How a major fraudster almost bought a UK football club

In early 2023, Championship club Sheffield United was on the brink of being bought by Nigerian businessman Dozy Mmobuosi. At the last moment, the deal of €100 million fell through after rumours of a staggering fraud scheme entered the market. To what extent were these rumours true? And what did the fraud scheme look like? Today we will discover the man who made up companies out of "thin air".

Fictional companies

Shortly after the deal fell through, the SEC filed charges against Mmobuosi and his company Tingo Mobile. They claimed he inflated his companies’ financial performance by hundreds of millions of dollars to defraud investors.

The origins of the alleged scam date to 2019 when Mmobuosi used fake documents to portray Tingo Mobile as a healthy business. The Nigeria-based entity, which claims it provides farmers with microloans, had only about $15 in its account that year, the SEC says.

Mmobuosi once sent audited statements of Tingo Mobile to the group’s chair, when in fact no audit had occurred, according to the SEC. The company reported it had a cash and cash equivalent balance of $461.7 million for the 2022 financial year. In reality, it held less than $50 in its accounts.

Fake sales

Mmobuosi allegedly engineered the sale of Tingo Mobile from Agri-Fintech to Nasdaq-listed Tingo Group, meaning the fake revenues were incorporated into the new company.

He then repeated the trick with the sale of Tingo Foods to Tingo Group for $204 million earlier in 2023.

“Mmobuosi and the entities he controls have fraudulently obtained hundreds of millions in money or property through these schemes,” the SEC said in a statement.

The SEC claims tens of millions of pounds were then funneled off to fund his purchase of luxury cars, travel on private jets, and the purchase of Sheffield United, when the club was in the lower Championship league.

$1 billion valuation

Despite these practices, Tingo Group was able to acquire a Nasdaq listing and a clean audit from Deloitte Israel. At the peak, Tingo Mobile was valued at $1 billion even though “almost no one in the industry has ever met someone that uses the product”, said Iyinoluwa Aboyeji, a Nigerian technology entrepreneur.

Aftermath

As of now, the SEC is seeking emergency relief freezing Mmobuosi’s assets and prohibiting his companies from transferring money or property or issuing shares to Mmobuosi.

The story goes to show the importance of extensive client due diligence, especially with these kinds of transactions.

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All the best,

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