Investment Scams - Be warned, beware [MERGED: FrancSwiss]

[wildthing]

A friend of mine is into paper trading, he shared me some current scams in the paper trading business for warning. I thought I might need to share these info:

Someone inquired about FRANCSWISS. It is a scam. I thought I should share some blogs about scams with you. Here we go.

From Wikipedia under "Ponzi Scheme":
http://en.wikipedia.org/wiki/Ponzi_Scheme

Quote:
In October 2006, in Malaysia, two prominent members of society and several others were held for running an alleged scam, known as SwissCash or Swiss Mutual Fund (1948) . SwissCash offered a returns of up to 300% within a 15-month investment period. Currently, this HYIP investment is offered to citizens of Malaysia, Singapore, and Indonesia. It claimed investors' funds were channeled to business activities ranging from oil exploration to shipping and agriculture in the Caribbean. The company claims to be operating out of a New York and incorporated in Commonwealth of Dominica.[5] [6] [7]

This is a warning to everyone. These goons are active in the Metrowalk area (Bullfrog cafe) or any prominent internet cafe location. They use internet cafes as "trading floors" for their racket. They target middle class yuppies with the lure of high returns--even quoting the performance of stock markets/forex markets for their cause.

Please do not fall for it. If you know anyone who is a current "victim"--advise them to get their money out immediately (if they can). Please help curb this nasty practice. Ponzi schemes appear during bull markets.

Previous similar scams include:
1. Multitel Investment Corp (not related to the stock)
2. G Cosmos Marketing
3. Kendeigh Foreign Exchange
4. Grand Post International
5. Mateo Investment Group

SMFUND is the "older" incarnation of Francswiss. They had some of their members post advertisements in ebay.ph trying to get people who are looking for quick money to join in. It is not related to SM Fund of Henry Sy grp.

A cardiologist called Dr. Lynne Rivera, formerly of of Makati Medical Center (she is about to be kicked out of there) is another person to watch out for (says an acquiantance) - and her "First Domain" supposed finance company which closed down.

Another blog post: "guys there is a new one: Equitrust FX International Corp. its address Suite 709 Manila Bankers Building. Ayala Avenue, Makati. 5% interest a week and take note $200K ang investment mo! alam nyo guys yun person behind this company as far as i know ay may mga previuos ventures na talagang questionable! ang pinagtataka ko hanggang ngayon d pa rin cla nahuhuli!"
In case memories are short:

Kendeigh Foreign Exchange (c. 2002)
http://www.offshorebusiness.com/mess...=5577&page=123

Mateo Management Group and other ponzi scams
http://www.mlmwatchdog.com/3_MLM_Philippines.html

G Cosmos of Japan (remember that Japanese dude who put large billboards on Edsa? Claiming to want to "help the Filipino people"?)
http://www.iht.com/articles/2002/03/30/mjapan_ed3_.php

SEC Brochure on "Investment Scams"
http://www.sec.gov.ph/advisory/SEC%2...y,04182002.pdf

More history lessons:

This was Rose Baladjay's Mutitel Investment Corp:
http://money.inquirer.net/features/p...1&dd=11&file=1

It's always the same story of these fraudsters. Once they get a good thing going, they go nuts and start spending their money like Babylon. If it looks too good to be true, it probably is.

Courtesy of Mark T Market:
To be fair, I think the common practices deserve a brief discussion.

MLM/Network Marketing

We begin with Multi-Level Marketing (MLM), which is actually a legitimate business model. The original premise of MLM is to build a performance-based business model by building incentives on two levels: 1) product selling and 2) agent recruitment (hence multi-level).

Product selling incentives are in the form of "overrides"--meaning if an agent sells a product, not only is the agent provided a commission, but the agent's recruiter also gets one. This practice is very common in pharma, applicance and real estate sales. Through "overrides" agents are also encouraged to recruit other agents to benefit from their Network.

The other level is when new or prospective agents pay a membership fee to sell a product. This is the same concept as "franchising" where you pay the person owning the franchise for the permission to market their product. Through franchising, a new level of incentives was created, since now existing agents could get a commission for getting new ones by being paid a cut from the franchise fees.

It is on the franchising side that the abuse starts. Since the franchise fees can be substantial and are paid upfront, it oftentimes earned the agents more money to get new recruits than to encourage their existing network to sell the product. The business model is now turned upside down as new recruits are hired to get more recruits and so on.

Now a recruitment based incentive business is lopsided--since it only relies on money from new recruits to earn. The business earns only as fast as new agents get in. Should the existing network stop, only the earnings dry up--and no one loses anything, although the newer recruits will have less value for their franchise fee since they were not able to benefit for the same amount of time as their recruiters.

But the next abuse happens when recruitment is based on the promise of future returns.

Ponzi/Pyramid Schemes/High Yield Investment Programs

You'll know a multi-level marketing business has turned into a pyramid scheme when the company and the recruiters are promising to pay you a guaranteed return on your franchise fee/investment.

By creating a promissory liability this imposes unfair economics on an already lopsided business model. Now the network HAS to get new recruits, or it will default on its obligations--which were the original reason why the network grew in the first place. Once the new recruits dry up, the payments stop, and unlike a franchise, investors in a pyramid scheme are given the option to withdraw their money (it's just like an investment after all). And when the principals are withdrawn, this creates further pressure on the network, until it eventually collapses.

Strictly pyramid/ponzi schemes don't really say upfront that the money they will be paying you will come from the principal of the next investor. However, there are also common occurences of pyramid/ponzi schemes combine with MLM methods and advertising by giving you an incentive for getting newer investors. In both cases, the money still comes from new recruits.

Fraudsters

The final leg of abuse is by the owners of these companies themselves. Especially in the case of ponzi pyramids, which as discussed are already unstable by the sheer economics of it all, the owners are often aware that their good fortune isn't there to last, so they further complicate things by spending the principal money themselves. And spending company capital for personal reasons is a bad thing for any business, legitimate or otherwise.

Testing

Just ask one question to check if "the next big hit" is a ponzi scheme or not:

Does this business earn from anything else apart from new recruits (whether up front or by referral)?

In strictly pyramid/ponzi schemes, it may be difficult to figure out that they are just robbing Peter to pay Paul--so just think: if they can afford to pay me this much, they must be investing it in something that can pay more. And if it's a 100% return per month (or something outrageous to that effect), better try to figure out what kind of business in the universe of capitalism can effect such returns consistently and legally. If you can't think of anything, stop trying to justify it.

BE VIGILANT PLEASE.

[Lucius]

Nung sinabi ko to sa friend ko na scam yan. Sya pa galit hahahahaha. Tapos sabi ko ingat lang at ipull out mo na ang pera mo habang maaga pa. Bumalik na daw pera nya sa kanya... $45/day daw. Eh inask ko if 100k ba ang pinasok nya, oo daw - mag 1 month pa lang. Pano nya mabawi yung 100k eh $45 x 30days x P45+ = wala pang 100k. Pati ba naman ako lolokohin...........

Dapat sa mga nag-FrancSwiss dito satin ipa-XXX and Imbestigador.

EDIT: Isa pa yatang technique un ng mga network scammers, ung ipafeel sayo na sayang at parang nagtatampo sila para mapilitan ka na mag-join. Dapat dito "RECLUSION PERPETUA" or i-electric chair hehehehe. Para di na makaloko ng madaming tao. Lalo na ung mga "PIONEERS" na sobrang yayabang pag tumba na ung networking tambay na lang sa bahay.

[empy]

nasan na yung nag-aalok ng Francswiss dito sa tsikot nung isang araw? :evillaugh

and that other dude that said you would make 3% a day :hysterical:

[B2Bomber]

as they say, if it's too good to be true, it must be false...hehe

good thing I ran into this article, gotta warn some friends... thanks for the info

[B2Bomber]

double post...

[Lucius]

nasan na yung nag-aalok ng Francswiss dito sa tsikot nung isang araw? :evillaugh

and that other dude that said you would make 3% a day :hysterical:

Baka na-electric chair na ni misis, hehehe

[Syuryuken]

Hintay-hintay ang ako ng babarahin ko alam ko may biglang susulpot sa mga susunod na araw.

[oldblue]

EDIT: Isa pa yatang technique un ng mga network scammers, ung ipafeel sayo na sayang at parang nagtatampo sila para mapilitan ka na mag-join.

totoo nga yan. mayroon ako kababata dati na-meet ko ulit sa malls after so many long years of long time no see. exchange cell numbers pa kami. one time tumawag sa'kin, san daw ba office ko para lumabas daw kami.

instead na magkwentuhan about our lives, eh networking pala ang pakay. I casually rejected his proposal. akalain mo ni hindi man lang ako inimbita sa wedding nya na 2 months after. sa dyaryo ko pa nalaman. nun magkasama pa naman kami nun HS, nagbibiruan kami ng sya bestman ko at ako bestman nya

bad trip yan networking/pyramiding schemes. if you value friendship a lot, wag nyo ibebenta yan sa mga kaibigan nyo. delikadesa na lang

[tawengo]

this is so timely! my father is into SM FUND. ma print ko nga to at mapabasa sa kanya.. thanks for the info..

[shotokan]

Dapat sa mga nag-FrancSwiss dito satin ipa-XXX and Imbestigador.

isumbong mo kay Ben "BITAG" Tulfo... para matuldukan na yan!