By Professor Ehi Eric Esoimeme, Esq., LLB, BL, LLM, JD, PhD, DPROFQAHE, ICA, CAMC, CCO, CPRM, CRA, CFIP, FGAFM, FCACC, FERP, FIMC, HON. FQAHE. Managing Partner of E-Four and AAF, and Professor of Business Law and Ethics at James Hope University Presented as a 2026 NBA Lagos Editorial Board Paper for the Nigerian Bar Association, Lagos Branch
ABSTRACT
This article examines the ever-evolving nature of image laundering schemes and their implementation, and critically analyses the current strategies put in place by regulatory bodies in Nigeria to mitigate the adverse effects of image laundering while providing strategic recommendations to combat the menace. The analysis identifies the misuse of company registration documents, social media influencers and bloggers, search engine optimisation (SEO) and advertising, and generative artificial intelligence systems as emerging trends and changing typologies adopted by criminals to circumvent measures put in place to dismantle and disrupt image laundering. The article expounds on the strategies that can be adopted to ensure the legitimate use of the aforementioned services and platforms while elaborating on additional measures and control mechanisms to strengthen anti-fraud and anti-money laundering compliance within the social media and banking ecosystems, consistent with national and international frameworks.
Keywords: Image Laundering, Financial Fraud, Ponzi Schemes, Influencers and Bloggers, Virtual Assets.
1.0 INTRODUCTION
The threat from investment fraud is changing and evolving at breakneck speed. It is increasing in both volume and complexity, as criminals become more innovative and elusive by exploiting the technological illusions of artificial intelligence to lure unsuspecting citizens into Ponzi schemes. Ponzi schemes, also known as pyramid investments, are a form of financial fraud that lures investors with the promise of high returns but often yields no returns at all, resulting in the potential loss of the investors' total capital.
Since 2016, when the notorious Mavrodi Mundial Movement Ponzi scheme (MMM Nigeria) collapsed with an ₦18 billion ($12 million) deficit, many more schemes—such as Galaxy Transportation and Construction Services, MBA Forex & Capital Investment Ltd, Baraza Multipurpose Cooperative, Chinmark Group, and Crypto Bridge Exchange (CBEX)—have emerged and drained billions from the Nigerian masses under the guise of legitimate investment opportunities. Ponzi schemes have infiltrated nearly every layer of society, driven by aggressive social media campaigns and endorsements from unwitting influencers recruited to launder the image of a company's products and services.
A report from the Foundation for Investigative Journalism revealed that an influencer known as 'Atiinukeh' was one of the earliest individuals to promote CryptoBridge Exchange (popularly known as CBEX) on TikTok. As far back as February 2025, she had invited her followers to invest in the CBEX platform. The report further revealed that another TikTok user, 'Hairdivar', shared a post inviting users to make "cool cash" on CBEX on 21 March 2025. 'Queen Dee' is another high-profile account that actively promoted CBEX before its eventual crash.
This strategy—which involves the strategic deployment of influencers, complex corporate structures, trust arrangements, and artificial intelligence-enabled systems to promote fraudulent and unregistered investment schemes—is formally defined as image laundering. This article examines these ever-evolving image laundering schemes and their implementation, critically analyses the current strategies put in place by regulatory bodies in Nigeria to mitigate the inherent risks, and provides strategic recommendations for combating the menace.
The remainder of this article is organised as follows: Section 2.0 provides a comprehensive overview of the methods adopted by criminals in their image laundering schemes. Section 3.0 critically analyses the current defensive strategies established by regulatory bodies to mitigate the risks associated with image laundering and expounds on effective counter-measures, while the concluding section outlines further systemic solutions to mitigate the inherent risks of image laundering.
2.0 THE CHANGING TYPOLOGIES AND EMERGING TRENDS OF IMAGE LAUNDERING
This section examines the changing typologies and emerging trends of image laundering.
2.1 Image Laundering Through Company Registration, Shadow Directors, and Physical Offices Stationed in Urban Centres
Fraudulent threat actors frequently engage the services of trust and company service providers (TCSPs) and lawyers to incorporate entities on their behalf. These professionals are often leveraged to act as—or arrange for another person to act as—a director or secretary of a company, a partner in a partnership, or an executive within an arrangement involving the creation, operation, or management of a legal structure. The fraudulent threat actors often go so far as to enter into arrangements with company service providers to secure a registered office, business address, physical accommodation, or a correspondence and administrative address for a company, partnership, or any other legal person or arrangement. Furthermore, they utilise these service providers to act as (or arrange for another person to act as) a trustee of an express trust or to perform an equivalent function for other forms of legal arrangements, or to act as nominee shareholders for another person.
This approach attempts to deceive the general public into believing that the individuals hired by the company service providers to stand in as the "public face" or directors of the company are its actual operational directors, thereby allowing the fraudulent threat actors to operate completely by proxy and lure people into investing in their fraudulent schemes. The Pandora Papers investigation revealed how closely certain banks and law firms work with offshore service providers to design highly complex corporate structures. The leaked files showed that these providers do not always know their true customers, despite their clear legal obligations to ensure they do not conduct business with individuals engaged in questionable or illicit dealings.
2.2 Image Laundering through Ponzi Influencers and Bloggers
Image laundering through celebrities, social media influencers, and bloggers occurs when fraudsters approach well-known personalities with large followings on platforms such as Instagram, Facebook, or TikTok to publish glowing public statements about the company's directors and principal officers. The primary objective is to project a highly positive image of the company to the public, thereby gaining the trust of the masses and driving patronage towards the fraudulent products and services of the firm.
Image laundering through social media influencers can also involve criminals hiding behind the established digital profile of an influencer to launder money obtained via fraud. In 2021, authorities in Turkey detained approximately 40 suspects, including 31 prominent Twitch influencers, for laundering over $10 million through the streaming platform. The investigation revealed a sophisticated scheme whereby an organised criminal gang purchased Twitch assets ("bits") using stolen credit cards and sent them to the targeted influencers. The influencers then cashed out these assets, returning the laundered fiat currency to the criminals in exchange for a predetermined commission. This scandal triggered widespread "CleanTwitch" campaigns globally, calling for the strict protection of platform integrity against money launderers.
2.3 Image Laundering through Search Engine Optimisation (SEO) Poisoning and Malicious Advertising
SEO poisoning attacks consist of deliberately altering search engine results so that the top-ranking advertised links redirect unsuspecting users to attacker-controlled sites, generally to infect visitors with malware or to attract traffic for ad-fraud purposes. SEO poisoning effectively exploits human psychology, as users naturally assume that top search results are the most credible, trustworthy, and authoritative. This technique proves highly effective when individuals fail to look closely at the precise URL or search result details. Consequently, it can lead to massive credential theft, malware infections, and catastrophic financial losses. Fraudulent threat actors have focused heavily on SEO poisoning to enhance their digital visibility and attract victims both locally and internationally.
2.4 Image Laundering through the Manipulation and Poisoning of Generative Artificial Intelligence Systems
Companies involved in financial fraud frequently engage the services of cyber-attackers to manipulate generative artificial intelligence systems. This is achieved through indirect prompt injection, a technique where malicious actors embed hidden instructions within public web pages, comments, or carefully crafted URLs. When a generative artificial intelligence system browses, summarises, or searches these infected pages during normal operation, it executes these unintended, hidden commands. Some advanced cyber-attacks go as far as actively poisoning ChatGPT's memory architecture so that the injected instructions persist across future, unrelated interactions. This manipulation results in the generative artificial intelligence system providing fraudulently induced, glowing outputs regarding the financial products and services of the threat actors when questioned by potential investors.
3.0 PREVENTIVE MEASURES IN MITIGATING IMAGE LAUNDERING
This section critically analyses the current strategies put in place by regulatory bodies to mitigate the inherent risks associated with image laundering and expounds on comprehensive measures for mitigating these risks.
3.1 Addressing the Threat of Image Laundering through Company Registration, Shadow Directors, and Urban Physical Offices
The Money Laundering (Prevention and Prohibition) Act 2022 requires Designated Non-Financial Businesses and Professions (DNFBPs), such as lawyers and trust and company service providers, to identify their customers and verify their identities using reliable, independent source documents, data, or information. Lawyers and trust service providers are also required to identify the ultimate beneficial owner (UBO) and take reasonable, risk-based measures to verify their identity, ensuring that the service provider is fully satisfied that it knows exactly who the beneficial owner is. For corporate entities, this mandates that lawyers and trust and company service providers thoroughly understand the underlying ownership and control structure of the customer.
While these due diligence measures are designed to unmask the true intentions and identities of fraudsters, their operational enforcement remains inapplicable to lawyers by virtue of a Federal High Court judgment in Abuja delivered by Justice Obiora Egwuatu. The court judgment invalidated sections 6, 7, 8, 9, 11, and 30 of the Money Laundering (Prevention and Prohibition) Act 2022, ruling them contrary to the provisions of section 37 of the Constitution, sections 20 and 21 of the Legal Practitioners Act, and section 192 of the Evidence Act 2011 regarding legal professional privilege.
To bridge this regulatory gap, law enforcement agencies, such as the Economic and Financial Crimes Commission (EFCC), should work in close partnership with the Nigerian Bar Association (NBA) and its anti-corruption committee to monitor lawyers and ensure robust compliance with anti-money laundering and counter-terrorist financing (AML/CFT) requirements. This monitoring should be performed on a risk-sensitive basis, ensuring that the NBA actively holds its members accountable to their ethical obligations to combat financial crime.
Furthermore, the NBA should implement necessary measures to prevent criminals or their close associates from achieving professional accreditation, holding a management function, or becoming the beneficial owner of a significant or controlling interest in legal practices—principally by evaluating individuals on the basis of a strict "fit and proper" test. The association must also deploy effective, proportionate, and dissuasive administrative sanctions, in line with Recommendation 35 of the Financial Action Task Force (FATF) Recommendations, to swiftly address any failure to comply with AML/CFT requirements.
3.2 Addressing the Threat of Image Laundering through Ponzi Influencers and Bloggers
The Investments and Securities Act (ISA) 2025 contains specific provisions targeting promoters of fraudulent and unregistered investment schemes. Section 5 of the Act prescribes stiff penalties for violations, including custodial sentences and heavy fines for celebrities, social media influencers, and bloggers who promote unregistered and fraudulent investment schemes. However, the borderless and transnational nature of social media platforms means that influencers operating outside domestic jurisdiction can continue to promote unregistered schemes to Nigerian citizens with relative impunity.
The Securities and Exchange Commission (SEC) is therefore advised to work in tight coordination with international law enforcement partners, including Interpol, to aggressively prosecute any Nigerian social media influencer found promoting unregistered Ponzi schemes, irrespective of whether they operate within domestic borders or from foreign jurisdictions. This enforcement mechanism is fully supported by the Mutual Legal Assistance laws of Nigeria.
3.3 Addressing the Threat of SEO Poisoning
Investor education remains central to addressing the threat of search engine optimisation (SEO) poisoning. The Securities and Exchange Commission, Nigeria, maintains an established Investor Education programme where citizens can gain essential investment insights, evaluate market risks and regulations, and make informed choices that align with their financial security. However, more targeted awareness campaigns and cybersecurity training regarding the specific mechanics of malicious SEO poisoning attacks and corresponding mitigation strategies are urgently required to safeguard the populace.
To this end, the National Information Technology Development Agency (NITDA) is advised to launch extensive educational campaigns across multiple public platforms, including digital podcasts and social media networks, to educate and enlighten Nigerians on the hidden dangers of SEO poisoning. Ultimately, citizens are strongly advised to cross-verify all investment opportunities directly with the official Securities and Exchange Commission database before committing any capital.
3.4 Addressing the Threat of Generative AI Manipulation and Poisoning
In Nigeria, the Cybercrimes (Prohibition, Prevention, etc.) (Amendment) Act 2024 was signed into law on 28 February 2024 to strengthen the legal framework for combating cybercrime, particularly in response to rapidly evolving technological threats. The Cybercrimes (Prohibition, Prevention, etc.) (Amendment) Act 2024 includes robust provisions prohibiting computer-related forgery, computer-related fraud, the unauthorised modification of computer systems, network data and system interference, identity theft, impersonation, and electronic card-related fraud.
It also outlines critical preventive measures, making it a legal requirement for any person or institution operating a public or private computer system or network to immediately inform the National Computer Emergency Response Team (CERT) Coordination Centre—through their respective sectoral CERTs or sectoral Security Operations Centres (SOC)—of any attacks, intrusions, or disruptions liable to hinder the functioning of another computer system or network. This ensures that the National CERT can take immediate technical measures to tackle the threat.
Additionally, financial institutions are mandated to verify the identity of customers carrying out electronic financial transactions by requiring them to present a National Identification Number (NIN) issued by the National Identity Management Commission (NIMC), along with other valid supporting documents, prior to the issuance of ATM, credit, or debit cards. Financial institutions must rigorously apply "Know Your Customer" (KYC) principles during documentation preceding the execution of any customer electronic transfer, payment, debit, or issuance orders.
The Cybercrimes (Prohibition, Prevention, etc.) (Amendment) Act 2024 also places a strict statutory duty on service providers to retain and protect specific traffic data and subscriber information in accordance with the provisions of the Nigeria Data Protection Act and as prescribed by the relevant communications regulatory authority. This data must be preserved for a period of two years. Where there are reasonable grounds to suspect that the content of any electronic communication is required for a criminal investigation or judicial proceeding, a Judge may, on the basis of information given on oath, order a service provider to apply technical means to intercept, collect, record, or assist competent authorities with the collection of traffic or content data associated with specified communications, or authorise a law enforcement officer to collect or record such data.
While these provisions are comprehensive and robust, substantial challenges remain regarding implementation and enforcement. Cybercrime is fundamentally borderless; consequently, sufficient resources and advanced data intelligence solutions must be systematically deployed to track offenders and violators of the law operating both within and outside Nigeria. Law enforcement agencies are advised to leverage advanced analytics and cutting-edge detection solutions to locate actors who misuse artificial intelligence-enabled systems.
In terms of preventive measures, the Cybercrimes (Prohibition, Prevention, etc.) (Amendment) Act 2024 currently places significantly more obligations on financial institutions and service providers than on the actual users of artificial intelligence-enabled systems. The National Assembly is strongly advised to amend the Act to mandate that any user of an AI system that generates or manipulates image, audio, or video content resembling existing persons, objects, places, or events in a way that falsely appears authentic to a reasonable person (commonly known as a 'deepfake') must explicitly and conspicuously disclose that the content has been artificially generated or manipulated.
To ensure maximum compliance, the National Assembly is further advised to extend these transparency obligations to the creators and providers of deepfake technologies, making it legally mandatory for them to design and develop AI systems in a manner that automatically informs natural persons that the content created is AI-generated. These targeted statutory reforms will vastly strengthen the overall effectiveness of the Cybercrimes (Prohibition, Prevention, etc.) (Amendment) Act 2024.
4.0 RECOMMENDATIONS AND CONCLUSION
This article has discussed the emerging trends and changing typologies adopted by criminals to circumvent the measures put in place to dismantle and disrupt image laundering, focusing on the misuse of company registration documents, social media influencers and bloggers, search engine optimisation (SEO) and advertising, and generative artificial intelligence systems. It has further expounded on the strategies that must be adopted to ensure the legitimate and safe use of these services and platforms.
This section outlines additional forward-looking strategies to ensure control mechanisms and emerging technologies are fully utilised to strengthen anti-fraud and anti-money laundering compliance across the social media and banking ecosystems, consistent with national and international regulatory frameworks:
- Influencer Compliance Programs: Social media influencers managing commercial promotional networks should be required by regulatory bodies to implement clear policies, procedures, and internal controls reasonably designed to verify the identities of their commercial clients, identify and report suspicious financial activity, and actively prevent fraud, money laundering, and the financing of terrorist activities.
- Due Diligence Mandates: A social media influencer or agency must maintain adequate internal procedures for conducting background due diligence, monitoring transaction origins, and flatly refusing to consummate business relationships or promotional partnerships that facilitate money laundering or other illicit activities.
- Proportional Risk Controls: In alignment with the Investments and Securities Act (ISA) 2025 and its implementing regulations, social media influencers must implement internal controls that are directly commensurate with the risks posed by their clientele, the nature and volume of the promotional and financial services they provide, and the jurisdictions in which their clients operate.
- Inter-Agency and Industry Partnerships: Strategic partnerships cutting across financial regulators, corporate supervisors, law enforcement agencies, and technology industry leaders must be forged to effectively disrupt the illicit use of social media platforms and the banking system.
- Targeted Investigations: Regulators and supervisors should work directly alongside law enforcement teams to investigate, track, and dismantle criminal networks actively exploiting social media platforms for fraudulent purposes.
- Global Intelligence Sharing: Domestic agencies must work closely with international partners, both bilaterally and through multilateral forums—such as the Egmont Group of 164 Financial Intelligence Units (FIUs), the Heads of Financial Action Task Force FIUs Symposium, the Financial Action Task Force (FATF) itself, and Europol—to radically enhance international capacity to investigate and prosecute transnational criminals utilising the social media ecosystem and the banking network for illicit purposes.
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