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  ADVANCED STRATEGIES OF SCAMS
 

                         
                        ADVANCED STRATEGIES OF SCAMS

                                     by Ajibola Aries


There seems to be no limit to the extent to which online fraudsters in the HYIP industry can go in order to either cheat clients or to outrightly dupe them. And when you look at the way and manner these acts are perpetrated, it stinks volumes of corporate heartlessness towards other human beings.
 

We will take Forexcompanyonline (FCO), Cherryshares, Topfinancial, Atox Finance Alliance, Oilstructure, Cash Tanker  and Genius Funds - all defunct, as part of our case studies. Each of these defunct investment programs adopted a number of techniques that deceived investors, but for each case study, we are going to mention one or two of the very smart methods with which they earned the confidence of unwary investors before taking off with investors' money.
Forexcompanyonline is an important case study because it was the most recent case out of the above mentioned programs and it was also one of the two that we once featured on this website. Moreover FCO also became an industry leader and became so trusted to the extent that a lot of people were putting their big bets on it even during its days of decline – simply because the program had appeared so strong and most investors just couldn’t imagine it closing down at all in 2011. Yet, in March 2011, FCO closed down.

 If we take a look at a couple or so developments in FCO during its heyday and towards its time of closure, one will understand why a lot of people were fooled.

First, Forexcompanyonline almost from the beginning kept adding more and more payment processors, including the bank money transfer systems of many reputable banks in the countries of
Eastern Europe, Russia and a couple or so other CIS countries. This was an exercise that FCO sustained up till its end days, thereby giving a rather strong impression of not only seriousness, but, very importantly, corporate connection, exposure and continous expansion.
Not only that, in the last weeks of its existence, on the Home Page of FCO appeared a project entitled ‘TRAININGS FROM FOREXCOMPANYONLINE’. Whatever it really stood for, (since by that time having seen the doomsday coming, we didn’t bother to enquire about whatever FCO could offer again), it was taken to be a good news mostly by novices in the industry, and also by die-hard optimists. The consequence of this is that most investors saw Forexcompanyonline not only as a serious program, but also as one that was still developing and aiming to keep developing. When an investor looks at a program this way, it is practically difficult to see doomsday coming. Rather, such investor is more likely to be interested in investing more money and going more rounds. However, the brains behind Forexcompanyonline actually programmed things to work exactly this way. They initiated and sustained those developments to deceive people that they were up and doing and getting stronger and stronger.

Also, in the last quarter of 2010, another defunct program, Cherryshares, also an industry leader at the time, announced a more or less comprehensive re-arrangement of its plans which was called ‘JANUARY 2011 OUTLOOK’. The main thrust of the new look January 2011 Cherryshares was that there would be a switch from payments on calendar days to payments on business days, with the profit margins remaining essentially the same. By this announcement, investors were thus deceived to start looking beyond December 2010, when in fact the Cherryshares people had already secretly made up their minds that they would pull the plug before December 2010 Christmas. And truly they did. The rest is now history.
The lesson should not be lost on present and future investors in online programs. The fact that you see evidence that a program keeps developing does not necessarily prove that it is credible, neither is it a reason to calculate that it will last.

 Sometime in November 2010, a notification came from Forexcompanyonline entitled, ‘WHO OWNS $350?’ According to this release, someone had sent $350 to Forexcompanyonline but the money was unclaimed and the owner not known. The release was asking a rightful claimant to come forward. Later same day, another release came from the site that the owner of the said $350 had been found.
If one looks at the way FCO went scam a few months later without apology, one can easily speculate – and conclude, that the November 2010 missing money story was merely a guise by FCO to create a false impression of transparency and honesty with the aim of winning more investor confidence. It takes a fraudster of an above-average intelligence to use this type of scheme to deceive people. It was at least enough to convince many people that FCO was honest, transparent and credible. In short, it was a case of FCO pretending that they found someone’s missing money and that they looked for the owner, found the owner and returned the money to the rightful owner. Lost in the euphoria of always getting paid on time by FCO at that time, how many people would have resisted taking this bait?

Another way of looking at the incident is to give FCO a benefit of doubt and assume that the unclaimed money story was true. If this were the case, the brains behind FCO, in their diabolic intelligence, were smart enough to bring the missing money incident to the attention of investors – all in order to fool them by giving a false impression of transparency and honesty.

 Some fraudulent investment websites will even be the ones that turn themselves into security advisors, teaching clients how to protect their accounts and the money in it from hackers and other online and offline thieves, when in fact such websites are the ones that have made plans to defraud you in the end. Topfinancial, also an industry leader in its time and one of the contemporaries of Genius Funds (also defunct), went to lengths in this art of deception. At the bottom of each payment notification email from Topfinancial was always a number of tips on how clients/investors can protect their accounts. Seeing such sound security advisories, how many people would have suspected that it is the same giver of such security tips that would turn around to eventually steal their money? The truth is that scam websites deliberately give security tips, not because they love you, but as a deception tactic to sway you into investing more of your confidence in them. The security tips they give you can be useful to you only to the extent of ensuring that you continue to successfully keep your money with them long enough for them defraud you of the same money, at their own convenient time.

 Disclaimers or public announcement(s) of dissociation from confirmed scams is another method by which some scam websites pretend to be credible. Topfinancial also used this tactic. When Atox Finance Alliance went down, in the days that followed, Atox Finance Alliance website was redirecting to the Home Page of Topfinancial. Topfinancial reacted swiftly by sending out a press release entitled ‘WE ARE NOT IN ANY WAY RELATED TO ATOX FINANCE’. Whereas, as events eventually proved, Topfinancial itself was a Ponzi scheme, as fraudulent as Atox Finance which it earlier issued a disclaimer against. The simple thing is that the fact that Mr B dissociates himself from Mr X  after MR X was found to be a thief, is NOT necessarily a proof of the credibility of MR B. It may be true that Mr B actually has nothing to do with Mr X, but Mr B himself may yet be a different fraudulent entity operating within his own sphere, and so Mr B and Mr X are essentially the same undesirable elements. This is the logic that explains the connection between Topfinancial and Atox Finance.
In the case of the defunct Genius Funds, it made a pretext to humanitarianism and philanthropism, in a way that most of the highly intelligent and wary investors would also have taken the bait. Genius Funds closed down in March 2010. This was about three months after the catastrophic earthquake that took place in Haiti. During this time, on the Home Page news item of Genius Funds appeared an announcement that Genius Funds had donated a woping $50,000 to the victims of the disaster in Haiti. To the best of our knowledge (because we also invested in Genius Funds), there was nothing to prove that Genius Funds made this gesture of philantropy. We stand to be corrected if we are wrong! However, what is absolutely certain is that at that particular time, an average Genius Funds investor believed the report and it made investors believe more in the credibility of Genius Funds. The average investor would certainly have reasoned that if an investment company could afford to send $50,000 to disaster victims, it would also have the strength to continue operating smoothly and paying its own investors as and when due. This was the way Genius Funds needed to make investors to think. So, Genius Funds went scam in March 2010. I have a friend who lost over $20,000 to Genius Funds; to say the least, he was devastated. No one should be surprised that he lost confidence in the HYIP industry from that time. I believe that there are many other people who lost similar or bigger amounts of money.
 Cash Tanker, on its part, came out with a rare, ingenius method of fraud. The said Admin, Sam Serino, who claimed to be a retired investment expert, wore the toga of a pius, saintly Christian who runs an investment platform for the benefit of humanity. His very simple website looked Christian, and its salient feature was the innocent looking picture of Jesus Christ. Sam himself even used to talk in Christian terms in some of his newsletters to investors. It is not then a surprise that he recorded an enormous success not only in attracting attention to his site, but also in convincing vast numbers of investors to put their money into his website. Even though as at the period in question (2009) many people were already getting wary of online investment scams and had become more cautious, the Christian religious appeal of Cash Tanker made it to stand out. It was a very unique method of fraud in the Hyip industry. Almost everybody was convinced that Cash Tanker would be different - because it was owned and ran by a holy man who had the fear of God. Only few bothered to ask the crucial question of whether Sam Serino even existed at all, let alone being a saintly Christian entrepreneur... 

In November 2009, the principal cash-out button on Cash Tanker website stopped working. The implication of this is that investors whose Principals had matured by that time or would mature by December 2009, would not be able to withdraw their principal. Sam Serino sent out a newsletter promising that the button would start working again in January 2010. Meanwhile, investors could still withdraw their daily profits, instantly as usual, but investors' Principals, which was the crux of invested money, was effectively locked in. Those whose principals had matured by November/December 2009 began to look forward to January 2010, for the withdrawal of their principals. And how would they have doubted Sam Serino, when he had clearly stated on his website that his online investment project would last till December 2012? In a nutshell, Sam Serino did not waste time in proving to be the devil that he really was, for it was in the same December 2009 that Cash Tanker website disappeared altogether, never to be seen again. 

  What would appear to be the most heartless and ingenious method out of all the criminal methods mentioned above, is the trend whereby scam websites issue out instructions to members to create API in their Liberty Reserve account. As we reported on Forexcompanyonline (read it here), this was what finally nailed Forexcompanyonline and made experienced industry watchers to conclude that it was a scam, despite the fact that FCO promised to resume normal operations within two months at that time. However, upon seeing the API instruction from FCO at that time, we made a categorical prediction that FCO would never come back again - for the simple reason that from experience we know that nothing exposes the fraudulent intention of an HYIP more than such an API instruction from it. Oilstructure also did the same thing, asking people to create API in their Liberty Reserve accounts. Usually, it is after a website has stopped paying investors that the instruction to create API comes from it. In the case of Forexcompanyonline, the reason why they wanted investors to create API is because it would enable Forexcompanyonline to easily pay investors their outstanding or pending payments. If you have ever seen a typical API instruction from a scam website, you would have seen how the site dictates to you the name and password you should use to create the API, with an instruction that you should notify them and give them your  API username and password when you have created the API in your account .
Why should anyone require you to give him any sensitive details about your account? Why should anyone require the passwords to your account in order to pay you? It’s like someone asking you to give him not only your email address, but also your email password in order for him/her to email you. Rubbish! The simple thing is that if you should ever make the mistake of creating API in line with an instruction from any HYIP site, that will surely turn out to be your biggest mistake because by so doing, you have given fraudsters an easy access to your Liberty Reserve account and they will open your account and withdraw all your cash, finito!

There is so much heartlessness inherent in this API method of scamming people because what it means is that the scammers are not contented with the money they have already stolen from investors when they stopped paying, but they also want to completely  ruin investors and finish them off by also stealing whatever is left in their Liberty Reserve accounts. It takes audacious, unrepentant criminals to perpetrate this type of fraud. 

Very importantly, investors and prospective investors should never allow themselves to be swayed by the presentation of business address and certificates of incorporation by websites. In other words, the fact that an online investment website shows address or displays certificate of incorporation should not be enough reason for you to believe that it is genuine. While some online investment websites present genuine addresses and certificates of incorporation proving that they are genuine businesses, you need to know that there is now a trend whereby scams have also started putting addresses and certificates of incorporation in order to look legitimate.
There are a few truths that investors need to know about this. First, is the fact that most of these addresses are virtual addresses; the nature of online activities is such that the owner of an online enterprise does not need to be physically present at a physical location before operating. We are in the age of smart laptops and other smart mobile devices which make it possible to be on the move and at the same time be running websites. The owner of a scam website can either put a fake address to make his site look legitimate or put a real address, knowing fully well that it is seen worldwide and that most people will not bother to come over long distances to physically check. It also happens that sometimes the addresses are real and the scammers are really present at the location but they are ready to disappear from the location whenever they are ready to close down and run away with your money. Briline Limited presented business address and also a certificate of incorporation but it scammed investors within two months of operation. And be rest assured that you will find absolutely nothing if you now check at their stated address in the U.K.

In the case of presentation of certificates of incorporation, this is another advanced method used by online scams. I can assure you that one of the easiest things for a qualified computer operator to do is to doctor a fake certificate. The various computer applications and softwares for editing pictures and texts are available to criminals and they make ample use of it. Needless to say that most of the certificates of incorporation you see being presented by these scam websites are doctored either physically or through the computer. My findings show that more and more online scams are increasingly using this method to deceive people because they are confident that the majority of prospective investors will not bother to investigate such 'Certificates of Incorporation'. Extra Return, Forexcompanyonline, Briline Limited, etc all presented Certificates of Incorporation but they scammed. You need to know that it's not as if the online scammers do not know that some people are vigilant and experienced enough to know about this trick and avoid being scammed, but they keep using tricks like this because at all times, there are always substantial numbers of people who are ignorant or careless or so greedy to the extent of being ready to take senseless risks. It is these groups of people that online scammers need, in order to remain in their criminal businesses.

Conclusion

The HYIP world is a dangerous world; this is one of the basic facts that those who live in it must never shy away from admitting. In early April 2011, I did a study of about 103 HYIP programs and it was only 14 out of them that I could judge to be genuine. It’s a fact that the vast majority are scams, waiting to strike at the time they deem best. However if you are wise, smart, not greedy and  you are lucky, High Yield Investment Programs is a convenient way of making money. 

Thus this article, while not claiming to have made an exhaustive expose of the smart techniques that online scam sites use to defraud people, is really not meant to scare or discourage you.
It is rather meant to warn you to be careful and also to give you some ideas on how  to be careful.


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