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.

Tags: Cash Tanker, Genius Funds, Genius Funds scam, HYIP, HYIP Industry, HYIP scam, online investmest, ponzi scheme