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

The month of August is upon us, and we quickly approach the one year anniversary since the last time Nick Smirnow paid any member of his investment group, Pathway 2 Prosperity, (often abbreviated “P2P”).  I watched enthusiasm for the Pathway 2 Prosperity program slowly die away during the past year, as many loyal members and investors slowly began to accept that Mr. Nick Smirnow wasn’t the “man he claimed to be,” and P2P was most likely not a genius money machine after all.

As angry investor testimonies began to pile up on the internet, I felt compelled to help victims find the directions for reporting this fraud to the proper authorities.  The current investigators at the time were Andy Muller of the Ontario Provincial Police, and Jacob Gholson, a United States Postal Inspector.  Canadian victims are now urged to also forward their completed victim questionnaire to Detective Tanya Hodgin:  tanya.hodgin@ontario.ca

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I’ve been familiar with the so-called “HYIP / Autosurf” arena for many years now.  Although I’m accustomed to dealing with emotional cheerleaders and poor logic attempting to defend HYIPs and programs filled with multitudes of red flags, I must admit that the Pathway 2 Prosperity fiasco did frustrate me more than usual.  Even after P2P ceased payments for months, the internet continued to be littered with endless comments and taunts from some of the most arrogant, shameless promoters and members I’ve ever come across in this dark industry.

Now that the reality of Pathway 2 Prosperity is starting to become clear to great amounts of members, most of the obnoxious aliases have disappeared from popular forums and blogs.  However, many blind faith Nick Smirnow supporters continue to linger on and speak nonsense.  I originally planned to post 2 articles about the Pathway 2 Prosperity scam on our main PSA (Ponzi Scheme Alert) site and leave it at that.  Unfortunately, I’m still seeing plenty of jeering at P2P contenders and poor arguments defending Nick Smirnow.

I don’t want to see P2P victims confused by Nick’s emotional supporters, because then less people will be tempted to forward their testimony and completed questionnaire to the U.S. / Canadian authorities.  The more victims that don’t bother to do this – the greater odds that Mr. Smirnow will get away with this crime.  Therefore, if YOU are a victim of Nick Smirnow’s Pathway 2 Prosperity and you have not yet filled out the “Victim Questionnaire,” I urge you to read our article HERE for more information.

Now I’m going to address some of questions I’ve received or seen on Pathway 2 Prosperity forum related discussion:

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“How do you know that Pathway 2 Prosperity was an illegal ponzi scheme?  How do you know Nick Smirnow was lying to investors?”

I don’t claim to have the gift of omniscience; nor am I a P2P “insider.”  However, I can offer you basic logic and reason.  What some Nick Smirnow / P2P supporters still don’t appear to realize is that all long-term ponzi schemes have a very distinct pattern. These sophisticated ponzi schemes all follow a nearly identical series of red flags.

Whenever I hear a stubborn or frustrated ponzi scheme participant say – “You don’t know anything, because you’re not a member” or “This program is different from all the other shady high yield programs” – I can’t help but chuckle to myself.  An experienced researcher in this industry usually doesn’t need to spend more than 1 – 2 hours to complete unbiased due diligence on a program and determine whether or not it has an abundance of ponzi scheme related red flags.

Nick Smirnow offered incredible rates of return to his investors without providing even a shred of proof concerning his investments.  Once increased rates of exponential growth subsided, payments ceased and Smirnow vanished. Member support and faith seems to be primarily based on the emotions that merely resulted from “being paid.”  The only defense that was presented from the P2P administration essentially resembled a tantrum thrown by a child who was “caught with his hand in the cookie jar.”

This series of P2P related events follows the pattern that has been observed by several other “investment programs” utilizing a ponzi scheme model.  It is, therefore, my strong opinion that Pathway 2 Prosperity was nothing more than a long-term ponzi scheme. As I have told a couple “passionate” Nick supporters via e-mail in the past months, I would be happy to remove my articles about Nick Smirnow and P2P as soon as he is willing to prove the legitimacy of all his investment activity to me and his membership, as required by law.  (For the records, no one should expect this to happen anytime soon.  )

“What good will it do to cooperate with the government?  In similar situations with large scale ponzi schemes, the government takes money and the victims receive little to no refunds.”

Unfortunately, there is some accuracy to this statement.  The courts and lawyers are always the first to be paid, and the legal process does indeed take a considerable amount of time.  This is one of the primary reasons that ponzi schemes are so treacherous- no matter which reason the program is eventually ended, the vast majority of members or “investors” end up losing money.

Maybe some of you have been reading about a similar program that once faced the same issues.  It is known as 12 Daily Pro; originally administrated by Charis Johnson and then placed under control of Thomas F. Lennon, U.S. District Court appointed Receiver.  All assets were seized back in February of 2006, and many people who have been told they will indeed “receive a settlement,” i.e. refund, are still awaiting their check in the mail.  Therefore, it’s difficult to predict what (if anything) P2P victims will be able to collect when all is “said and done.”

Am I personally fond of the heavy fees collected through the “preferred payment” structure associated with the legal forces in these cases?  No, not necessarily, but I still recommend all victims report their accounts of theft to the authorities.  I certainly can’t foretell whether or not anyone will see a penny, but I would assume that the chances of a criminal brought to justice are improved when a greater number of testimonies are submitted to the proper authorities.  After all, even if the “refund pot” is sucked dry, ponzi scheme fraud still deserves to be punished.

“Is Chris Balsdon, Gary PVR, Wise Owl, Taplyne, etc. of the former Moderation Staff just as guilty as Nick Smirnow in the Pathway 2 Prosperity scam?”

Some of these P2P Moderators have claimed that they were nothing more than “volunteers” and truly believed what Nick Smirnow had told them; i.e. they were victims like everyone else.  I do not doubt that the Moderation Staff was a group of volunteers; yet, as long-term members, I would have a hard time believing they didn’t all earn a pretty penny off of P2P related “investments.”

But, did they know about the true illegal, ponzi scheme nature of the P2P program all along?  Well, I’m not sure anyone can judge that at this time.  In fact, I have also personally been the victim of a ponzi scheme operator who played on my emotions and convinced me that I was “helping others” by rapidly promoting his program and working for his forum, only to discover that he was a vile scammer.  Therefore, I recognize that a similar situation may have applied to the Pathway 2 Prosperity Moderation Staff.

However, I am not necessarily saying that all former P2P Moderators should be let off the hook.  When I learned I had been lied to and betrayed by a ponzi scheme administrator, I was ashamed of my carelessness and greed. In order to prevent myself from ever being involved with something so sleazy again, I immediately realized the need to learn how to carefully complete due diligence and spot all the red flags of a ponzi scheme.   This required a resolution to put logic and patience before greedy desires of “high ROI.”  In the process, I quickly realized that spotting long-term ponzi schemes is usually not very difficult.

And that is exactly the part that concerns me about some of the former P2P Moderator’s ability to simply claim “ignorance” and expect a free pass.  Some of these individuals took part in Moderation positions for very similar long-term ponzi schemes; one of which will never be forgotten by HYIP / Autosurf history:  Bob Krimm’s Tri-Star Media. Once the Bob Krimm series of ponzi scheme “investment programs” went belly-up, his Moderation staff also claimed ignorance.

That, right there, definitely worries me.  Will they put a limit on reckless behavior in the future?  After Pathway 2 Prosperity also fades away into history, are these allegedly “innocent” Moderators going to find themselves sitting in a similar boat?  Or are they going to take some responsibility for their actions and make a reasonable effort to refrain from becoming involved in yet another illegal mess?

Time will tell, I suppose.  The best line of advice that comes to mind if you find yourself researching a program and discover a similar name from P2P staff is:  “Do your OWN due diligence, and then make the intelligent decision.”

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Finally, I’d like to take this time to mention and thank a couple dedicated Pathway 2 Prosperity contenders that have diligently attempted to open the eyes of confused P2P members, while ignoring the senseless bickering and jeering of cheerleaders on the forums for the past several months:

* Trader J / cvkint (Jody)
* Lynndel

I may not have necessarily agreed with everything they said in P2P related forum discussion; however, I believe they deserve some recognition for trying to show people the true nature of this program and therefore save them time and misery.

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I will leave the comment section open, but I ask that all posters try their best to keep it clean.  I welcome honest discussion.  If, however, you fit the mold of a troll or troublemaker, save your comments for one of those forums that hosts a variety of immature garbage. It will just be deleted here.

For more information about Pathway 2 Prosperity, read our article on the main site.

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- Mr. Ryz

www.PonziSchemeAlert.com