Friday, 5 May 2017
Opinion: Trumpcare is Trump cares nothing about you
Friday, 21 September 2007
Old-fashioned Ponzi Schemes as HYIPs
Making Mo-Sense about money
I have to give credit to Roosevelt at MoThanSkin who has enlightened me on a matter that has quite fascinated me.
I have lately been reading of so-called High Yield Investment Plans (HYIP) in Nigeria where in one instance a bread-winner took her life with rat poison having been swindled out of her entire savings.
The draw of these “Get Rich Quick” schemes that promise outrageous returns not obtainable in any legal business setting is amazing; the person has to suspend belief in financial reality to be involved; though many participants proselytised into these schemes never realise how they are being conned until they have been completely fleeced.
Persuading the greedy
Generally, a person is persuaded to invest a sum for a guaranteed return well above the odds, sometimes 200%, the wary investor tests the waters with a token amount and gets paid in the allotted time.
This emboldens the investor to jump in with both feet, if not borrowing to invest, at which point the investment goes into a black hole and the agency either has tales to tell or the personnel just disappear into thin air.
No shelter for the fool
Considering these schemes do not have regulatory control of financial agencies or customer protection, the need to beware is evident as customers can also be profiled for their greed and gullibility see how much more they can be enticed to part with their money as fools.
The play on words that redefines an old scam as a new financial instrument is interesting, but like I read on MoThanSkin, these are all variations on Ponzi Schemes. At various times know as Pyramid Scheme, Multi-Level Marketing and now the more professionally sounding High Yield Investment Program, Global Currency Arbitrage or Hedge Futures Trading.
They are all like snake-oil remedies that have the bite of a snake and are lethal enough to cause fatalities, both financially and literally.
Playing on trust
The scheme are generally unsustainable over time, relying on new entrants to feed the promised returns of the earlier entrants; eventually, new entrants run out leaving everyone out of pocket apart from the promoters who would have gone to ground and disappeared.
Whilst I am not saying people should not invest in these schemes much as the risk of loss is too compelling to do otherwise, sometimes like the gambler in Kenny Roger’s Gambler, those who have made it have known when to walk away and been intuitive enough to know when to run.
However, if the investor is entranced by initial returns, they should reflect on the standard small print on any financial investment document – past performance is no guarantee of future success, even if it is your very next investment.
Looking out for a scam
These are elaborate confidence tricks that earn your trust and confidence to then scam, defraud and dispossess the victim.
Like Roosevelt notes from culling the Wikipedia entry that I have also quoted below; the characteristics of Ponzi Schemes are simple.
* In a Ponzi scheme, the schemer acts as a “hub” for the victims, interacting with all of them directly. In a pyramid scheme, those who recruit additional participants benefit directly (in fact, failure to recruit typically means no investment return).
* A Ponzi scheme claims to rely on some esoteric investment approach, insider connections, etc., and often attracts well-to-do investors; pyramid schemes explicitly claim that new money will be the source of payout for the initial investments.
* A pyramid scheme is bound to collapse a lot faster, simply because of the demand for exponential increases in participants to sustain it. By contrast, Ponzi schemes can survive simply by getting most participants to "reinvest" their money, with a relatively small number of new participants.
Get out now!
Someone somewhere is in one of these schemes who has gained some return from a business model that has no underlying fundamentals and is ready to sell the world to get similar returns but would come completely short and lose everything like the gambler that has gone “all in” against a Royal Flush with just a high card.
Any scheme like this is a sinking ship and you had better bale out or jump like a rat before you go down into a watery grave of the many that belong to the fraternity with the motto – A fool and his money are so soon parted.
Reference
Friday, 15 September 2006
Certifying gullibility in Nigeria
Great opportunities in Nigeria
Somehow, I have always had a sixth sense about when a scam is in the offing. This goes back long way when I was a service technician in the eighties with an IT services firm in Nigeria which had very good initiation ideas but got run down by the happy-go-luck lifestyle of the owners. Quite sad.
I owe a lot in my career to the foothold IT Systems Limited gave me into IT and other interesting things I when on to do with high volume desktop publishing with Deji Sasegbon & Co Publishers who published the Nigerian Supreme Court Cases in 30-something volumes then using PCs and Xerox Ventura Publisher which put us well beyond the work Gani Fawehinmi was doing with older publishing methods.
Almost dazzled with red mercury
So, this interesting day, we got a call that from an office in a Lagos suburb of Ketu to help them fix computers. Hardly had I gotten there, another man arrived trying to get us interested in some deal that involved red mercury and turning black pieces of paper into wet 10 Naira notes.
Red mercury has always been the stuff of unbelievable myths, enough to engage and where you lose your guard you are done.
Somehow, he had 4 million of those notes that he had to pick up from the airport and he needed financial assistance to acquire more red mercury to process the notes, I was to raise 10,000 Naira and would eventually end up with 4 million Naira.
Now, would sound incredible to anyone, but I just knew within me that nobody makes money that easily except in a lottery, the danger was that once the deal was completed, there was so much at stake that rather than flying with the mile-high club, one would steady six feet under with the inheritors being the partners in the crime.
I walked away and thankfully, I had left no details about myself with them, now, in Europe, I would have been off to the police, in Nigeria, it was best to pretend nothing had happened live your life in peace.
Same crime different medium
So, when I started getting emails pertaining to the Advanced Fee Fraud – 419 scams, it did not take too much to realise this was variation on my earlier experience.
Unfortunately, many are too wide-eyed with gullibility to some extent, greed in others and plain foolish having suspended reason for fantasy, they get their fingers burnt and are fleeced of the pennies and pounds they have saved up all their lives.
Nigeria now has an anti-graft agency called the EFCC, this somehow strikes fear into those who cannot account for how that have come into so much wealth. Sometimes, it is as if everyone is a Cinderella with a fairy god mother who waves the wand and the next day you are rolling in money like it is going out of fashion.
There are many who are getting hounded justly to account in much more detail about the provenance of their wealth, some have even fled the country to avoid being apprehended, but the interesting part to it is how many of the old hands on the oil tiller are getting implicated by these investigations.
An instrument for bias?
Despite all this, the agency is susceptible to accusations of bias and the possibility of being used as a political tool for people who can pull strings in the agency like to Presidency to get at political opponents.
A number of cases have arisen where Nigerian citizens nabbed for money laundering abroad and rather than the Nigerian exercise the kind of interest that would allow for those cases to be dealt with in Nigerian courts and under our justice system, our Attorney General gets carted off to argue cases to keep those culprits abroad.
That ploy has in cases backfired because sometimes foreign justice systems would rather not wade into the murky waters of explaining the intricate matters of the Nigerian constitution or do the dirty work of other vested interests.
The Emperor’s funny certificates
Anyway, what is most interesting is that another scam as a result of the work of this agency is now being perpetrated; some people are issuing corruption-free certificates very much like one might get with a credit reference.
Some people are buying these certificates which they hope would be some sort of absolution testimonial when seeking political office or engaging in some business activity.
Well, what can I say? Does having a corruption-free certificate give me the confidence to deal with someone who has been so easily fooled?
This is the stuff the Emperor’s new clothes is made of and whoever came up with that idea must be both enterprising and a nasty crook, just as we have been educated this week about pretexting with regards to the investigation of Hewlett Packard directors, the clever crooks have been pretexting as EFCC officials with the authority to issue certificates which might be about being corruption-free but that does not make the recipient incorruptible.
Like with every scam, a fool and his money are soon parted.
Saturday, 9 September 2006
Your greed will serve you badly
When a good friend sent me this piece of news, I smiled and as he noted, it might interest me, it does.
I have always heard of the Prosperity Gospel, a message delivered in certain Christian congregations of the Pentecostal persuasion, I, for one have not fully appreciated the content or context, but I know what living the good life is all about.
In my perspective it is not about women, wanton living, bling and hedonism, rather, it is about having enough to be liberal in giving, being ready and resourceful to tackle issues and being able to see a way out of whatever situation as well as understanding contentment.
Whilst money is important, wisdom is the principal thing, one has to be smart about the use of time, resources, people, opportunities and trials.
The pastor was a bigamist
The piece of news I am concerned about is that of a Pentecostal priest who apparently died in an air crash in Nigeria intestate.
At death, he was eulogised, praised and lauded as a patriotic and selfless Nigerian, well, the truth has erupted like a long dormant volcano that has returned with vigour.
He had a second wife, so he was a bigamist, that secret became front page news when the first and second wife entered into a tussle about the pastor’s estate as it transpired that he was worth about $55 million.
One can imagine the shock when the first wife realised that she had a rival and surely, she would have wanted to prove that the other woman was an impostor.
But once she had ascertained that this woman was who she said she was, any level-headed arrangement would have allowed for them to come to some sort of amicable settlement and split the loot in two.
All for me and none for you
Well, they did not, because one who have felt deserving of more than the other and their lives flash before them about a life of grandeur with $55 million rather than $27.5 million as hedonistic insurance.
If, these women had listened the beautiful preaching of their late husband rather than sought to practise the acts of the self-same man, they probably would have been wiser and smarter about the corruption of great riches in the hands of those who have worked for nothing.
23 things to accounts for
The legacy of the man has already been destroyed as the evil men do does tend to live after them.
Anyway, their altercation on how to split this largesse came to the notice of the anti-graft and anti-corruption organisation in Nigeria and they waded in and impounded the whole inheritance because not proof could be found of how a pastor and electoral officer came into such great fortune stashed away in hydra-headed bank accounts numbering 23. Short intake of breath.
How is it that in this case too, two fools and their late husband’s ill-gotten money are soon parted? Because your greed would eventually serve you badly.
Tuesday, 25 January 2005
Avarice Anonymous
Dear Partner