Document Type
Dissertation
Date of Award
2-2025
School/College
Barbara Jordan-Mickey Leland School of Public Affairs (SOPA)
Degree Name
Ph.D. in Administration of Justice
Committee Chairperson
Ihekwoaba Onwudiwe, Ph.D
Committee Member 1
Jasmine Drake, Ph.D.
Committee Member 2
Howard Henderson, Ph.D.
Committee Member 3
Emmanuel Nwagwu, Ed.D.
Keywords
Ponzi scheme, fraud, secondary victims, financial literacy
Abstract
Ponzi schemes, fraudulent investment operations that pay returns to earlier investors using funds from new investors, have become a growing concern in Nigeria, particularly since the 2016 economic recession. The proliferation of these schemes has caused billions of dollars in financial losses, plunging millions into economic hardship. While research has extensively documented the effects on primary victims—those who directly invest and lose money—the impact on secondary victims, including family members, dependents, and close associates, remains largely unexamined. This study seeks to bridge that gap by investigating the financial, social, and psychological consequences of Ponzi schemes on secondary victims in Nigeria, utilizing deviant place victimization and rational choice strain theories as conceptual frameworks. This study employs a mixed-methods research design, integrating qualitative and quantitative approaches to provide a robust analysis. Findings indicate that secondary victims were predominantly female and aged 26–35, with most learning about Ponzi investments through informal channels such as word of mouth and social media rather than traditional advertising. Most primary victims lost more than ₦100,000, which had a cascading effect on their dependents, resulting in severe financial instability. Qualitative interviews revealed that secondary victims faced significant financial distress, often being directly reliant on primary victims for their livelihood. Many reported losing access to education and essential resources, with four participants dropping out of university due to financial constraints. The psychological toll was also profound, with participants experiencing heightened stress, diminished self-esteem, and emotional trauma. This study has critical policy implications, advocating for stricter anti-fraud regulations, enhanced financial monitoring, and targeted financial literacy programs to protect potential investors. A collaborative approach involving regulatory bodies, financial institutions, and community organizations is essential in fostering financial literacy and resilience, ultimately protecting both primary and secondary victims from the devastating effects of Ponzi schemes.
Copyright
Copyright © for this work is retained by the author. Any documents and information presented are protected by copyright under US Copyright laws and are the property of the author. All Rights Reserved. For permission to use this content please contact the author or the Graduate School at Texas Southern University ([email protected]).
Recommended Citation
Okosun, Ojeifoh, "The Social Cost of Ponzi Schemes on Secondary Victims in Nigeria" (2025). Dissertations (2016-Present). 112.
https://digitalscholarship.tsu.edu/dissertations/112