I
have received lots of emails in the last month and the offices of Trident Press
have been inundated with calls about some of the latest Ponzi Schemes going
around. People are so convinced they are real.
Some months ago, I was inundated with people asking me about
Freeland Opps. They had set up a great website with all the “trimmings”, even
had a chat room. They were offering 190% every 2 or 3 months and even some
higher returns. All very impressive! I had a senior police officer contact me
and asked me to get involved. Now, this doesn’t happen every day. I thought I
should give it some attention and see what was really going on with Freeland.
Well, on investigation, it had all the hallmarks of a Ponzi Scheme (a scheme
where new investor’s money is used to pay the return to earlier investors). For
example, it was completely anonymous, there were no names or addresses used,
there was no phone number, the returns were out of this world, they didn’t
describe how or where they made money, their banking was obviously done in
unregulated jurisdictions and through “passthrough” accounts………….. A Scam of
monumental proportions!
I contacted the senior police officer and told him I thought it
was a scam and to get his money out. He respected my opinion, but thought I was
wrong on this one. You see….. he was getting regular returns and he was happy.
He was of course compounding them, as most people do, so he hadn’t seen a cent,
but he was happy and he thought I was wrong. However, he knew people who were
getting REAL CASH, I explained that with a Ponzi Scheme, there is always a
number of people who get paid, that’s how others are encouraged to get involved.
Well, Freeland Opps was a scam, it has in the last few months collapsed, and all
the money is gone and I haven’t heard from my police officer friend since. He is
either too embarrassed to contact me or he is nursing some fairly severe
financial wounds. I never found out how much he invested…. Sorry, gambled,
because that’s what it is.
At
the moment, there are hundreds operating on the net and some, just as “good” as
Freeland Opps in their presentation is an “MLM” scheme. Don’t be fooled by
flashy presentation, apparent transparency andin some cases “member conferences”. This
is all part of the deception. Yes, you will also have friends and acquaintances
tell you they are making a fortune and that you should be involved. They will
even show you their statements and show you they are making 300%,
400%
or even 600% pa. Your greed will consume you and you’ll soon be pulling out your
cheque book or credit card. Keep in mind however, that very few will show you
money going into the bank, because most will compound their money….. “this is
how to really get rich”. Numbers on a statement is not cash in the bank. Having
said that, there will be people who DO get real cash, because they have decided
to take cash, and some Ponzi schemes are happy for this to happen, because it
backs up their claims and almost “legitimises” them. Most people compound and
this is how Ponzi schemes are able to manage their cash flow. Remember, there
are no profits… just cash flow. Millions in……. hundreds of thousands out….. the
balance, the organisers get to keep when they decide to “shoot through”. And
they will, in 100% of all cases they do. Here is a list of scams that I was told
I was wrong about. In every case when I told people I thought it was a scam, I
was told “this one is different”, “Mr Spicer, you need to do more homework”,
“You don’t know what you are talking about” and then there were the really nasty
comments which I can’t print here.
Wattle Group, Freeland OPPS, Sabre, Stock Generation, Quantum,
Oxford Savings Club, Le Club Prive, Global Prosperity, Tri-West and there are
plenty more.
Part of the story that you will often hear is that the profits
(sometimes 100% per month) are made by trading secret bank debentures that the
organizers have access to. This is nonsense. Think about it for minute. Let’s
take a typical scheme, one that makes say 600% pa. I’m using numbers that a well
known scheme has claimed, so I’m not making it up. They have 30,000 members that
have put in on average $ 750 each, this is equal to
$ 22.5m.
After one year this will have grown to $ 2.9 billion based on their
monthly compounding at 50%. Now lets take it out just a further couple of years.
After the second year the scheme, with not one new member would be worth $ 252
billion! After three short years of operation the scheme will be worth
approaching $ 33 TRILLION dollars! Does this make sense? Let the scheme run for a
fourth year and you have generated more money than the Australian economy! If
this is possible, why aren’t governments and companies doing this? It would cost
say BHP Billiton $ 22.5m to produce a profit in three years of $3 3 Trilllion,
making it bigger than the next 1,000 companies put together. Why would you
bother mining? You can hear the directors saying already pass me my credit
card!!
Now, to the second scenario……The Banks. There are a lot of people
that say the banks are doing some very mysterious trading of “bank debentures”
(hence why you can earn such huge returns in these schemes). According to the
legend, the banks are making between 500-1000% pa.
Now, let’s think about this, and I’m going to put in brackets the
common response that people who “believe” in these things often come with.
If banks made this sort of money, why would they lend you money at
7% for your home loan? (because the Government forces them to lend us the
money at those rates)
If banks were making even 500%pa on their money, why do their
profits only rise by moderate amounts each year, possibly 7-20%? What about NAB,
that lost money? (Oh, it’s all “under the table”, you know, not in the
books)
How do they hide Billions of dollars without the Tax Department,
The Shareholders, ASIC and Customers finding out? If the directors were caught
they would go to jail. If the shareholders find out they’ll take action against
the Bank, and it’s the shareholders money, so why don’t they get told about it.
Where are they hiding the money and why doesn’t this amount of money being
hidden appear anywhere, we must be talking about Trillions of dollars! Do they
keep it in the bank or where? (………. Uh, I
dunno?)
There you go, if you think about it, none of it makes sense. It
does not add up.
The facts are simple.
These “investment schemes” always
fail.
They always include secrecy and mystery as part of the
deal.
The returns are ridiculous which replaces intelligence with
greed.
The people involved are never accessible, even if they do tell you
their name (if that’s really their name).
The numbers never make sense. The amounts of money involved always
ends up being in the Billions or Trillions (thousands of
billions).
There is absolutely no evidence, that hasn’t been falsified, to
support any of these claims.
Ponzi schemes always pay people at the start as this gets people
excited and greedy. Without some people getting paid, no one else would
“invest”.
These schemes are always based outside of western countries or
they exist in cyberspace and give the impression they are based in a “normal”
country. This is because these schemes are illegal in the USA, UK, Canada and
Australia.
In many cases it’s very unclear how they generate profits………
why?
Now, there will be a some of you that will say I’m talking
rubbish. You have evidence that you or your friends are making money out of a
particular scheme, and I’d say great! You have become involved in a Ponzi Scene
at the early stages of it’s limited life and as I have said earlier, some people
do get paid because they use you as the “Patsy” to get all your friends and
family involved to keep the money coming in.
Over the years I have heard of families being ripped apart and
good friendships ending over someone being the “promotional patsy” for a scheme.
Think long and hard before you tell people about your “money making scheme”. I’m
not trying to “rain on your parade” or be a complete cynical pain in the butt,
but I’m trying to save you the anguish of losing your money and friends.
There are plenty of great investments out there, there’s no need
to waste your money on Ponzi Scemes. i.e. those in my High Yield
books.
If you would like to know a lot more about these schemes and learn
who’s operating them, I suggest you read my book Scams and Frauds.
My book Scams and Frauds details exactly how these and
other “opportunities” operate, (In Chapters starting at pages 22, 112, 159 I
describe exactly how schemes like this work and who they are. Follow
this link to find out more:www.tridentpress.com.au/category18_1.htm
