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So You Want to Invest in an HYIP/Ponzi Program?

Based on an original article by BTCMania and continued with her permission

Introduction

First of all you should never invest into any online program with money you aren't prepared to lose. I've heard of people selling their cars or investing life savings, only to lose it all in the end. So don't invest your life away on these high risk programs.

HYIP stands for High Yield Investment Program, a Ponzi-type program which promises an attractive rate of interest for a relatively short time investment. The typical period of a HYIP investment cycle is between 30 days and 60 days.

All information presented below represents my opinions and should not be taken as being the opinion or statement of Bitcointalk.org

Why Do People Invest in an HYIP

There are two types of people involved in HYIP investments.

1) The quick in and out investor : This person is aware of the risks, expects the HYIP to disappear at any time and will invest his money as close as possible to the HYIP's startup date in order that he can exit the program as quickly as possible.

2) The ignorant investor : This person is unaware of the risks, and invests based solely on the information presented to him or her on the website. No background check is done through HYIP monitors, Google searches or forums related to HYIP investments. These are the investors who stand to lose thousands of dollars.

Personally I am against paying into these programs. They are based on deceit, false information and fake identities. Those who gamble their money knowing the site is a fraud, are making these websites profitable for those who operate them. These people don't just operate one website. They return time and time again to continue under a different name. I would be all right with this if everybody that invested KNEW that they were investing into a scam. Unfortunately honest people who are unaware of the scam also end up suffering financial losses.

HYIP (High Yield Investment Programs) are ponzi schemes. Ponzi's work much the way a chain letter works. One person invests money into the chain, another person follows and part of his investment goes to the first person in the chain.

For example:
•Fred invests $100, John then invests $50. Fred receives $150 (his own investment plus 50% coming from John's money).
•John waits until Sam comes along and Sam invests $200. John then receives $75 (150% profit).
•Sam then has to wait until Bob invests $50 and Mark invests $100. Sam receives $300 profit out of Bob and Mark's funds.

This is the chain in action. A new investor (or multiple investors) are needed to cover what is necessary to pay the last investor. Should new money stop flowing into the system, the Ponzi will fail.

Identifying Risks

While you should go into HYIP programs expecting they will one day disappear, there are some signs to look for to recognize if this is going to be a potentially long-term program or a quick grab and dash. In either case remember what I have said - invest only what you are prepared to lose.

Some HYIP programs have been successfully operational for over a year, others lasted no more than 15 days.

1) Check the website's http://www.whois.com information to determine who registered the site. In all likelihood this information will be made hidden through commercial services that privatize such information. Ordinarily invalid WHOIS information means your domain could be subject to being removed however when a privatized service is used, the domain information could be bogus and you'd not ever know it. Don't rely on this information except to give you an idea of where the site was registered, and for how long it is registered.

In the case of Twelverized and Leancy (the later involving over $5 million in funds taken), the sites were only registered for ONE year - very short term. [It was only after I mentioned this in a forum post that Leancy changed their domain to expire in the year 2020. Short term sites will not pay for long-term domains.]

2) Does the company have an address?

Would you feel safe investing in a company with the above contact information? Many do. A company based in "London, England" is quite a span of territory to look for if your money goes missing. Companies such as Leancy may also use addresses that don't exist. Never treat an address as a sure sign that the company has a physical location but treat the lack of an address as a sure sign something is wrong. If you can find an address, try using Google Maps or a Google Search to determine if it's valid, perhaps ask someone who lives in the area. If the address returns to a multi-business building, consider emailing one of the businesses and ask them if they could confirm that this HYIP firm is in the building.

You should be aware that most of these addresses are fake and you should not treat an investment site with an address in England (or any other country) as being legitimate.

3) The famous certificate.

Many companies that solicit your hard earned money will feature a 'certificate' on their website. These certificates are purchased for 15 British pounds through Companies House. The Companies House website is available here:
https://companieshouse.gov.uk/

Using the website you may search for a registered company by their registration number. Take note that anyone from around the world may create a company based out of the UK using false information. Do not accept these certificates for being credible. In fact in the case of Leancy, they were registered with Companies House in the UK while listing a German postal address. It seems some sites will simply register for the sake of having a certificate, but if the information provided behind the company is bogus that certificate is useless isn't it?

The clowns that run HYIP sites seem to think that by simply posting their certificate and proclaiming, "Here is our certificate showing we are a real company" that they are trustworthy. ABSOLUTELY NOT.

4) Who are the players?

First and foremost, who runs the site?

Leancy's main PR person is a "Ryan L Roth"
Twelverized's main PR person is a "Mark Ferreiro" and the manager was a Mr. Farid Lee.
21days.biz main PR person is a "James K Hull" from Chicago.
Stemcelltechs main businessman is a "Martin Schreiner"

Sounds good, we have actual names to go with the firm. Now try Googling "Ryan Roth", "Farid Lee" or "James Hull" and see if you can find any of them on the internet. Sure you'll find the generic names but you won't find any association with an investment firm.

Twelverized

In the case of Farid Lee (Twelverized.com) you won't find anything at all.

When I questioned Twelverized on their Facebook page as to why there was absolutely NO information on the internet about Mr. Lee, I was told by Mark Ferreiro that Mr. Lee was "not obligated" to provide any information about himself. I responded that while that may be true, it was unusual that Mr. Lee had "21 years" in investing yet there was no internet footprint about him. Another caution sign: Mark Ferreio and Farid Lee both registered on Facebook on March 2nd, 2014 just ONE DAY before Twelverized opened.

If the administrator or head PR person of the HYIP you're looking to invest in, has been around Facebook as long as your loaf of bread in the kitchen, I'd be very cautious.

Leancy

Ryan L. Roth cannot be found, at least having anything to do with public relations and/or investments.

StemCellTechs.com

See if you can find any mention of a Martin Schreiner and stem cell research, other than their HYIP website.

21days.biz

Let's take a look at 21days.biz and a closer look at James Hull, the administrator of their Facebook page.

Would you look at that? This James Hull from Chicago, Illinois also happens to be an identical twin for a doctor William Neary out of the UK. What's even more incredible is that the background is identical. Amazing! And these guys want you to trust them with their funds?

ARGH! I give up, will someone show me a legit company!!!!!!!!!!!!!!!!

What? You suggest Barclay's Royal Club? Okay let's try them out.

Well right from the start I see a glaring problem. It seems that Dr. Marsh suddenly changes his name to Dr. Warfield in the second sentence. Maybe it was just a typo, perhaps there is still trust to be found with Barclay's?

(Editor note: Royal Barclay's did indeed scam their investors, shortly after the publication of this article)

^ I'm pretty sure that actress Meryl Streep is not working for Barclay's nor has she changed her name. Grin

I'd estimate that 99% of all HYIP's use fake registration information, fake profiles and fake names. But hey, you can trust them with your money right?

Let's take a look at United HYIP League. Granted they do have an address for the company which I could not confirm. Their "PR Consultant" however is 100% bogus, a stolen photo of a model.

These clowns also turned out to be a scam.

Which brings us to our next chapter....

Photo Theft

In the above section you saw that I was able to find fake images used by these HYIP sites.

Determining if a photo has been used from another source is not difficult to do with Google. Keep in mind that some photos may be taken from websites not indexed by Google so you may not always be able to determine if a photo is authentic.

Let's begin with Leancy's PR spokesman, Ryan L Roth.

Okay, this company has a spokesman, he looks reputable... you might be able to trust him with your money.

STEP 1: Save the image to your computer.

Now for this particular image you're unable to right click and save it. What I did was captured the screen by pressing Print Screen and then cut out the image and saved it to the computer separately. Ordinarily you would just right click and save the image to your computer.

STEP 2: Go to Google Images

STEP 3: Click on the camera icon and select "Upload an Image"

And Google will tell you that the photo belongs to an unsuspecting Google+ user:
https://plus.google.com/117881706355020970177/about

The Women Cheerleaders of HYIP

Women don't lie to us right? Surely they must be honest. There seem to be quite a few women who are involved in HYIP promotion, many of whom are naturally gifted with beauty. These women seem to always be our cheerleaders, telling us that they have invested hundreds into HYIP's and so should you.

I suspect these women are really men, using their sexy photos as a means for you to invest in their latest scam.

Let's take Ashlyn:

Let's see who "Ashlyn" really is... we'll copy her photo image from Facebook and paste it into Google Images.

Aaaaand take your pic from at least five names, most of them Russian.

Here's another well known HYIP promoter. She is one of the most vocal ~~spammers~~ cheerleaders on the internet who will try to persuade you to "join my winning team" and invest in the same sites that she is. These people receive a percentage (usually 3-5%) of whatever funds YOU invest using their referrals.

Let's see who...

she really...

...is

So while you're looking for a place to lose your money to invest in, just remember that more than likely you're dealing with wolves promoting in sheep's clothing (or men with women's photos). These people will tell you that they have hundreds of dollars invested in programs. They will post photos of their investments revealing how much they are depositing or how much they've withdrawn. Most of the time the money isn't theirs, but rather money from YOUR INVESTMENTS which they've earned a referral from.

Referrals

Be aware that some people generate a profit by simply promoting these scams, they invest none of their own money - but make money from YOUR referral. A referral usually looks something like this:

www.myponzi.net/index.php?ref=bob111
www.scammer.com/~bob111
www.ripmeoffplease.com/?ref=bob111

In these cases bob111 will receive a percentage of what YOU invest. It's not dishonest, but it certainly does encourage people to promote spamming the hell out of forums. I've accepted these people as friends on Facebook and had them spam my wall within 60 seconds. These are not 'friends', these are opportunists.

If you look at any Facebook page regarding HYIP websites, you quickly realize that you're swimming in a pond of scum. People continually advertise programs that have nothing to do with the website page you're visiting. They spam, they flood, they post the same ads repeatedly. These people only want you to invest your money so that THEY can take a cut of the profits by way of referral.

Some of the more common terms thrown around by these cheerleaders (men hiding behind female photos) include:
"Invest now, the early bird gets more worms"
Translation: Invest now before the site stops paying out and scams the late investors.

"Run by legend admin" or my favourite "run by trusted admin"

And yet nobody, including the idiots who use these phrases, even know who the admin is. They are far from trusted.

There's a reason these people shove these referrals down your throat and try to get you to invest under them.

Recourse

As much as we leave a digital trail, you'd be surprised as how easy it is for these people to get away with your money. First of all, in order to initiate an investigation you'd have to file a formal police complaint. Since taking part in an Ponzi scheme is illegal in many countries, many victims say nothing.

Even if you were to investigate these financial crimes, the websites tend to operate from offshore locations which are out of legal jurisdiction. This isn't to say that tracing these people is impossible but is certainly a time consuming and expensive process. The best way to avoid being scammed is not to take part in a scam in the first place.

Final Thoughts

There are some HYIP programs that have been able to operate beyond 30 days. The sites that offer the largest returns are usually the ones to fold the soonest.

As an example: "earn 400% in just 1 day sites" are not going to be able to continue to pay out beyond a few weeks. whereas a "earn 3% interest for 30 days" site is going to be able to continue to pay out for a month.

In the end though, ALL HYIP sites (EVERY SINGLE ONE) will scam you. They pose as forex traders, oil contractors, bitcoin investors, but they are no investors. They are thieves.

Pay attention to:

- Site admins that speak in broken English, many of these scams originate in Russia
- Domains registered in China, hosted in offshore locations, with a UK certificate of incorporation.
- Promises of fast cash in under 30 days (did you really think you could earn 400% profit in one day? Seriously?)
- Staff whose names result in no Google results
- Flashy website clipart of businessmen in suits. You're most likely looking at a balding man in a spaghetti stained T-shirt being the real admin.
- No contact information
- HYIP sites thayt suddenly 'remove' the links on their website that point to review pages or HYIP monitors. They do this because they don't want to reading the negative feedback that is now coming in.
- Do not believe the total deposits on the page. Deposits of $4,000,000 USD could easily be faked by the site to make it look like everyone and their dog has invested. In reality they may only have $200,000 US from investors.

And if you throw all of this advice out the window and choose to invest anyways, I urge you to always check the HYIP Monitors for the website. A HYIP Monitor is an independent website that invests money into HYIP's and reports on if they received a payout. It's a good way to learn if the site has turned to scamming.

Note that some HYIP sites will continue to pay out to HYIP monitor accounts while not paying anyone else. This is to retain their positive "PAYOUT" status while not paying anyone else.

I highly recommend that anyone who wants to know more about HYIP or monitor scam status', visit David's website at:
www.davidnews.com

David is a neutral and honest person who provides the latest news in the HYIP industry.

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