US fines former Tingo CEO, Dozy Mmobuosi $250M over fraud allegations

A US federal court has ordered the former CEO of Tingo Group, Dozy Mmobuosi to pay over $250 million in fines and prohibited him from serving as a director of a public company.

In 2023, the US Securities and Exchange Commission (SEC) charged Dozy Mmobuosi and three of his companies, including two Nasdaq-listed firms, Tingo Group Inc., Agri-Fintech Holdings Inc., and Tingo International Holdings Inc, with fraud for inflating the financial performance metrics of his companies and key subsidiaries to deceive investors worldwide.

Judge Jesse M. Furman of the US District Court for the Southern District of New York has now issued a final judgment by default against Mmobuosi and his companies after they failed to respond to the civil complaint filed by the SEC in December.

The judge stated that Mmobuosi and his companies had “failed to answer, plead, or otherwise defend” themselves in the case.

Mmobuosi and his three US-based entities have been ordered to pay more than $250 million in fines after the SEC described his business empire as a “fiction.”

Tingo, a fintech group, claimed to have over 9 million customers in Nigeria, primarily farmers, and a food processing business.

However, the SEC’s complaint from last year alleged that the “purported assets, revenues, expenses, customers, and suppliers” of Dozy Mmobuosi ‘s Tingo group were “virtually entirely fabricated,” and the scale of the fraud was “staggering.”

Tingo Mobile reported cash and cash equivalents of $461.7 million for 2022 in its Nigerian bank accounts, but the SEC revealed its balance was less than $50.

Hindenburg, a US-based short seller, raised concerns about the business’s viability last year, labelling it an “exceptionally obvious scam” in a report that caused Tingo’s stock prices to plummet more than 60% on the day of its release.

“We strongly suspect Tingo’s cash balance, which it conveniently claims is held in Nigeria, is fake. The company collected only ~12% of the interest income one would expect from its claimed cash balances. Overall, we think it is a worthless and brazen fraud that should serve as a humiliating embarrassment for all involved. We do not expect the company will be long for this world,” Hindenburg wrote.

After this, DataPro, which had initially assigned Tingo Mobile a long-term rating of ‘A’ with a positive outlook for 2023/2024, announced a suspension of Tingo Mobile’s credit rating.

The charges filed in 2023 came a month after the SEC halted trading in the shares of Nasdaq-listed Tingo Group and Agri-Fintech Holdings due to “questions and concerns regarding the adequacy and accuracy of publicly available information.”

The SEC said the temporary suspension will end on November 28, cautioning brokers and anyone interested in Tingo to “carefully consider” the action it has taken as well as “any information subsequently issued by the company.”

But, on December 18, 2023, the SEC charged Dozy Mmobuosi. And, in a statement on August 28, the SEC said Tingo International and Mmobuosi were ordered jointly and severally to pay a disgorgement of $156.67 million with prejudgment interest of $20.19 million.

SEC said they were also ordered “to disgorge for cancellation all shares of Agri-Fintech stock that Tingo International and Mmobuosi own.”

“Agri-Fintech and Mmobuosi are ordered jointly and severally to pay disgorgement of $12,164,000.00 with prejudgment interest of $574,682.90 and to disgorge for cancellation all shares of Tingo Group stock that Agri-Fintech and Mmobuosi own,” the regulator said.

“Mmobuosi is also ordered to pay disgorgement of $27,632,627.93 with prejudgment interest of $2,032,811.14, to disgorge for cancellation the $204,000,000.00 promissory note inuring to his benefit against Tingo Group, and a civil penalty of $31,908,704.21.

“Tingo Group, Agri-Fintech, and Tingo International are also ordered to pay a civil penalty of $1,152,314.00 each.”

Earlier, on August 25, Mmobuosi said allegations of infractions against his business interests are “baseless and unfounded.”

During the news conference, tagged ‘My Battles with Western Powers: Setting the Record Straight’, the businessman said his success as an African entrepreneur is “perceived as a threat.”

“I am compelled to address the series of orchestrated attacks and false narratives against me and my business interests, Tingo Group and its subsidiaries,” he said.

“My decision to invest in the beverage and telecom industries, as well as my acquisition of Sheffield United, a historic British football club, has been met with resistance and intimidation from the American government and other powerful forces for obvious reasons.

“It is no secret that my success as a Black African serial entrepreneur has been perceived as a threat by some.

“The notion that I, a Nigerian, could achieve such milestones is difficult for some to accept. However, I will not be deterred; I will continue to invest in my country and other friendly and fair countries.”

Days before that, the legal unit of the Nigerian Police Force Criminal Investigation Department (FCID) said there was no evidence to prosecute Tingo Foods, Tingo Mobile Plc and its founder, Dozy Mmobuosi, over allegations of fraud.

Ohiozoba Ehiede, the commissioner of police (legal), in a letter to Kayode Egbetokun, the inspector general of police, dated July 30, 2024, said the companies and the founder should be exonerated because it is “better that 10 guilty persons go free than one innocent suffer… it is about the balance between protecting the innocent and punishing the guilty.”

A complainant, Olayide Ayoola, who was also the acting managing director of Tingo, had alleged fraudulent diversion and misrepresentation of financial report with forged documents against two suspects, Stephen Okafor and Rose Ifedi.

Dozy Mmobuosi gained attention last year when he launched a bid to buy Sheffield United, a Yorkshire-based club that played in the English Premier League last year and is now in the second tier of English football.