Offline Ponzi Investement Scams

Updated: 08/04/2010 12:49
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offline ponzi investement scams
Encyclopedia investor. HYIP history. Offline frauds with using Ponzi scheme. Examples of offline Ponzi followers. Their development and eventual collapse.
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Today we gonna chew over the do to death model of Ponzi scheme, though not the online (which is affiliated with HYIP industry), but the one which is happening in the real life. The followers of Ponzi flourish not only in the Internet, as it appears to be. The well-known scheme has found its wide usage offline. In our everyday life Ponzi scheme is the substantial instrument of fraud, which in many instances is working for decades as in the headline-making case of ex-NASDAQ spokesman Madoff. Of course there are many examples of less successful projects and some of them are even curious. But nevertheless, both offline and online investors are equally unsecured.

In an everyday life burglars immensely use various psychological admissions playing with soft spot tactics. While in internet scams are usually based on admonishing with statistics and facts. In real life they are usually based on psychology. When you meet person nose to nose you have to play differently. That's why the Ponzi Scheme props use it in not so rudely opened manner. Trying to hide and mask the truth. For instance, where scammers drawn by the promoter's charismatic personality, Christian evangelism and promise of doubling donors' money within six months.

They have given encouragement to Hundreds of religious, educational, cultural and charitable organizations. After-awhile, unsolicited more than $551 million to the foundation. Promising two dollars for each invested in his creation - New Era Philanthropy. Later they were found guilty in 82 counts of fraud, money laundering and tax code violations. The explosive mixture of desire to gain some profits and help, released to be in truth explosive. It seems that those scammers didn't even have to pay the principals. The promise to take back the funds was with a vengeance superfluous.

Another example of playing on people's believe... The Internet missionary church Greater Ministries International Church GMI took in over $550 million dollars from over 27,000 believers. They have been promising great returns from heaven. The shortfall of one half of the money has been accounted. Believers were told their money would double in installment payments made over 17 months or less. Investors were overpersuaded by the famous quotation from Luke 6:38: "Give, and it shall be given unto you." In their efforts to lure contributors to make more donations to the Greater Ministry Ponzi scheme after regulatory complaints, officials of the organization spoke of a "mother lode" of gold worth $40 billion that they found in Liberia a mere 15 feet below the surface... guess that needs no comments, sure thing they were all convicted and fined for a pretty penny, but still people had smelt a rat too late and lost shift.

So, as you may notice the religious cases are quite of an often phenomenon on up to Ponzi scheme. The reason seems to be that religious people are inclined to believe scammers, if any subject rises. Except for godbox, people also used to believe to their friends and relatives. But frequently we do not not even imagine the true standings of our closest friends or parents or they may dupe, so if you feel any inkling, it's better to reject, want to lose a friend - invest him some... :)

Among interesting examples is the case of BP Oil worker. While he was having money troubles, he decided to fall back on friends help. While he decided not to divulge that he was having troubles with American Ecpress account. But decided that it would be easier to scam his circle of contacts. Right now it is too intricately to define whether he had wanted to gain profits or not, but he surely lost his friends. And that is his story.

After he had caught the sight of money need, he thought the legend. The legend was that. Well, he had said that his company BP Oil had a special program for executives that proposed high returns while shelling out chicken-feed. Unfortunately, it is not known now how much he promised to pay back. Using that legend he completed $525,865 of 44 investors. Eventually, for non-stop investing he started to pay out some. And that is exactly our good old Ponzi scheme. He manged to pay back only $242,513. The leftover of vig, unfortunately, he has spent.

As it appeared to be aftermath, he hadn't been an executive of BP Oil and they didn't have any of that programs. The scammer has not invested anywhere. But the interesting fact is that 12 of 44 managed to profit. That proves that in any pyramid, even in obvious one, there are place for luckies. Herein the percentage of them was 25% in toto. If his friends have done with, I guess he would continue some more.

In their morbid money itch, both scammers and ingenuous investors can't stop vex each other. Whereby during some period of time everybody live happily and in peace, but after a while the reckoning comes. And behind the one side of participants authority troubles arrive, from other side problems of emotional and financial character appear. One promoter effected his schemes by creating a series of limited partnerships, which as explained in respective partnership prospectuses, was to acquire rights in various oil and gas producing properties, allegedly located in Texas, Ohio, Louisiana, Mississippi, Oklahoma, or Belize.

In fact, very little of the $150 million raised was actually invested in oil and gas properties. Rather, in self-dealing, the great bulk of monies were actually commingled and diverted for the "promoters" own use and benefit to sustain lavish lifestyles and to pay fictitious "dividends" to earlier investors in other limited partnerships. They deliberately promoted a false sense of financial well-being. Sure thing that promises appeared to be the Ponzi scheme and the long process of investigation has started-up...

Not less popular among offline scammers are fields, which are prominent of their investment abilities. The next thing that comes to mind after stocks and Forex is of course real estate. That field has brought to us solid crop of examples. Here's the one to tell you.

Starting out as a legitimate enterprise, the Hill Williams Income Funds was created to set up as a means of raising capital for real estate development. Over four years, the owner managed to establish four funds which allowed him to raise $89 million offering limited partnerships to the general public. Firstly the company was not conceived in scam, but after about two years they were clearly on a downfall. And so he decided to begin soliciting investors for Fund IV while diverting new funds to earlier investors in order to lull them into a false sense of security. By using new monies to pay old costs and interest payments to prior investors, he converted his real estate venture into a classic Ponzi scheme. "The hallmark of a successful investment scheme is the appearance of legitimacy", Manella said.

Precisely because this real estate venture started-up as a legal, he was later able to lull and deceive thousands of investors. He enforced his scheme by regularly mailings to existing and prospective investors and by meeting with them on often bus tours. On those meetings and through the mailings, he reassured investors by saying that new projects had been successfully created. His Ponzi scheme finally collapsed when the funds were forced into bankruptcy. He returned guilty to the mail fraud charges and obliged to pay approximately $30.5 million restitution to approximately 2,500 investors duped in the scheme.

As the conclusion we had best say that in distinction from online investors, whether investors are mostly familiar with principals of performing "Ponzi scheme", in real life people sometimes find themselves helpless in resistance doubtful money making opportunities, whereby also must admit shams manifest their inventive qualities and people can't just simply believe that this kind of quackish scheme may 'follow bard on heels' them in the race for killings. But we often overlook that in our everyday life there are not less scammers than at Web. Sure thing we were only taking closer look on several examples, the real number of which is unfortunately numerous. Skilled scammers happen to be on every street corner and online solution of HYIP investments is not the exception. To admonish, we will surely get back to that topic again in the future. To tell you other cases, which, we hope, will help you to be ready, not only to offline scams, but in sphere of HYIP investments.


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