Dozy Mmobuosi, the founder of Tingo Group which claims to operate agriculture and fintech businesses in three continents, was charged by the U.S. Securities and Exchange Commission with “massive fraud” on Monday (Dec. 18).
The SEC alleged that Nigeria-born Mmobuosi had engaged in a scheme since 2019 “to inflate the financial performance metrics” of three U.S.-based entities that form the Tingo Group. The SEC published a 72-page complaint filed at the U.S. district court for the Southern District of New York demanding a jury trial.
Part of the SEC’s statement read: “Tingo Group’s fiscal year 2022 Form 10-K filed in March 2023 reported a cash and cash equivalent balance of $461.7 million in its subsidiary Tingo Mobile’s Nigerian bank accounts. In reality, those same bank accounts allegedly had a combined balance of less than $50 as of the end of fiscal year 2022.”
The SEC also alleged that Tingo’s customer base is fabricated, that Mmobuosi “fraudulently obtained hundreds of millions,” and has diverted money for spending on luxury cars and private jet travels.
The securities regulator suspended trading of Tingo’s NASDAQ shares in November, citing “questions and concerns” surrounding the company. But the fuse had been lit in June after Hindenburg Research, the New York-based short seller, branded Tingo “an obvious scam” in a report. Tingo’s response to that report was that “its financial results are accurately reported within its financial statements and its SEC filings.”
Tingo group, which is listed on the NASDAQ exchange, says it is profitable as a group. It came to prominence in February 2022 when Bloomberg reported that the company was looking to raise $500 million and was already valued at $6.3 billion. The group claims that it has a commodity export business in Dubai, an insurance brokerage with 130 offices in China, and 12 million Nigerian rural farmers as customers. Mmobuosi was also in contention to buy a British football club earlier this year.
The SEC wants to obtain an order that would freeze Mmobuosi’s assets, and subsequent judgments that would ensure he and his entities were stripped of money made from the alleged multi-year scheme. Three members of the SEC’s New York office are leading the litigation.
A section from the SEC’s complaint reads as follows: “Defendants created fake bank statements, falsified general ledgers, and other forged and doctored documents and submitted them to their auditors and others to substantiate their fabricated financial statements.
“Defendants also concealed their fraud by buying and registering internet domain names in the names of their made-up suppliers and customers; they then used email addresses from these domains to pose as these entities’ representatives in sending company auditors confirmation of the entities’ reported balances with Agri-Fintech and Tingo Group.”