First of all, we must examine the value of a Club Asteria membership. Club Asteria does allow individuals to sign up for a free membership and test drive some of the benefits, along with their own back office. Members are encouraged to sign up for Silver memberships at $9.95 per month and Gold Memberships at $19.95 per month. These levels allow members to access more products and services, and further supplies them with additional “Asterio” credits, of which members can earn a profit from at the end of each week.

Some examples of products offered to Club Asteria members include a traffic optimizer, website creation tools, shopping mall with rebates and rewards, and various e-books. Therefore, upgraded (or “paying”) members are receiving products / services for the membership price, which would appear to satisfy the first and most important step in weighing “legitimate programs” vs. “pyramid schemes.”

However, one caveat that should not be overlooked is the true VALUE of the products and services themselves; i.e. do Club Asteria members feel that these products and services are worth the price tag attached for “upgraded” perks, even if the referral incentive did not exist? The United States FTC often uses this as a basic litmus test, whereas the concept of a “fair price” is rarely the biggest concern.  Consumers typically determine the true value of such memberships / fees, and therefore, a general consensus of what is “fair” can be somewhat difficult to determine.

Here are two questions that should be asked by prospects and current Club Asteria members:
- Would anyone pay for these products / services if the business opportunity and rewards were not attached?
- Are current members using and accomplishing anything with the products / services they are paying for?

The next crucial examination revolves around the payplan. Club Asteria claims they distribute 75% of their revenues toward commissions and rewards for their business affiliates. The basic explanation on the “Commission” segment of the Club Asteria website implies that 45% of revenues are paid as direct commissions, and another 30% is divided between Gold Members and Silver Members, with a total weekly commision cap of 10%. The amount distributed to each member’s account depends on their accumulation of Asterios.

What exactly is an “Asterio“? Think of it as credit system designed to keep track of individual member’s participation and level in the Club Asteria program.  Weekly distributions are then made to Club Asteria members in proportion to their Asterio count.  Asterios can be earned as members purchase additional programs and services offered through their affiliates. At first glance, Club Asteria’s explanation appears to account for a sustainable reward system, which shares similarities with MLM models incorporating profit sharing pools and team bonuses.

However, the “Asterio” concept requires a very important warning. The rewards dispersed to Asterio holders must be less or equivalent to all revenues obtained by member purchases in Club Asteria; otherwise, the model would have ponzi scheme characteristics similar to Sophisticated Ponzi schemes, such as the common “Autosurf” concept (though, in this case, not requiring any surfing or web viewing). This does not appear to be the case with Club Asteria; unfortunately, outsiders do not have access to full data regarding the specific allocation of revenues.   Therefore, members should simply exercise basic caution and keep an open eye out for any abnormally high rewards that are attained in excess of product / service revenue.

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FINAL OPINION:

Given the current information about Club Asteria at this time, I will neither be recommending it or discouraging people from participating in it.  I do not see any major red flags that would immediately condemn it as a dangerous scam. The full Club Asteria membership cost is relatively cheap, but the price vs value of the products / services members are urged to purchase remains in question.

Hopefully, we’ll hear some opinions from current Club Asteria members and other industry analysts. As more information is presented in the future, PSA hopes to provide additional updates and articles.
Attributes to “Regarding Club Asteria Scam” – Ponzi Scheme Alert, All Rights Reserved. 2010.
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- Mr. Ryz

www.PonziSchemeAlert.com

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As the month of May approaches, many young adults will be sending in applications for various summer job opportunities and internships. Thanks to handy modern technology in the Information Age, most individuals are able to take advantage of job listing sites and applications, including “free listings” (such as Monster.com) and career services through universities and current employers.

However, what many applicants that are eager to begin working don’t fully realize is that shady opportunities and crooked operations often use these job listing sources as a way to quickly recruit the naive and unsuspecting. If job seekers aren’t careful, they may eventually find themselves caught up in a variation of a ponzi scheme, illegal pyramid scheme, or similar scam.

Here are a combination of some classic and new age warning signs to look out for as you pursue opportunities in your area:

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- Paying a Fee to Work or be Considered for the Job -
Most legitimate job opportunities will never require you to pay some kind of “membership fee” or “participation fee” upon acceptance. If the position does involve taking specific training or a class with a fee attached, the company will normally provide detailed information about the necessity of this extra education. Often times the new employee is also reimbursed partially or fully for this expense. If, however, you find yourself pressured into paying a suspiciously high ticket price for the opportunity to “work,” you’d be wise to leave. At the very least, you should explain to the company representative that you were not expecting to encounter “fees” and will require the opportunity to conduct additional research before progressing further. Many pyramid schemes and deceptive “commission” based programs often charge fees upfront.

- Chain letters or “Gifting” Scenarios -
If you come across any opportunities advertising the ability to “stay at home and send out letters,” or receive a list of names (“leads”) and are instructed to solicit and convince them to send money via mail or payment processors (such as “paypal“) to yet another list of names, you have most likely stumbled upon a chain letter or “gifting” scheme. These programs are very similar to traditional pyramid schemes and typically only benefit the first people to send out the original letters.

- Extreme or Desperate Eagerness to Hire You -
If the company or program seems especially eager to start plugging you in without fully examining your specific qualifications and questioning your ability to contribute as an employee, your “employer to be” is probably either hiding something from you or has you convinced that you’re applying for something better than it truly is. The American job market is extremely competitive, so if you find yourself being accepted with open arms even before the interview process, be wary and ask plenty of questions.

- Suscipious Interviews -
You may encounter a very unusual interview process in which your “interview” is nothing more than a pep-talk or walkthrough of basic information dealing with the opportunity. In some cases, you may be accompanied by several other applicants during this odd “interview” process. This can indicate that the job does not necessarily require any special knowledge or training and will therefore most likely result in strict “commission” based sales, low average pay, and/or very little opportunity for promotion and raises. Most competitive jobs will extend you the courtesy of a direct, professional interview.

- MLM / Recruiting Deception -
Distributors and representatives for MLM (Multi-Level Marketing) companies are becoming more familiar with job listing sites and often use them to scout out new recruits. Although MLM companies with unique products and services are legal by FTC definition, they are very different from traditional, secure jobs with steady paychecks. Many representatives with such companies are honest about these differences; however, some shady training organizations for MLMs train their distributors to deceive job seekers into thinking they are applying for a job as opposed to learning how to become an independent distributor. As an MLM distributor, you are strictly paid commission based on your ability to sell products and services and based on your sucess ratio of recruiting other people to go out and do the same. If that’s not your “cup of tea,” watch out for sleazy MLM reps and beware of descriptions that resemble the following: “Work from home” , “Choose your own hours” , “Own your own business.” Also beware of any “opportunity” of any kind that only emphasizes rewards for “recruiting” and “sponsoring;” that is the mark of an illegal pyramid scheme or unethical MLM system.

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One final tip for the road:

Before you even begin the interviewing process for any exciting job opportunity, make sure you research and complete due diligence on the employer. Being informed and prepared is always a great idea before proceeding with any interview; however, you can also often differentiate scams from legitimate jobs ahead of time (i.e. pre-interview) with a little “homework” and save yourself a great deal of time and effort. Best of luck!

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- Mr. Ryz

www.PonziSchemeAlert.com

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Apparently, Bernard H. Butts Jr. came into contact with Jason Meyer via phone, e-mail, and internet messaging services. Jason Meyer solicited Butts with an investment deal offering an outrageously high yield of 25% ROI per month for 9 consecutive months. Meyer claimed that he could provide these returns on a monthly basis with essentially “no risk” by investing Butts’ principal into contracts with gold mines which guaranteed him at least 40% ROI per month.

Butts was originally entitled to receive these 9 monthly payments of 25% ROI, along with his principal back during the first month and a single payment of $1.5 million at the end of the final month. However, Meyer’s kept the first $1.5 million owed to Butts and re-negotiated a new investment deal that promised Butts the sum of approximately $19,750,000. The original investment was wired to Jason Meyer and Butts has failed to receive any of the monthly payments due to him as stated in the agreement.

As each new month approached in late 2009, Jason Meyer refused to make his payments to Butts as promised. When questioned about the breach of contract, Meyer continued to use stall tactics. His stalling efforts revolved around one major excuse, in which he claimed he used all his current cash assets to pay another investor who had invested $200 million and was promised 7% ROI per month. Meyer claimed he would be forced to defer payments to December 2009 or January 2010, but his promises were never delivered. January and February passed and Bernard H. Butts received nothing.

Beware of Jason Meyer’s ongoing deception!

Many other victims of Jason Meyer have also given their testimonies and caution people to stay on their guard. Meyer’s may attempt to “do business” with other unsuspecting individuals, and he is most likely only attempting to (1. steal additional funds, and/or (2. fuel his ponzi scheme on the verge of collapse.

A victim in Detroit, Michigan specifically warns about Jason Meyers’ partner in crime, a “Dr. Meguid.” Further research on his part indicated that Dr. Meguid may not even be a real “doctor” and has a history for interactions with scam-related activities. This victim also explains that Meyers has most likely preyed on many wealthy individuals who are not entirely familiar with trading in financial markets and institutions.

Other individuals in Orlando, Florida claim that Jason Meyers defrauded them by promising them high returns through investments in AAA grade bonds. However, as time elapsed, these investors only encountered excuses, similar to those described by Bernard H. Butts testimony. One of the Orlando victims specifically warns that Meyers goes through great lengths to assure his clients that he is a reliable and honest businessman. On some occasions, Meyers even brought his family along with him when discussing the investment deal to give people the impression that he is an innocent “family man.”

Jason Meyers has also been known to offer his prospects forms of collateral in what appears to be the form of AAA bonds. However, former victims of Meyers that inspected the collateral discovered it to be fake. Meyers apparently uses a variety of company names when discussing his investment ventures and will often instruct interested prospects to use a Wells Fargo bank account for all deposits (specifically wires).

Meyers appears to favor scanning the states of Florida and Arizona for new victims, but be aware that he could attempt to strike anywhere in the United States – potentially even anywhere in the world. If you encounter an investment proposition from Meyers or any other individual promising similar ridiculous returns (i.e. turning $2 million into nearly $20 million in just 1 year) without any professional displays of proof, do not even entertain the possibility of taking up such a shady “opportunity.” Run and don’t look back.

Links & Resources for the Jason Meyers Scam:

www.ponzischemealert.com/documents/ButtsMertz1.pdf

www.ponzischemealert.com/documents/ButtsMertz2.pdf

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- Mr. Ryz

www.PonziSchemeAlert.com

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In the previous article weighing the likelihood of Guardian Equity being a scam, we discussed some of the major red flags:

#1. GEG offered its investors between 5.1% to 5.9% per week for nearly 50 weeks straight.  Some risky investments can occasionally return 20% to their investors, but such outrageous monthly performance without variance is absurd and essentially impossible in any financial market – and by “essentially impossible,” I mean a confidence level of 0.00000000001% – i.e. basically zero.

#2. Not one single form of proof has ever been displayed or referred to GEG researchers, and the only ridiculous response that followed the questioning of this absence of proof was along the lines of: “Oh…. well if you want to fly out to meet the people running the company, I know a guy who knows a guy whose best friend’s father has seen some proof regarding GEG. You could do the same.“  As if I should be required to fly out a couple thousand miles just to receive proof of legal and ethical investments, as any professional or respectable company would provide to its members via simple and convenient 24/7-available electronic resources?

#3. Discussion on GEG topics outside the officially approved “Guardian Equity forum” was forbidden. Many Guardian Equity members discussing the program outside their forum were threatened by other paranoid and/or self-righteous members and told they would be reported to GEG administration and have their accounts “banned.”  Guardian Equity refused to offer even the bare minimum proof of legitimate assets to their members, and yet these members couldn’t so much as let one peep of “GEG” outside the GEG forums without risking the safety of their account?

— — —

As of January 28, many Guardian Equity members are now familiar with the e-mail and follow-up sent by Mr. David Cullen and Robert of GEG, respectively.  David Cullen’s side of the story indicates that Robert was not only unqualified to handle thousands of trusting individuals’ investments, but also that he does not necessarily plan on fulfilling promised payouts to GEG members.  Note that if Mr. Cullen’s testimony is true – i.e. Robert’s operation of the company was completely dysfunctional and unprofessional, no records of trades or balance sheets existed, and the program’s investments (what’s left of them anyway) are “missing” – then Robert was most likely running nothing more than a crafty ponzi scheme model the entire time.

Considering the “creativity” that’s been witnessed throughout the history of major, long-term ponzi schemes in the HYIP industry, there is some legitimate debate about the possibility of this “Robert vs Mr. Cullen” fiasco being nothing more than a clever drama designed to buy the scam artists behind GEG some more time before they run off with the remnants of GEG members’ money.  However, whether David Cullen is telling the truth or not, it appears Guardian Equity and the UPBAN (United Pacific Bancorp Limited) project is drawing its last breaths.

Activities on the official Guardian Equity forum were recently brought to a halt, leaving many GEG members complaining about being unable to access any information for days.  Several testimonies by angry members have now been brought into light, many of which sound similar to the following:  “I have been patiently waiting for Guardian Equity to complete my withdrawal request for months! They reassured us on the forums that cashouts would soon resume, but now the forum is closed!!”

I don’t think Guardian Equity’s recent actions of closing its forum after releasing troublesome news to its “investors” is a coincidence of any sort.  I think the dark secrets behind the true operations of Guardian Equity are about to come into the light; the ponzi scheme pool has dried up, and efforts are already being made to silence the uproar that will soon develop.  Unfortunately, I fear the GEG operators are currently sitting on their island in the Carribean, smuggly counting the remains of loyal GEG investors’ money, and attempting to plan their next steps to “close shop” for good.

Many Guardian Equity “investors” currently believe their funds are safely tucked away in CDs (certificates of deposit) issued by GEG / UPBAN.  CDs are generally issued by banks to balance their assets, the most common of which are mortgage-backed securities for commerical and residential real estate.  However, I fear this was just another gimmick devised by GEG owners based on these simple reasons:

#1. United Pacific Bancorp is NOT a legally registered bank
#2. GEG / UPBAN does NOT even possess basic financial statements that prove the “CDs” it is offering are properly backed by real assets, as required by real organizations.

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I have already explained this line of reasoning to many current GEG members, and most of them only ask me the following question:  “Should I withdraw my money?”

Hopefully, those who recognize these intense red flags will still have the opportunity to reclaim at least a percentage of their investments; however, at this stage, don’t be surprised to hear many angry GEG members telling stories about delayed payments and little to no communication on GEG’s part.  If you are presented with an opportunity to withdraw some of your funds from GEG – even if you face a penalty – I recommend you do so immediately.

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- Mr. Ryz

www.MrRyzFinancial.com

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Note: Comments will be enabled for those who wish to express their concerns or problems with Guardian Equity / UPBAN.  This is NOT the place, however, to rattle off cheerleader praise or “I was paid” rants.  These and all other off-topic comments will be deleted immediately.

If you trace back the history of the Ponzi Scheme Alert project, you’ll find it was started several months prior to the Network’s existence.  During February of 2009, I was encouraging Pathway 2 prosperity victims to take action against Nick Smirnow.  In fact, if you really dive into the available research, you’ll find that on multiple occasions people asked me for information pertaining to Oceanside Network in different article sections on this blog, to which I specifically asked them to keep the subject “on topic” and forward all Oceanside Network related discussion to me privately via e-mail.

So, why do I have bio links and a small spotlight on the top, right side of this blog relating to Oceanside Network information? Originally, none of this even existed, but during the last few months of 2009, I received quite a few angry comments and e-mails from HYIP cheerleaders that essentially said: “If you’re going to call this program a scam, why can’t you give any recommendations for something comparable? We want solutions (of course, most of those comments were NOT this polite or respectful).” Despite the fact that warning the public about likely ponzi schemes, MLM scams, etc. doesn’t obligate me to find them a supplement, these repetitive comments did convince me that providing a couple links to a relatively “high return” opportunity that I believe to be ethical would be fair and also most likely beneficial to my readers.

Now I see that some HYIP players – who are frustrated and angry because I have warned people about the ponzi scheme red flags associated with HYIP programs that they have become emotionally attached to – and a few individuals involved in the dark “HYIP Industry” politics – many of which have a personal beef against Broker Jones and other Oceanside Network staff – are trying to use my simple effort of providing a potential passive income supplement to discredit my materials through false rumors and accusations. So, I find myself in a “darned if I do, and darned if I don’t” scenario concerning bitter cheerleaders. One day, I’m accused of “not doing enough” when calling out scams without providing “alternatives.” The next day I’m accused of using the Ponzi Scheme Alert platform to satisfy my own personal “marketing agenda.”

I will no longer attempt to improve the odds in what has become a “lose / lose” situation. Quite frankly, I have no intentions of altering the current presentation and layout of this blog. For the past few months, this blog has contained a few links within my WP signature and a clickable side-box taking others to my website that provides additional information about the Oceanside Network. Readers and participants have not and never will be pressured into joining that company. It is, quite simply, an “alternative opportunity” that I believe to be legitimate and ethical; only recommended to people who are looking for supplements to the unstable and illegal HYIP Industry.  Although I would certainly like to see people join the Network, I never urge anyone to do so.

Regarding the crazy rumors that are currently being spread, let me put it to you “real fast and straight” – The Ponzi Scheme Alert website and blog has never been owned, shared, or operated by the Oceanside Network, Broker Jones, JD Kaiser, or any other related individuals or organizations.

Another, slightly more ambiguous rumor I’ve discovered states that “I will call ‘ANYTHING’ and/or ‘EVERYTHING’ a scam except for the Oceanside Network;” and I’m inclined to believe this one is derived from cheerleader desperation I’m accustomed to seeing whenever I “rattle the cages” of an extremely emotional group. Once again, let’s go through the simple history of Ponzi Scheme Alert to see why this ridiculous accusation is purely false:

- I wrote about a blatant HYIP ponzi scheme, Sam Serino’s Cash Tanker, mainly to vent about my disgust for a fraudster that would pervert religion and symbols of Christianity to market his scam. I was half-way shocked when I discovered just how many people had infused blind faith into Serino’s absurd promises and wouldn’t allow themselves to see the obvious red flags indicating a ponzi scheme.

- I discussed some of the red flags associated with Guardian Equity Group at the request of some personal contacts involved with GEG’s investment program. Interestingly enough, a few GEG members came forth admitting that they and many other investors they knew were also critically examining the “model” and “changes” associated with the group. Most of them agreed with my red flag analysis to some extent.

- I reviewed TVI Express and the nature of “cycler programs,” explaining why such models weren’t built to last. In straightforward terms, the very proof that cycler programs are temporary, “get in while their hot” programs lies in the fact that no cycler program has ever survived even the basic, 3-5 year test of time. The fact that they contain illegal pyramid scheme aspects is verifiable by FTC definitions.

- I warned people about an outrageously blatant series of ponzi schemes that were promising their “investors” over 1000% ROI in one day!

- I examined a rather popular HYIP, Genius Funds, and disproved many of its members’ arguments that it was “safe” or didn’t show “red flags.”

Apparently some individuals would like you to believe that 5 warnings against programs showing dangers, “red flags,” etc is “Everything.“  How ridiculous.

Before I go on, take note that I am not summarizing these warnings in some arrogant attempt to portray myself as someone who is “always right.” I’m not a fortune teller, and I certainly admit that what I predict or suggest may not always be right. I’m simply an individual that has seen the treacherous angles of the “HYIP Industry” and has learned to separate due diligence and proper criticism from “negativity.” I examine the warning signs that often repeat themselves within the HYIP industry, and attempt to shine a little logic on to communities that “fall in love” with specific ponzi schemes and are blinded to the dangers around them.

Put as simply as I can – When I see a scam, I call it a “scam.” When I see red flags, I alert people to “red flags” and encourage them to examine the situation in a professional, mature manner. This is exactly what I have done with the programs / organizations I previously listed. Apparently, some misleading cheerleaders and desperate instigators have distorted those warnings as if I’m calling “EVERYTHING” a scam except “Oceanside Network,” when in fact, I’m merely “calling them as I see them.”

At the same time, I see nothing wrong with recommending a program I believe in to those who are searching for something legitimate.  As for those who claim that the very presence of a “link” on my site to the Oceanside Network indicates that I will call any program I come across a scam – whether I believe it is or not – they are probably not reading the reasons and logic I give behind my posts.   They are most likely just claiming such things because the truth about the red flags surrounding their program is too hard for them to accept.  People such as this are more interested in finding any way they can to justify the situation, even if it involves making me look like the “bad guy,” instead of coming to terms with reality.

I did not originally set up the Ponzi Scheme Alert blog expecting 100% support from every reader and participant. I’ve witnessed some outrageously greedy and delusional people in the HYIP Industry, and it’s only natural to expect some retaliation. I’ve also been on the opposite end of the table with a former ponzi scheme known as 12 Daily Pro, and I remember how easy the “thrill of being paid” and “making money” can persuade a reasonable person to adopt the attitude of a mindless, greedy cheerleader. Some people refuse the invitation to apply common sense and instead choose to recklessly mock anyone that doesn’t support the programs they have interests in. Unfortunately, some individuals’ immaturity needs to be ignored and they must learn the “hard way.”

A recent poster on this blog attempted to patronize me by suggesting that my warnings against ponzi schemes and specific red flags only help support the programs I am warning against. This is a common HYIP cheerleader taunt, but I tell you that nothing could be further from the truth. I have received several e-mails from random people all over the globe thanking me for my honesty and attempts to warn people to think critically and avoid suspicious programs. Certain individuals have even specifically told me how much money they saved after reading my articles, deciding not to “invest,” and watching the program crumble away to ponzi scheme fate. Their testimonies alone are enough to convince me that posting these warnings is making a difference.

In conclusion, you may choose to believe what you wish about me and Ponzi Scheme Alert. In fact, I imagine the zealous gossip train out there will read this article and start some new pitiful rumor, something along the lines of- “The only reason he posted all that is to try to get you into the Oceanside Network after all!” – which would not be surprising. Desperate cheerleaders looking for any way to combat those who explain the truth about HYIP scams will continue to do what they do best – twist the truth.

However, even if you’re involved in the “HYIP Industry” to some extent and you decide not to trust a word I ever post, I still encourage you to do the following: Be open-minded, use common sense, complete real due diligence, and think like a professional investor - not like a gambler. If you do these things, you will avoid the sting of reality that comes with ponzi scheme deception.

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- Mr. Ryz

www.MrRyzFinancial.com

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Commentary has been disabled for this article. Discussions about this topic elsewhere on this blog will be deleted.

The Forex Fraud organization has recently provided Ponzi Scheme Alert with a special warning against forex scams prevalent in the British Virgin Islands region.

Although forex scammers are can be located nearly anywhere on the international map, this specific area contains some shady secrets that should be recognized by all individuals completing due diligence on suspicious companies or “investment opportunities” claiming to generate returns through the forex market:

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The British Virgin Islands is a small nation located to the east of Puerto Rico in the Caribbean Region. It is comprised of various tiny land masses scattered in a wide region, but most human activity takes places in the island of Tortola with an area of about 100 sq. km. It is a popular destination for the rich and affluent citizens of the world, and derives about half of its revenues from tourism.

But there is also a rather dark side to this idyllic place. The British Virgin Islands is something of a diploma mill for some of the more questionable and unreliable businesses in the world of finance including the forex business. The island makes a size able portion of its revenues form the registration of companies, where few questions are asked, and does not tax corporations for their activities. This lax attitude of the BVI towards upstart firms and financial corporations has made it a premiere location for both fraudsters and financially sophisticated economic players, both individual and corporate, who, for many different reasons, would prefer to stay away from the scrutiny of authorities and officials in the developed world.

Forex scammers and fraudsters would obviously want to stay as far away as possible from the major financial centers of the world in Europe or the U.S. where regulation and oversight is supposed to be much tighter than in locations at the periphery of the advanced world. There are number of forex fraudsters located in far away places, but among those the BVI stands out with its laxity in granting registration, its completely non-existent oversight of company activities, weak legal enforcement of any regulations that may exist, and overly corporate-friendly attitude.

Does it all mean that any firm registered in the British Virgin Islands is a forex scam? That would be an overstatement, because companies that are otherwise legitimate may choose to be headquartered at such a place for the favorable tax rules and ease of the registration process. Nonetheless, if you’re a beginner, or simply know too little about forex brokers, and industry in general, it is a good idea to avoid brokers located in this region, at least until you gain a better understanding of the broker’s business.

Unfortunately, there is no completely safe way of avoiding fraud in forex. If a manager decides to defraud customers, he can do so more or less undetected, as shown by the numerous high profile cases of fraud that have occurred in the past years. The lessons of the Bernard Madoff case are no less valid for fore traders than they are for commodity or stocks traders. Make sure that you know your partner well, keep emotions out of your relationship with your manager or broker, and always depend on logic while considering any aspect of your relationship. These, and similar precautions may well serve to help you avoid the more unpleasant sides of the forex business.

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- Forex Fraud

Since the Christmas season (2009), I’ve been asked by at least a dozen people to analyze the internet program Genius Funds and dub it “scam” or potential legitimate online investment program. After the crash of one of 2009’s most painful ponzi schemes, Sam Serino’s Cash Tanker, I noticed that many individuals heavily engaged in the HYIP industry claimed they were “diversified *(See Note A)” in Genius Funds, Gold Nugget Invest (GNI), and Cash Tanker.

Before the demise of Mr. Serino’s blatant scam, I wasn’t aware that Genius Funds’ popularity had grown to such lengths. Now it seems many individuals either (1.) invested in Genius Funds before Cash Tanker met its bitter end and convinced themselves that they were “safe,” and/or (2.) immediately turned to Genius Funds in an attempt to supplement or regain the opportunity to earn absurd rates of return on their money.

At the risk of becoming extremely unpopular with the emotionally hooked Genius Fund supporting crowd (which, I must admit, doesn’t bother me at all), I believe it’s safe to predict that most people within the program will soon discover they are at the mercy of another scam; or “ponzi scheme,” to be specific. As with most long-term ponzi schemes, it seems many people quickly deposited funds – shifting their entire “internet investment” focus, in some cases – to Genius Funds without completing even the basic forms of due diligence.

As with most HYIP ponzi schemes, the vast majority of Genius Fund members joined the group simply because of the hype; a.k.a. all the online testimonies and referrals repeating “I got paid, I made money!” Unfortunately, since all long-term internet scams pay for some period of time, the cheers of previous members receiving forms of payment contributes very little – if anything – to a researcher’s ability to develop a sensible conclusion about the true structure of an “investment program.”

So, whether you are participating in Genius Funds or not, let’s take a look at the some of Genius Fund’s largest red flags. Then you can make your own conclusion, as I have already made mine:

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1. The constant, high rates of returns offered by Genius Funds are NOT realistic

Genius Fund offers 2 different “plans” with 3 “classes” of shares, in which each share pays a slightly higher ROI. Shares are manually upgraded to a higher “class” once an investor increases the size of a portfolio; e.g. a participant in Genius Fund can receive “Preferred Shares,” paying a higher daily / weekly rate than “Common Shares,” but only once the participant has at least $500 in his account. The main website advertises 1.1 – 1.5% daily ROI rates for the first plan, and 5.0 – 6.4% weekly ROI rates for the second plan.

Therefore, the first red flag (similar to most of these internet “investment” programs) is that NO legitimate company or trader can guarantee 20% ROI per month EVERY single month (without significant variance) by trading or investing in bonds, stocks (domestic or foreign equities), commodities, real estate, etc. Put very simple, such a claim is false because it is virtually impossible within the reality of the world of finance. Genius Funds and its supporters can claim otherwise as loud and as long as they wish; however, I guarantee you’ll never see any proof – i.e. audited financial statements verifying the validity of their suggested “investment model” – that Genius Funds is capable of ethically paying these high returns each month without fail. Only a ponzi scheme element can satisfy such a ridiculous operation.

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2. Genius Fund’s supposed timeline does not appear to be supported by surrounding facts

Genius Funds itself claims it has operated from 2006 to 2010, which is a 4-5 year span. I see many Genius Fund supporters and “investors” also claiming that the programs long existence of nearly 5 years strongly enhances its credibility. The problem within such claims is that basic research on Genius Fund’s timeline suggests that the program has not even existed for a full two years. If you visit popular HYIP/Autosurf forums, such as Money Maker Group or TalkGold, you’ll discover that Genius Funds participants didn’t even post about the program until late August of 2008. In fact, if you run a basic website analysis, you’ll also see that Genius Funds didn’t even register on the radar until mid-2008. Therefore, this “4-5 year” hype appears to be entirely false.

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3. Genius Funds’ growth rate could have sustained a ponzi scheme structure

Several Genius Funds supporters will argue that Genius Funds cannot be a scam because it has successfully paid out for “so many months.” In other words, they believe the program did not grow and attract new investors / new deposits at an exponential rate, as required for a ponzi scheme to continue its reign of survival. However, if you examine a simple traffic analysis of Genius Funds, you’ll notice that the program’s growth curve is nearly identical to that of an exponential progression. You can see this for yourself with a basic Alexa graph displaying the websites daily reach over the past year and a half (as related to “Red Flag #2,” also notice that the program is nonexistent until the third quarter of 2008):

Under these levels of growth, Genius Fund would have been able to continue its ponzi scheme activities, provided that high volumes of participants did not withdraw excessive amounts of funds. As the exponential growth line reaches the “vertical stages,” the probability of Genius Funds surviving the “next month” decreases by a substantial amount. The intense constraint of the exponential growth factor could bring Genius Funds to ruin very quickly at this point. Most ponzi schemes cannot survive very long once their growth curve reaches the steepness displayed in the above graph.

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Genius Funds, in conclusion – without beating around the bush:
Scam city!

Genius Funds is littered with red flags; most of which resemble the characteristics of other long-term HYIP ponzi schemes that lasted several months – some of them even years.

So, what should YOU do if you were considering Genius Funds as a possible “investment”? Unless Genius Funds is willing to supply the hardcore proof that they can sufficiently provide the ridiculous returns they advertise with an ethical trading or investing model (which they can’t), I wouldn’t even waste the minimum “investment” of $10 in this shady endeavor.  In other words, RUN!

What should you do if you’re currently a member of Genius Funds and have money “invested” with them? As you may have probably guessed, I recommend you withdraw your profits immediately and attempt to salvage what you can. As demonstrated earlier, this program most likely uses a straight-forward ponzi scheme model that is on the verge of crumbling to dust. It could – in all mathematical possibilities – survive for more months, but the probability of extended endurance severely diminishes with each passing day. Be extremely cautious!

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- Mr. Ryz

www.MrRyzFinancial.com

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* Note A -

As a quick note to all sophisticated investors: Concerning the greed and deception that spurs the so-called “HYIP Industry” on within it’s own illegal framework, I admit that using an investment term such as “diversification” typically associated with reducing an investors’ standard deviation of overall portfolio risk would be somewhat misleading at best, and potentially even downright ludicrous. Individuals that attempt to profit by reaching “first in, first out” payments in internet ponzi schemes are gamblers; NOT investors. Even if “diversification” into such ridiculous gambling affairs did improve those odds, the term is not applicable in its intended form.

If internet HYIPs (high yield investment programs) have become a curious topic to you within the last few months, you may be reading signs of caution on forums and blogs related to the Christmas season and wondering what all the “paranoia” is about.

I still remember the first time I was warned back in 2005: “Don’t even think of messing around with those HYIP scams during Christmas time. You might as well assume you are giving the ponzi scammer a Christmas gift, because your chances of seeing your investment back are close to nil!”

That warning might have been slightly exaggerated; however, there is an important pattern concerning HYIPs and Christmas that you should be aware of if you are not already. In fact, the truth is that you should be very careful what you invest in (or, in general, what you purchase) through the internet as soon you start hearing Christmas songs on popular radio stations.

This is because out of the entire year, December tends to be the month with the greatest number of scams falling apart. Consequently, the chain effect involves a lot of angry HYIP participants that are left several dollars poorer only days before the holiday season.

Why are HYIP scams and Christmas strongly correlated?

There are TWO main reasons:

#1. Many HYIP serial scammers start programs – sometimes several at one time – designed to quickly pull in as much cash as possible before the month of December ends. These administrators or operators start basic ponzi schemes in hopes of generating some quick cash for themselves right before the end of the holidays, and some of these fraudsters even manage to steal 5-figures worth of HYIP participants’ funds in a matter of days.  Once Christmas is almost here – POOF!  They disappear with all the money.

Keep in mind – this does not necessarily mean that these short-lived HYIP ponzi schemes are easy to immediately identify through absurd rates of return (such as 100% ROI in a couple days) or through poor website display. Many highly appealing HYIPs with a somewhat professional outlook have also been started by scammers in a hasty attempt to sucker in a few large investors and then run with the deposits.

#2. Most participants also initially join HYIP programs in hopes of making some fast, easy cash right before the holidays. Around Christmas time, many participants start withdrawing large amounts of “profits,” as opposed to letting their accounts continue to compound. As a result of heavy withdrawals, even the most sophisticated ponzi schemes begin to suffer a great amount of pressure. The basic “rob Peter to pay Paul” model within a ponzi scheme is very fragile; therefore, sudden waves of large withdrawals can quickly suck a large ponzi pool dry in matter of days.

Don’t be surprised to see discussion board topics related to “popular HYIPs” quickly turn into a bitter and/or depressed environment after Christmas, even if the HYIP participants have been posting “I got paid” or “I love this program” for months at a time previously.  Even long-term ponzi schemes often have a difficult time surviving the holiday rush.  Since ponzi schemes are nothing more than mathematical games that will produce far more winners than losers in the end, you are likely to encounter some horror stories before New Years.

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Just to be clear:

HYIP programs or “investments” are ALWAYS extremely risky, no matter what time of year the calendar currently shows. Also, remember that regardless of the length or outward appearance of the program, all HYIPs with ponzi scheme models can only afford to payout a few “lucky investors” by stealing it from the vast majority of previous participants. “Profits” are nothing more than gains through money laundering activities. Therefore, any participation in such programs is highly discouraged.

In fact, I advise you to apply very strict standards when conducting due diligence on an opportunity to “invest” in a company that solely operates through a website and accepts funds through payment processors. Here’s one golden rule to use: Avoid any company or “program” that is NOT willing to prove the legitimacy or sustainability of its investment model.

Happy Holidays, everyone…. Now keep them “happy” by using sound judgment and avoiding these Christmas scams.

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- Mr. Ryz

www.PonziSchemeAlert.com

There’s currently a lot of buzz on the internet about a “travel company” called TVI Express – “Travel Ventures International.” Most of my personal contacts in the MLM industry are very familiar with the TVI Express fad, and quite a few random individuals have sent me e-mails asking for my honest opinion regarding TVI Express’ business opportunity component.

Well… You asked for honesty, and you’re going to get it…

TVI (Travel Ventures International) Express membership involves a one time payment of $250. The company uses a “cycler” payment method through 2 matrices to reward its members, and each membership position requires personal recruits before the position is eligible to cycle out at the top levels. Once you cycle through the first 2×4 matrix, you earn $250 + a travel voucher “valued at another $250″ and you then progress to next 2×4 matrix known as the “Express Board.” If you cycle through this board, you will receive $10,000 in cash and yet another travel voucher, which is supposedly worth $5,000, for a total of $15,000 worth of rewards.

Sounds good when you put it that way, doesn’t it? “Just join TVI Express, refer a couple people, and in 30-60 days you can find yourself $15,500 richer!” Unfortunately, the cycler payout system through matrix positions is NOT as glorious or lucrative as many of the advertisements or presentations would like you to believe. In fact, going a little farther, TVI Express is ringing scam bells that many of its own members have yet to notice.

Here are two of the main problems with the “cycler” model utilized by TVI Express:

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1. Very little emphasis is placed on the product / service itself.

Most people are joining this program because of all the hype attached to the cycler payouts themselves. Some of them have absolutely no idea how the payment system operates; they just joined because people claimed they were “getting paid.” If you investigate any number of TVI Express promotional websites, forum communities, blogs, etc. you’ll notice that vast majority of them strictly embellish the opportunity to receive a sizable chunk of money, while hardly focusing on the benefits of the travel club membership.

Furthermore, I have yet to read one excited testimony about the fair value benefits of the travel vouchers offered for the $250 membership price OR through the matrix bonuses. The only issue that most (if not all) TVI Express members seem to be concerned about is the “fast cash.”

What’s the underlying problem here? Useful, competitive products / services are required for a MLM (Multi-Level Marketing) opportunity to be considered legal and ethical in most (if not all) countries. If the FTC decides to dig in to TVI Express while it grows in popularity, I believe they will find that most members strictly joined for the “money making opportunity” and pushed the travel services aside. In a situation such as this, the FTC would most likely rule TVI Express an illegal pyramid scheme because the products / services were neglected. Let us not forget the fate of YTB (Your Travel Biz), the former “travel business” that was shut down a year ago by the FTC and declared an illegal pyramid scheme because the vast majority of its members were not even using the discount travel services offered through the company.

MLM gurus will probably also notice that commissionable rewards from the TVI Express cycler are strictly paid out through new enrollments; NOT as a direct result of sales from the travel services. This aspect will most likely result in a “double-whammy” against the company, since the FTC highly frowns upon MLM businesses that don’t use sales volume from the products / services as a basis for commission payments.

At this point, some people reading this article so far may be thinking- “Why should I care about what the FTC thinks? TVI Express isn’t even located in the United States.” This may be true (which brings up another point about how suspicious TVI Express’ awkward locations and registration materials are for a “UK-based” company, though I’m not going to get into that so much since the technical business model is the subject of scrutiny here); however, if TVI Express continues grow with the same levels of momentum, you can bet that that the FTC will take notice and conduct an investigation.

If the FTC feels that TVI Express is operating within an unethical or illegal business model, they can order the company to cease it’s operations on all U.S. based soil and then declare all current U.S. citizen’s profits in TVI Express as “illegal gains.” From there, the FTC would most likely seize the illegal gains from TVI Express builders and participants that earned the most. Although this process may seem somewhat ruthless and hard to believe, the FTC has done it several times before and you can be sure they wouldn’t hestitate to go through the same motions once again if TVI Express grows out of control.

I can’t necessarily predict whether or not the FTC will intervene or not at this point.  Quite frankly, though these actions are possible, I have doubts it will come to this.   The FTC may not even have the chance to act, which brings me to the problem with cycler models…

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2. Cyclers are NOT built to last for the long run!

Even assuming that the U.S. or other governments don’t interfere with TVI Express as it stands now, eventually the program will collapse due to the inevitable consequences of market saturation. All cycler programs with matrix progression go through a period of tremendous excitement and exponential growth; however, this period is quickly followed up with a short dive off a steep cliff. Since cyclers involve a one-time payment for infinite months of membership, eventually the market runs dry of people with interest and capital to continue to feed the program and push current members through the matrix.

2 years ago, I actually joined similar cycler programs known as Diamond Cash Club and the Getaway Club in 2007, both of which proved to be cycler scams. I didn’t fully understand the concept behind the cycler payplan at the time, or I would have never even considered involvement with either of them. Both programs proved to be very popular for well over 1 year, yet if you searched for current discussion about either of these programs now in 2009, you’ll essentially find nothing more than gravestones marking the excitement that died off after 2008. Both sites disappeared once saturation struck their cycler models. The owners of each program most likely walked away with millions of dollars, while the majority of members were stuck sitting in the first matrix board – No progression, no profit, and nothing to show for their membership fees (or “investment” as some called it).

In the aftermath of cyclers, very few people as a percentage of all members can honestly claim they made a profit. Unfortunately, the payment structure is designed to immediately reward the owners of the scheme, but only payout previous members once an entire new wave of newbies come to the table with $250 each.

But isn’t $250 the maximum that anyone in TVI Express can lose?  NO – Not necessarily!

You may look at the TVI Express and scenario and think – “Well, it looks like losses are capped at $250.” However, that is not technically true! Many teams and building networks actually encourage their new members to purchase multiple positions for $250 each, without even fully explaining to them that each new position will require even more recruiting efforts before it can be pushed out to a level of profit. Therefore, you will eventually hear horror stories from people along the lines of – “I spent thousands of dollars in TVI Express and I haven’t seen a penny of profit yet! What do I DO?!”

In fact, during the past week alone, two of my business partners mentioned that they know people that have purchased several positions in TVI Express with nothing to show for it. While one of these individuals only purchased 3 positions, the other spent over $10,000 for TVI Express matrix board spots! Unfortunately, unless they are expert marketers or heavy recruiters, neither will ever see a profit.

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It appears that many people who joined TVI Express did so because a recruiter or marketer led them to believe that they could simply pay $250, quickly cycle to the top, and then grab a quick $15,000. In other words, they don’t even understand how their own business works! What many of these people were NOT told is that successfully cycling and progression to profit requires a great deal of recruiting and strategic team placement. It’s these people I feel sorry for the most, because soon enough, people in TVI Express will realize that their $250 membership isn’t moving. TVI Express momentum will die down, and their matrix positions will be stuck in the mud. At this point, I expect many people will also dub the program a “SCAM” and hang their heads with disappointment.

Once again, I would agree that TVI Express has drawn an exceptional amount of attention when compared to the average internet opportunity today. However, the downfall of cycler programs is inevitable, and I fear TVI Express has essentially reached the height of its popularity.

My advice to MLM leaders and all respectable marketing networks – if you’re currently looking at TVI Express and trying to debate whether or not you want to involve yourself and your team with it’s “business opportunity,” turn around and don’t look back! As stated earlier, major recruiters may find themselves at the top of the final matrix and earn some money; however, it will come at the cost of leading several other people into a program that will only leave them $250 poorer. As a responsible MLM leader or marketer, you should be recommending programs that are built to last for the long-term and structured in a legal, profitable way for all members. TVI Express does NOT pass the test!  If you have your heart set on a Travel MLM company, find another!

In conclusion, TVI Express and its red flags may not necessarily relate to the typical ponzi scheme aspects that the Ponzi Scheme Alert organization usually attempts to address, but it does show all the signs of the cycler “get-rich-quick” scam and would most likely fall under the “illegal pyramid scheme” definition by FTC standards.

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During the discussion of some of my former articles warning about other dangerous programs, I was asked by many people if I knew of any respectable, profitable opportunities as substitutes. Therefore, I will offer an alternative to those interested, but I will not be discussing it in great lengths here since the topic is TVI Express:

If regards to TVI Express, if anyone reading this article is angry about their failure to receive a profit and looking for a long-term option – or maybe you passed on joining TVI Express and are looking for something profitable in general – I do work for a network that provides passive income opportunities to all it’s members, even if they never recruit a single sole. The business model is ethical, and does not consist of any ponzi scheme, pyramid scheme, or other scam based elements. You can contact me here for more information: Info@PonziSchemeAlert.com

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- Mr. Ryz

www.PonziSchemeAlert.com

If you dare enter the domain of HYIP gambling (and I highly recommend you DON’T, for the records), you’ve probably come across programs offering outrageous rates of return. Some of these blatant ponzi schemes actually claim to offer their members 100% ROI in a single day.

However, if you think that return sounds outrageous, wait until you get a load of the industry’s new blatant scam series. The very first program in this scam ring that caught my attention was a website known as Robo Profit, offering up to 2500% in just 1 day! In fact, if you want to just sit around and drink a cup of coffee for 10 minutes, you can let your money turn a 350% profit according to the advertisements on the main website. See for yourself:

I thought the madness ended with the Robo Profit scam, but after examining the advertisements on the site, I discovered three more obvious HYIP scams offering very similar ridiculous returns: Pure Invest, Profit Trust, and West Forex Investment Corp. West Forex even advertises 20,000% in one week!  All these scams essentially claim to trade forex in order to deliver profit to their investors, but obviously there is no market in existence that can generate such absurd ROIs.   These are all blatant “Forex HYIP” scams.

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What’s the connection between these scams?

I’ve seen scamming networks like this before, and essentially the administrator / operator of the Robo Profit scam is running all the other similar scams and linking them to each other. Whoever is behind this ring of junk programs probably realizes that the vast majority of people who visit one or more of his HYIP websites will simply laugh and click “back;” however, an occasional HYIP novice may fall for the hype. After all, think about this – if the scammer suckers just $20 away from random people on each of his sites per day, that’s $80 a day and $2,400 per month that this thief is stealing on a regular basis.

Also, make sure you don’t fall for the deceptive account information numbers available on the sites. On Robo Profit’s main site, for example, the account info box displays total deposited of “$11.1 Million” and nearly $0.98 Million” withdrawn. The operator of this scam is clearly displaying false numbers; just another trick to attempt to entice novices to throw their money away in this ridiculous ponzi scheme ring.

This particular ring of scams may have been easy to spot, since the rates advertised are beyond laughable. However, be forewarned that other groups of internet ponzi schemes that offer a slightly more reasonable rate are composed of a very similar nature.  Be very careful to look for signs of “fishy banner advertisements” or other suspicious endorsements on any program’s websites. Absurd ROIs aren’t always the best ponzi scheme giveaways in these situations.

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- Mr. Ryz

www.PonziSchemeAlert.com