing business, then they'll go ahead to deposit 50$ this time.
Now the scammers are actually taking a risk by trusting that these people will remain greedy and deposit more money, but it's the sacrifice for the greater good, and since they initially set out 100k$ capital they still have a lot of money.
Now these people will now begin to hunt referrals (the potential exit liquidity) that's after successful withdrawing their money for 3 months and can now confirm that it's not a scam.
The first group of people becomes grand ambassador
The referrals will now add up to 10, 100, 1000, and 10,000 people. These scam businesses now have enough money to rob Peter to pay Paul. So what they'll do is remove the initial 100k$ investment and start running a classic ponzi.
Now at 100k people the business will have generate millions of dollars. Why do I say millions of dollars? I say this because there will be people who will put in their pension, their retirement funds hoping to x1000 this money in just a year.
Now, perhaps after 3 to 7 years of generations and hundreds of millions of dollars, these guys engineer an exit scam, rug the website, and walk away with all the money. Now people will wake up hoping to log in to their site to check their investment only to see that the website is not working.
Now, if the owners of these scams have already been doxxed, which means their identity is known to the public, they will come out and say their site was hacked and the hacker stole the money, but they will also say they are doing everything possible to find the hacker.
If they are not doxxed, they will most likely disappear, fly to the Bahamas or Dubai, and transfer the money to foreign bank accounts or run it through crypto.
Conclusion
Scams always work because scammers do everything they can to avoid making you believe the already established red flag. They try to convince you to trust them, and when you do, they hit.
These guys are mostly successful in Nigeria because they capitalize on people's greed. They try to rebuild their reputation and establish a track record, and when they finally do, they strike.
Interested in some more of my posts
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Monopoly Is the Death of Civilization
Survival: Choas and Scarcity
Crypto: Gut & meaningful Connections
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What Are Some Things You Should not Do During A Bull Market Year?
