Nigerian Mobile Carrier Claiming 'Millions' of Customers Is a Fraud, Says SEC

The SEC sued three connected companies and their CEO for a “staggering” fraud scheme involving a private Nigerian company, Tingo Mobile, that purportedly sourced mobile handsets and services to “millions of farmers” but had “no meaningful operations or customers,” alleged the complaint Monday (docket 1:23-cv-10928) in U.S. District Court for Southern New York in Manhattan.

Defendant Mmobuosi Odogwu Banye, also known as Dozy Mmobuosi, and three companies he controlled -- TIH, Agri-Fintech and Tingo Group – “intentionally and materially overstated their reported revenues, expenses, profits and assets in their SEC filings, public statements, and the books and records they have provided to their auditors,” said the complaint. Tingo Group’s fiscal year 2022 Form 10-K, filed in March, reported a cash and cash equivalent balance of $461.7 million in Tingo Mobile’s Nigerian bank accounts, it said, but true bank records for the same accounts “show a balance of less than $50 for that period."

Since 2019, Mmobuosi, a London resident, and his companies have booked billions of dollars’ worth of “fictitious transactions” through two Nigerian companies Mmobuosi founded, “reporting hundreds of millions of dollars of non-existent revenues and assets,” said the complaint. Beginning in at least 2019, Mmobuosi created fake financial statements and forged documents portraying Tingo Mobile as a thriving enterprise with “hundreds of millions” of dollars in annual revenue and available cash. Over 2019, Tingo Mobile had “no meaningful operations or customers and about $15 in its bank account,” said the complaint.

Mmobuosi used the fake numbers and forgeries to enable fraudulent financial transactions valued at over $1 billion, including the sale of Tingo Mobile to two public companies at “grossly inflated valuations,” alleged the complaint. In August, Mmobuosi effected the sale of Tingo Mobile from TIH, a U.S.-based company he created and owned, to OTC-traded Agri-Fintech in an all-stock reverse merger, it said. In December 2022, Mmobuosi engineered Agri-Fintech’s sale of Tingo Mobile to Nasdaq-listed Tingo Group, “also through an all-stock merger,” it said.

Each merger valued Tingo Mobile at over $1 billion, but the valuations were “supported purely by the fabricated financial statements Mmobuosi crafted and the sham operational success they purported to depict,” the complaint said. Through the transactions, Mmobuosi “enabled Tingo Mobile to access the U.S. capital markets and, in the process, acquired hundreds of millions of shares in the newly merged entities for himself and entities he controlled,” it said.

Mmobuosi defrauded the investing public after merging Tingo Mobile into Agri-Fintech and Tingo Group by knowingly, “or with reckless disregard, caused Tingo Mobile’s fictitious transactions to be recorded in those companies’ books and records” and reported in SEC filings, news releases and investor presentations, “many of which Mmobuosi made and/or certified,” it said. Agri-Fintech and Tingo Group “massively overstated their reported sales, earnings and assets in their publicly-disclosed financial statements for each reporting period in which it owned Tingo Mobile as its principal operating subsidiary,” it said.

The defendants created fake bank statements, falsified general ledgers and doctored documents, then submitted them to their auditors and others “to substantiate their fabricated financial statements,” alleged the complaint. They concealed their fraud “by buying and registering internet domain names in the names of their made-up suppliers and customers,” and then used email addresses from the domains “to pose as these entities’ representatives in sending company auditors confirmation of the entities’ reported balances with Agri-Fintech and Tingo Group,” it said.

This year, Mmobuosi launched a new scheme with Tingo Foods, a fake food processor, the complaint alleged. He “contrived Tingo Foods from thin air -- concocting a fictitious business model predicated on non-existent customers, backed by forged bank statements and other documents, with a corresponding, falsified general ledger,” it said. Mmobuosi sold Tingo Foods to Tingo Group in February for over $200 million. In June, a financial analyst report described Tingo Group as “an exceptionally obvious scam with completely fabricated financials,” alleging that “neither Tingo Mobile nor Tingo Foods appeared to have any legitimate operations,” the complaint said.

Since the report was published, Tingo Group has “doubled down on its lies” and issued multiple denials of the report, said the complaint. In September, Tingo Group named Mmobuosi co-CEO, it said. While the company continues to fraudulently represent its companies’ “fabricated operations” and report “knowingly false financial results” to the SEC, Mmobuosi “is reaping millions of dollars in illicit profits” through illegal insider sales of shares he obtained “through the mergers he fraudulently induced, and by looting Tingo Group’s assets to fund lavish personal expenses,” the complaint said.

The SEC claims numerous violations of the Securities Act, the Exchange Act and the Sarbanes-Oxley Act. It seeks an order temporarily and preliminarily, and a final judgment permanently, restraining and enjoining Mmobuosi and his agents, employees, attorneys and others “in active concert” with him from violating, directly or indirectly, the Securities and Exchange acts rules. The SEC also seeks orders freezing Mmobuosi’s assets, subject to a motion for a temporary restraining order and preliminary injunction and requiring his repatriation of amounts “equal to his ill-gotten gains derived from the fraudulent scheme” as described in the complaint.

The SEC seeks orders blocking Mmobuosi’s companies from directly or indirectly transferring money or property, or issuing new stock shares to him or his agents, and enjoining defendants from selling holdings in Tingo Group or Agri-Fintech stock. It seeks an order requiring defendants to submit a verified accounting of their assets and enjoining them from destroying related documents. It also seeks orders requiring defendants to disgorge ill-gotten gains as a result of SEC violations, to pay civil monetary penalties and for Mmobuosi to reimburse Agri-Fintech for bonuses, equity-based compensation and profits from stock sales. It seeks a final judgment prohibiting Mmobuosi from participating in stock offerings or serving as an officer or director of any company with securities registered under the Exchange Act.