HYIP Top Tips

1. • Set your personal rules. By this, we mean the following:
1. o Set how much you will invest in each company you join & what your get out strategy is.
2. • Remember the number one Golden Rule: ONLY INVEST WHAT YOU CAN AFFORD TO LOSE
3. • Of your profits, how much will you reinvest, how much will you keep (use percentage figures).
1. o How much extra will you invest per month
2. o When will you pull the plug on a program
4. • Spread your investment through multiple companies for damage limitation. Remember even the best HYIP company can go bust at any time. Ensure that your investments are spread enough that you don't lose everything.
5. • On a similar note, diversify your investment type. Invest in programs that use (or at least claim to use) Forex, stocks and shares, arbitrage betting, real estate, pooling, or any other type of investment.
6. • Regain your principle ASAP. Remember, as soon as you've regained your principle, everything you make after that will be profit, and any profit you lose will mean that you lost no out-of-pocket expenses.
7. • Don't get greedy! It's far easier said than done. You see you are making a little bit of money; you want to make more, so you invest the month's rent/mortgage, and before you know it, WHAM, the company has gone bust, taking all your invested money with it.
8. • If a program has been going well for several months, and there is suddenly a drive to get new members, like a increase in referral commission or a new advertising campaign, this could be a sign the program needs more fresh money.
9. • NEVER join any program that promotes itself through spam. Either on forums or through emails.
10. • A program that pays more than 1% a day, or 20% or more a month is a ponzi. Everything else should be considered a ponzi until proven otherwise!

11.• A program hosted on a free server should set off alarm bells in your head, shouting DO NOT SPEND!

HYIP Tips From the Pro’s

Here are some top HYIP tips from those that have been involved with HYIP’s for many years. Listen to what they have to say, their advice is invaluable for a newbie. We have used their forum usernames so that you will get to know who we’re talking about.

‘Eagle9’ Says…

1) Dont ever play with money that you really need and always expect to lose it and you won’t be disappointed.

2) Always try to spread your portfolio over many programs, so that if one goes down? You dont lose your all and remember there is no need to run before you can walk. There is plenty of choice so dont rush to spend look around and decide responsibly.

3) Always get your spend back as soon as possible then play the game with their money.

4) When you are playing with their money never get greedy always take a little every day, week or month, this allows you a credit build up.). And always try to expand your Portfolio with their money not your own money.

5) Never get into a program too late, past experience proves that most HYIP's only last on average 3-6 months after this the Ponzi effect takes over and the latecomers lose out.

6) The best rule of thumb on % rates for most average programs are within the 0.05% to 1.9% per 5 day week the higher the rate the higher the risk and shorter the life.

7) We used to say never spend to a free site as they are guaranteed to run with the money. But nowadays because the cost of a Dot .Com is so cheap you need to look a little deeper.

a) Scripting Value (how intricate it is)

b) Presentation

c) Thought gone into the site.

d) Actual cost to them in building the site

e) How long it will take them to recoup their initial cost and profit before they decide to run.

f) Business Registration, Contact or address.

g) Always look at it as a game and don’t bank on it for your income, whatever you make is a bonus and use it as such.

h) And last but not least don’t expect and you won’t be disappointed.

‘Braveheart’ writes…

1. You need to look at the rate of return and how quickly you can get your initial out. If the return looks unrealistic but the return time is short and the program has not reached max. capacity go big to get your initial out. Play with profits then only.

2. Timing is crucial. Judging if the max. capacity has been reached is very difficult. If you think the life has almost gone out of the program but the story is good and lots of people believe the hype then go in with 100 or so.

3. If it is real you will make back your initial and then some. Don't rush or feel you are missing out because if it is real it will probably run for a year or more and you will make enough.

‘FSamec’ writes…

There are always the standards:

Don't invest more than you can afford to loose.

Get back you initial investment as quickly as you can

Try to find out as much as you can about the admin.

Then the not so standard:

1. Other people's money. Get other people to invest with you. Offer them about half what you are getting, but always tell them about the extreme risks.

2. Be prepared to make some people angry. If you invest their money and loose it, they will get angry. Get over it. If you told them about the risk and they still invest then it is not your fault. If you didn't tell them about the risk and you loose their money then it is your fault and you need to figure out how to pay it back.

3. If they have a compound feature, use it for about a month and then take out as much as you can. It will get your initial investment back quicker. Don't wait longer than a month to take some out. If you do, you will loose in the long run. Don't get greedy and don't get smug. If you are dealing with a con man, he is generally smart and knows what he/she is doing.

4. Don't take anyone's word for how good a program is unless you know the person. Don't trust anyone who won't give you a phone number but keep in mind that prepaid cell phones are cheap.

5. If you can, check the admin's background and include their spouse if possible. If anyone had done that with William Louden [See Nova Lights scam] they would have found out that his wife worked a low paying job at a prison. Not someone who you would give your life savings to. With the shear amount of scams that the online HYIP arena has seen, it's a wonder why people haven't learned the expensive lessons of others before them.

Maybe the reason lessons haven't been learned is because the major scams don't get the documentation they deserve once the owners have run with the money.

Most people seem to want to forget that it ever happened to them, and as a result, will never mention it again. If this is the attitude of many investors, how are the newbies supposed to learn anything?

I've taken some of the biggest scams from the last few years and written articles, or case studies on each of them. Outlining the program details, the story that unfolded, and at the end, what you should have learned from the case study, and hopefully you will begin to recognize the features in some of the newer scams that come along.

1. • Case Study #1: EZ-Bucks.co.uk – The Great Scam Of 2002
2. • Case Study #2: The 2PercentNOTHING Scam
3. • Case Study #3: GoldExcel - The EXCELent scam
4. • Case Study #4: NEO - Nothing New About This Scam
5. • Case Study #5: FXTO - The DD debacle
6. • Case Study #6: EIC - Easy Investors Conned
7. • Case Study #7: Brideby - Do these things never die?
8. • Case Study #8: Nova Lights - The Great Scam of 2003
9. • Case Study #9: Foreign Fund - The Foreign Scam
10. • Case Study #10: S&S Investments - 1000 posts = $500k!!!
11. • Case Study #11: Free Land Opps - Scam coming to you soon! (aka The Great Scam of 2004)
12. • Case Study #12: WeeklyGold - Would the real Mario Degryse please stand up?

Case Study #1: EZ-Bucks.co.uk – The Great Scam Of 2002

The HYIP/Gold Game arena is full of scams. However, most often, they can be recognized from the outset. Either through poor design, free hosting, ridiculous payout plans or rumors on the various forums.

That was before EZ-Bucks.co.uk came along in the summer of 2002.

EZ-Bucks.co.uk was flash, cutting edge and smooth. The website was flawless; it looked like a real investing company. It paid 2% every day, with compulsory re-spends every 30 days.

It was based around an un-moderated forum. The admin, who called himself Danny Jacobs was open and honest, and often funny on the forum. He dealt with all the problems, queries and comments swiftly and efficiently. In short, he was the perfect admin.

People couldn’t praise him enough.

After a month, it was still paying and growing in popularity.

But already there were questions being raised. The ‘real’ contact information was disputed. Although the address definitely existed (I’ve even been there), the mobile phone number was not in use. Danny claimed that he had to cut it off because of so many people calling him.

Everyone accepted this explanation.

It carried on for three months, consistently paying everyone every day.

Quickly it reached more than 2000 members, and soon there were calls to go private. The reason being, every other program that has gone private did so around the 1000 to 2000 membership mark. Danny assured everyone that it was in the pipeline and he was sorting it out.

EZ-Bucks.co.uk was then endorsed by PureInvestor.com, a MLM investing company with over 10,000 members. They claimed to have talked with and met Danny Jacobs. They requested that everyone sign up under their referral link (they got a 10% referral commission from it).

With this endorsement, the membership rocketed to 11,000 members. There were more vocal calls to go private, but more alarmingly there were a growing majority claiming that EZ-Bucks.co.uk was nothing more than an elaborate ponzi scheme. These

rumours filtered to the on site forum and were quickly quashed by die hard members.

Shortly after the forum was locked.

The reason? It was becoming a bandwidth burden on the server and required to much maintenance. Again, most people accepted this.

Then, four months after it started, in mid-November it released a new program: 200% in 30 days. Danny claimed that several investments were exceeding market growth and he was in a unique position to offer this program for a limited period of time. The minimum cost would be $25 per unit, and there would be just 100,000 units.

For some, this was the final nail in the coffin, but it merely encouraged another few thousand investors to put their money in. The membership swelling to 17,000. EZ-Bucks.co.uk was number 1 rated across every single HYIP rating site.

Before the units were about to mature, Danny said he was able to issue another 200,000 units. These were snapped up within days-despite the fact that the other units hadn’t proven themselves yet.

A few days later, the first batch matured and there were jubilations as everyone received their 200% profits. Many simply reinvested everything. Others, seeing the success invested their life savings in to this program. One person even re-mortgaged his house for $100,000 to invest.

It was now mid-December. The second set of units were set to mature. Going from the history, most thought Danny would issue another set of units.

What actually happened frightened the life out of the bigger investors, and was a very sobering experience for the smaller investors. It was the start of the end of EZ-Bucks.co.uk.

Danny now claimed he was able to TRIPLE your money in 30 days. The cost? A mere $5000!!! 60% of people now saw EZ-Bucks.co.uk for what it was, an elaborate ponzi and withdrew all their money.

However, there were some greedy souls who thought that they could earn at least $15000. In short, they invested from the heart, not the head.

At the end of December the EZ-Bucks.co.uk site went down. Only to re-surface again a few days later.

On January 3rd, 2003, EZ-Bucks.co.uk made it’s last payment. However it still accepted new spends, and people were still joining and investing in their hundreds. The final membership count was around 18,500.

Believers were stunned. Those that had invested everything they owned were sick to the bottom of their stomachs.

The closure of EZ-Bucks.co.uk left a trail of misery. It is a story of greed beyond all proportions.

So now, nearly a year after it all happened, what can we learn from this fiasco? Well, let’s look at the signs from the start.

1. • Danny wouldn’t divulge how he made the money. He just vaguely said it was various funds and trusts.
2. • Danny’s contact details were claimed to be false. The telephone number he gave was false.
3. • Re-spends were required. Suggesting that the program needed an ever increasing amount of money. Any real investment does not require re-spends.
4. • Calls to go private were largely ignored.
5. • Referral commission stayed in place, even after 5000 members.
6. • The forum was suddenly locked after rumours of a ponzi were cited
7. • New 200% units issued. High min meant more money was required
8. • Another 200,000 units were issued before the first set were about to double. Indicating that these units would pay off the first lot of units.
9. • New $5000 units were issued. Signaling EZ-Bucks.co.uk desperately needed more money. It also signaled the end of EZ-Bucks.co.uk

Hindsight is a wonderful thing. Looking at the key points of EZ-Bucks.co.uk history, we can easily see the warning signs and the red flags.

An investigation was started, but Danny still hasn’t been found. It is thought that he made over $3 million dollars from his little scam-not bad for 6 months work. At the time of writing, I believe that despite the investigation, I think there is no chance of investors getting their money back.

Expensive lessons were learned from The Great Scam Of 2002.

Case Study #2: The 2PercentNOTHING Scam

It would be thought that after the expensive lessons of EZ-Bucks.co.uk, people would be less inclined to part with their money, but the 2PercentNOTHING Scam proved that people were more willing than ever to part with their money. The main reason is greed, but you do get the odd person doing it to help their kids.

2PercentADay.com started in November 2002. It was a little known program and little advertised. It wasn’t listed on any rating site and not really mentioned on any forums.

I came across it by pure fluke in mid-December, and put a $5 test spend in. With referral commissions, I’d soon doubled my profits to $10.

The company had 2 different programs, 2% daily compounding and 2% daily payer. The whois information gave a real address. The admin claimed that there were 2 other people based in Australia and France who helped keep the trading a 24 hour thing.

The remarkable thing about this program was the community family spirit of the forum. Everyone was very close-nit, and many were the walking wounded from the EZ-Bucks.co.uk fiasco.

The admin virtually lived on the forum. Problems and questions were solved or answered immediately. He was an active member of the forum too, getting involved in many discussions. He told us all about he family, his home town etc. The only thing he didn’t divulge was what he was investing in.

People soon grew to trust him.

Word soon got around of this excellent program, and superb forum, and members swelled to 1000 members within 2 months. At the start of January, the admin announced what everyone was hoping for: 2PercentADay.com was to go private. People were elated and spends nearly doubled (according to the admin).

Then, mid January he announced that he was introducing a new program because 3 trades were doing so well: The 200% in a month program. Sound familiar? Well, the minimum spend would be $100.

Hundreds invested in this great opportunity. What could go wrong? The admin has proved himself to be an honest and trustworthy

person, he’s got plans to go private, this is the real thing, the answer to my prayers!

After the announcement of this program, several people questioned the validity of this program, and were quickly bashed by other members for daring to even THINK that it could be a ponzi.

Well, end of January came, and suddenly the site went down. The reason given was that it was using too much bandwidth-on an unlimited bandwidth server!

The site reappeared briefly, but the forum was locked. Then the site disappeared again.

This was thought to be a little bit of a coincidence because the monthly doubler was due to be paid out within a week.

After a week, the members got a communication from the Admin via e-Gold memo message to go to a site on Geocities.

There he assured us that he was doing everything possible to get a new site up and running. He was very apologetic and promised to keep us updated. Which he did. Both times claiming he needed more time.

By the end of February it was clear 2PercentADay.com was a big ponzi and was not coming back.

Some people started their own investigation, the first thing they found out was that the name and address listed on whois was false. Then someone phoned the hosting company explaining that they hosted an illegal pyramid scheme and if they didn’t cooperate, they would be taken to court. After this threat, of which the details in the forum were posted, the whois information on 2PercentADay.com suddenly changed. The hosting company provided the details of this character and a full investigation is under way.

As with the EZ-Bucks.co.uk scam, there were many losers who allowed greed to take over. Others, in financial desperation, re-mortgaged their house and invested $100,000. They learnt the hard way that HYIP will not solve your financial difficulties.

So, what were the key moments in this scam’s history that threw up red flags and warning signs? Well, it was very difficult in the beginning, but it follows like this:

1. • The admin didn’t specifically divulge how the profits were made
2. • The other traders he claimed that were part of the program never made a post, we never heard from them

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1. • By far the most important factor: The admin pulled the emotion strings very well, such as posting a testimonial from a member and saying how proud it made him feel, and how he had new resolve to help those in need. He also claimed to have started a charity to help children. He used very emotional posts, which encouraged users to invest with their heart, not with their heads
2. • The guy lived on the forum. He spent so much time on it, when did he have time to do his trades?
3. • The introduction of the monthly doubler start of January
4. • The slip up he made when answering how much he made in trades. He posted a ‘sample’ from one of the previous weeks, but foolishly he included Saturday and Sunday as one of the days he made profits. When someone asked how he made a profit on a non-trading day, he replied that there were other ways to make a profit. He obviously knew something that no other trader in the world knew!
5. • The server ‘problems’.

Once again, 2PercentNOTHING is a tale of greed and misery. I can guarantee it won’t be the last though.

Case Study #3: Gold Excel - The EXCELent Scam

Gold Excel was a surprise success during the summer of 2003. Listed only on GoldGames.org, it was quietly paying investors 3% a day. As it slowly moved up the rankings, it’s popularity grew more and more.

The website was, to be frank, appalling, it looked as if my 6 year old nephew had been given frontpage for the day and come up with a website.

There was no indication of where the money was coming from and the admin was completely opposed to giving his contact details to anyone.

By the time it had reached the top of the rankings, it was a run away hit with all investors. There were some concerned people, who, with past experience knew that Gold Excel could be nothing more than a ponzi. Some people tried to point this out to investors, but were quickly shouted down.

Here’s a forum post I made shortly before the Gold Excel house of cards tumbled:

Pretty much all the members are newbies who are wowed by the whole thing. 80% have never heard of EZ-Bucks (I'm trying to rack my brains for big scams before EZ, but that one just sticks in my mind bcos it was so BIG), and 95% don't know the shady history GG had before its' current incarnation. So basically most of the investors are naive newbies. There are a few experienced players/investors in there, but they all seem to be taken for a ride by this admin 'Dave'.

Talking about the admin, he has refused to provide any information on how he produces the income (he doesn't do it personally, it all goes to a single forex trader apparently), and he won't submit his contact credentials to an independent DD org. Although most of us know that even being DD verified is no guarantee of anything. I mean, imagine endorsing a parking lot...but that'll never happen...Anyway. There is no indication also of how the guy manages to turn around the profits from the trader to investor every day (hell, even at the weekends).

Still, some tried to raise a voice of concern, notably Sean from TIG, Tres of vGoldInfo and stockbroker from this forum (I think). Bcos the noobs have been paid by this guy for so long and are "caught up" in the whole thing, they really bashed both of them, refusing to even accept that gold excel could be a ponzi.

There is honestly no hope trying to educate or point out the obvious to these people, even those with the best intentions. When Sean

made his post, the response was immediate and with venom. Accusing him of all sorts of things.

Recently, someone asked how much they were receiving a day. The answers ranged from $10 /day ($500 spent) to hundreds /day ($5000 plus). I'd say looking at the GG forum, 60%-70% are respending every day. They seem a very greedy bunch, throwing everything that they have in to it.

Oh, there's also still a 5% referral commission.

I think anyone of us would take one look at the site and say scam/ponzi.

I'm also getting (slightly) concerned for some of the people who are involved, and I wouldn't be surprised if some of them have such false faith that they are investing life savings, kids college fund etc. When the cards do finally fall, there will be a lot of destroyed hopes, hopes that were mostly blinded by greed.

No doubt there will be an investigation, it'll drag on for a few months before people get bored of it and move on.

I think the only reason that it has lasted as long as it has, is because so many people are reinvesting everything and then some everyday. I'm also finding it hard to put a failure date on it. Some are saying weeks, others are saying years. Maybe another month...and a bit. I honestly don't know.

A little word of advice to all of you: listen to experienced investors. Although they are not right all of the time (no person is right all of the time), when it comes to spotting obvious ponzi’s, experience is key.

Case Study #4: NEO - Nothing New About This

NEO was an elite private program that many of the more serious investors were involved with at the start of 2003. Gradually it become more mainstream, largely due to the huge monthly returns that it offered, 100% and above.

The unique thing about NEO was that there was no website and all transactions were carried out via email, which were sent to the admins yahoo account. To buy shares you had to let them know, and to receive the money for that month you had to let them know by a certain time, or it was rolled over.

Despite this secrecy they became very popular. Soon they announced that they were going to stop all new spends, and anyone who hadn’t invested by a certain date would not be able to invest. This announcement caused a surge in investments.

Then they started having some problems paying out, people were complaining of late payments. There was no word from the admin, and people lost thousands.

Things to learn from this scam:

- There was no information about who they were and what they did

- They only communicated via free, web based email

- They offered constant sky high returns. Not sustainable, and certainly not around the average 10% - 30% monthly.

- They suddenly changed the program. Any program that suddenly changes for no apparent reason is usually up to no good

Case Study #5: FXTO - The DD Debacle

FXTO was a classic scam perpetrated by an experienced con artist. Again, it was the program for the larger, more serious investor. It had earned itself an incredible amount of respect because it had been endorsed by LPT2, a community of people that put a lot of effort into finding out if a HYIP does real trades, and verifying the contact details.

FXTO had 4 different programs ranging from 110% to 250%. The minimums also ranged from $25 to $500. Some programs paid out within a week, others paid out within 6 weeks.

Because of the LPT2 endorsement, FXTO was trusted by hundreds of people who began putting larger and larger amounts in. Sacrificing their life savings, childrens college funds and all manner of other important savings to get in on this golden goose – the ultimate program.

Another reason FXTO was thought to be so great was because it offered no referral bonus and didn’t advertise anywhere. Thus it was assumed it didn’t rely on new investments (ponzi). This built consumer confidence even more.

FXTO paid out for many, many months. But this was largely due to the fact that people were reinvesting all their principles and profits. All strategies had gone out of the window.

Then suddenly it stopped paying. At first there was wonder on the forum, then concern, and finally anger and pain. People lost tens of thousands of dollars each, either through greed or desperation to make a better way of life for themselves. They were all left with nothing. They let emotion completely overcome them and let themselves dream of riches and money, instead of sticking to the HYIP principles of getting your initial deposit out ASAP and never spending more than you can afford to lose.

There were very few winners of FXTO. Some adhered to the HYIP principles and they made some good money. I myself made a bit of money from FXTO before I stopped investing with them.

It was later discovered that the admin of FXTO was a serial con artist from the Seattle area. He had hundreds of thousands of dollars in his account before it was frozen. It was also discovered that this golden goose program, endorsed by LPT2, was infact based in a car park. In other words, LPT2 had endorsed a car park.

The investigation continues.

Things to learn from this scam:

The short term program was too short term to allow the admin to do any investing of any kind. No one can turn around a profit in that kind of time frame.

Never take DD verified claims to be the be all and end all of your own DD, look at the big picture.

Don’t be overcome with emotion.

Don’t be afraid to lose out in the short term, otherwise you could pay for it in the long term

Just because a program has no referral program and doesn’t advertise, doesn’t mean it’s not a scam.

Case Study #6: EIC - Easy Investors Conned

European Investment Club was the usual run of the mill program. It offered a standard daily paying program and a 50% a month program. What made it more unique was the activeness and high profile of it’s administrators. Both were very active on the public forums, and joined in many discussions with other investors.

They were spammed several times and had their domain black listed, but they bounced right back, promising to go private in the near future.

They went private and increased all their rates of pay, going from 50% a month to 100% a month, something quite unheard of, even in HYIP world. It fooled a lot of investors, who wanted the get rich quick road. They invested a lot more.

Then, one day, the administrator announced that one of the investing partners was leaving, and the remaining partner had no way to invest the money.

The program is now in limbo, with no word from either admin, and no idea where it’s going. Some investors are hoping to get a refund, others have quite rightly cut their losses and moved on.

Things to learn from this scam:

1. • No effective DD had been done on this program, we knew nothing about the people that operated it.
2. • No indication of investments
3. • The high profile of the admins lured investors into a false sense of security.
4. • The sudden and unexpected program changes.

Case Study #7: Brideby - Do these things never die?

Brideby had it all, gorgeous website, amazing back end script (which is still very much in demand, if you know someone who has this script, let me know!), wonderful customer service and a semi-ok story. Basically, the veterans of this game knew that it was a ponzi, but recognized that it went above and beyond what normal ponzi’s offer. Newbies to this arena took what they saw at face value, an amazing opportunity offering you 2.1% daily on your investment.

Not only did Brideby pay out an unbelievable amount, they also had a referral whores dream affiliate program that offered to pay the investor 1.1% everyday on all his referrals spends. Everyone was promoting this program, TheBestHYIP.com and others had it rated as number one on the affiliate program alone, loads of people were promoting it in their signatures on forums, spamming. Everything to try and cash in on this cool 1.1% daily referral commission.

There have been other programs that offered daily referral commission before Brideby, but Brideby really kicked this trend off. It’s a ponzi admins dream because so many referral whores are desperate to cash in on other peoples mis-fortune. You can’t put a value on the amount of free advertising they are getting. And one thing a ponzi needs to do is advertise, advertise, advertise in order to get more members and pay out the older members.

Another ponzi defining feature it had was the auto-compounding feature that let you compound your money instead of withdrawing it. By allowing this, Brideby were effectively paying out more, but cutting the amount that they were actually paying out. Greed consumes every new investor (and some veteran members), once they have made spreadsheets of how much they could potentially earn, up the compounding rate goes.

Brideby first ran into server troubles around mid-November time. Suddenly the e-gold withdrawals stopped working (this was put down to the server troubles), then it was announced that all withdrawals would stop for a few weeks, and everyones account would be compounded at an increased rate. When withdrawals were allowed again, surprise, no one could withdraw, the coffers were empty. Now this bit is important:

What was happening was that Brideby had auto-withdrawals enabled. This meant that withdrawals could only be processed if there was e-Gold in the account. What people were finding was that they could spend hours trying to get a withdraw for just $0.50. This can be explained by the fact that people could only withdraw when other people (suckers?) were depositing. Trying to explain that to the die hard cult members of Brideby was a mission in itself!

Remember, when there are withdrawal problems, and things are running as smoothly as they did before, this is sure sign that there is trouble ahead. Get out what you can, cut your losses and run for the hills!

Case Study #8: Nova Lights - The Great Scam of 2003

Now, where to start on this little beauty?? Before it was known as Nova Lights, there were three separate programs called TMA, Star Game and Pegasus Investments.

TMA started around April 2002, and paid out around 10-15% a month. At this time in the arena, this was considered small and unworthy of note.

Star Game started around June 2002 and paid out 1% compounded per day (7 days a week).

Pegasus started in December 2002, and paid out 1.43% non-compounded per day (7 days a week).

Now, they all became very, very popular because their payments were on time, customer support was excellent, and more importantly, it was rumoured that people had actually met or spoken to the admins. As it turned out, these rumours were true, the admins were infact just a family living in a small town near Phoenix. But the rumour itself really fuelled the growth of the programs.

By Spring 2003, the trio (as they were called then) had established themselves without a doubt as the number one online investment program. There was absolutely nothing wrong with them, not a single payment had been missed since they started, no one had any complaints whatso ever, and more importantly, people had definitely met the owners in their own home where they were shown what they believed to be real trading.

In the summer of 2003, the programs had grown to such an extent, that they were to be grouped together under the banner Nova Lights, whilst remaining separate entities. Once this was done, it was announced that they would become private and they would have proper scripts made for all of them. True to their word, scripts were made (and very good scripts too), but…how private is private? When most HYIP’ers think of private, they think of passwords, closed membership and very secret. Nova Light’s definition of private was to put a disclaimer on the front page. So although it wasn’t actually a private program, it was termed a private program. The psychological impact this had on people seemed to be enormous, they were now investors of an ‘elusive’ private program (which just happened to still be open to new members). People started investing from their hearts and not their heads, homes were remortaged, cars sold, loans taken out, kids collage funds liquidated. A really clever trick of the admins was to introduce auto-compounding, thus effectively paying out a lot less everyday as people began the old ‘compound the crap out of it’ method of investing.

To illustrate just how big the program got, a new members group was set up with the aim of ‘buying an island’. The idea was that people would invest into a special pooled account (set up by the admins) and the proceeds from which, an island would be bought for all the members. As silly as this sounds, people were investing by the thousands. Everyone believed that this time next year, they would be relaxing in a tropical island that they owned. What actually happened? Read on…

The cult mentality of Nova Lights is probably the second biggest cult following I’ve seen online (for the number one cult, check out http://pipsinc.com forum). The admins themselves never posted. The entire operation was apparently run by a manager called Karin Hernandez. Karin had many moderators under her control, and she was the general manager for all the programs. The forum was a sickening display of arse licking, fawning, praising and rejoicing. All this lead newbie investors to believe all was well, and there was no need to question anything.

The real key to the success of Nova Lights was the act of keeping TMA, Star Game and Pegasus separate programs. The admins told investors that neither affected each other as their investments were different. TMA was supposed to be the secure program, where you should put your base capital. Star Game was a medium risk program, where you should start to fee your profits from TMA, and Pegasus was a high risk program which you should use profits from TMA and Star Game. By getting people to invest mostly into TMA and feed their profits into Pegasus, the admins undoubtedly prolonged the lifespan of Nova Lights. People actually believed that if Pegasus went down due to it’s high risk trades, TMA and Star Game would be OK. The more cynical amongst us knew that if one went down, they all went down.

So…what went wrong? Around Christmas 2003, withdrawals were suddenly taking a lot longer to be paid. At first it was blamed on script errors, then, surprisingly it was blamed on "a lack of e-gold in circulation". The more cynical investors promptly emailed all the major exchangers and asked if they were having a shortage of e-gold. The answer? Absolutely not.

Can you imagine the uproar on the Nova Lights forum? Someone had dared to question the word of their leader, how dare they? The fact that their leader had been caught out was irrelevant, someone had questioned him.

Pretty soon, some of the big hitters were getting rather worried over their investment situation. Combined, they had around $750k invested in the various Nova Lights programs. A meeting in Phoenix was arranged for the new year, and the owners were to answer for all

the problems. This meeting went smoothly, and the owners assured the investors that these were just temporary problems. Two weeks after this meeting though, it was obvious that these were not temporary problems.

Another meeting was arranged, and the owners claimed to have had several catastrophic trading losses which meant that the program had to be shut down and refunds issued. The big hitters, not buying this story decided to start an investigation. As with nearly all investor investigations, this proved to be fruitless, the money was obviously gone. There were still several cheerleaders in the forums, but now, a year later, even they must have been silenced.

A year on, and the owners are now in jail, they have had everything, house, cars, assets, pensions, cash taken from them by the authorities. When, if, they ever get out, they will be penniless.

Even after 18 months there has been no refunds from the authorities on any money received. In the unlikely case that there ever was any money recovered, investors are sure to only get a penny or two on the dollar in return.

The story of Nova Lights goes to show that in this arena, even the most trusted and respected programs can be (and in most cases, are) pure ponzi’s. Be careful!

Case Study #9: Foreign Fund - The Foreign Scam

Geez, where do I start with Foreign Fund? It started around September 2003, I quickly bashed it as a run of the mill Russian ponzi, and predicted that it would be gone by the new year. Aragh, to my dismay, come January it was still here and still paying.

However, their joint venture with an offshore bank never really materialized. They were supposed to be merging together, using the banks software and client base with Foreign Funds expertise in investing.

Funnily enough, when they announced the merger date, it actually occurred, kinda, in a funny sort of way. What followed was probably one of the longest drawn out deaths of a HYIP that has ever been. From the time of the ‘merger’ in April 2004 to the arrest of the owners in October 2004, there were problems, excuses, change overs, change of management, every excuse in the ponzi admins book of scams was used.

Accounts were originally supposed to be transferred from the foriegnfund.com script to the ff-bank.com script. It was soon discovered (after about a month of complaining) that although the e-gold deposits worked flawlessly, the withdrawals didn’t (which meant that you could put all the money you wanted into the program, but you couldn’t withdraw it. Instead of fixing the initial problem, they decided to transfer everyone over to the ff-bank.NET script, which they said was going to be reserved for the larger investors.

Lo and behold, the withdrawals didn’t work with this ‘new’ script either, however, once again, the deposits were working fine.

If you have very little experience of HYIP’s, you would not believe the shear amount of support ForeignFund was receiving during this change over period. The optimist amongst us would say that this was because the program was doing everything it possibly could to turn the program around for the investors, and they in turn were supporting the program by staying positive. The cynics amongst us would say the happy clappy attitude in the forum was largely because the forum moderators were deleting or editing the negative posts about the program.

At one point, even the classic excuse of, we’re getting debit card purchased, once they are ready, you can buy the debit card and withdraw all your money straight away. Again, you wouldn’t believe

how many people paid for the non-existant debit cards. They were all just so caught up in the program, believed so much and with all their hearts that this was the real thing.

By September 2004, so many people had complained to the US authorities, that there was no doubt that it was only a matter of time before the owners of the scam (if they lived in America) would be caught and put on trial.

That day came in late October 2004. It was announced that 2 men who ran a fraud website called Foreign Fund had been arrested in Pennsylvania.

Case Study #10: S&S Investments - 1000 posts = $500k!!!

S&S Investments is an interesting program because it was operated by a ‘well known’ person in the HYIP arena. I use the quote marks, because this person was not well known at all, infact he was very anonymous. No one knew his name, other than his nickname he used to post with, Sceptre. He used anonymous proxies, he was very well hidden. Yet because he had over 1000 posts on TalkGold, he earned a kind of pseudo-trust that people get from being very visible and always online.

Sceptre started off with a small little program that promised to pay back a large amount after a few days. It soon grew to become very, very popular, and it was not long before he upgraded to a fully automated script.

Sceptre wouldn’t tell people how he made the money, he just said that was his little secret. Virtually everyone invested into S&S Investments based on his post count on TalkGold. "He’s made a lot of posts on TalkGold, therefore he must be honest" seemed to be the general opinion of the investors.

S&S Investments went for sometime before cracks started to appear. First the website went offline, then was back again, but withdrawals weren’t being honoured, then the site went offline again. Finally, Sceptre made an announcement that S&S Investments were closed and refunds were to promised.

For a while, refunds did proceed, but then things started to dry up. Since the summer, no more refunds have been processed.

Hey, just because someone has thousands of posts on a forum, doesn’t mean he’s a trustworthy guy. Use your head, look at what the whole program is offering.

Case Study #11: FLO [Free Land Opps] – The Great Scam Of 2004

This probably has to be one of my favorite scams of all time. This program launched with a huge bang, blanket advertising virtually everywhere. Banners, emails, forum posts, everyone was beginning to talk about it. The website was great, the website security was top notch, the customer support was beyond compare, basically, it had it all. Except that is, believable interest payments. 110% for a week, up to 190% for a month, payments were made 7 days a week (yes, even when the markets were closed!).

This was very much a program for the newbies, something that would "shock and awe" them. People with more experience, or those that preferred to let their brain do their thinking rather than their heart cut through all the crap that was being touted and saw it for what it really was, a very eloquent, elaborate ponzi that was going to draw the punters in by the thousands, and the money by the hundred of thousands. Depending on where their morals and ethics lied, they then proceeded to warn people away from the program or fleece it for everything that it was worth.

The real key to the short-lived success of FLO was the employment of moderators that manned the live voice chat room and forums 24 hours a day. They were on hand to answer all questions that the ‘investors’ had. The owner of the program, a gentleman called ‘Xavier’ (someone who obviously though that the name sounded mysterious and cool at the time) conducted live voice chat sessions on a daily basis where people could ask any question they wanted. Well, that was what was advertised anyway. Whenever anyone asked difficult or cutting questions, they were booted from the chat room for ‘trouble making and soothsaying’. The entire forum was a censored environment, if someone disagreed with what the establishment said, then they were labeled as a trouble maker or soothsayer. A real sense of them versus us mentality was established. The newbies and the weak minded fell for it hook, line and sinker.

By creating the them versus us mentality, hushing up and mocking of people who disagreed, FLO was able to create bigger and more elaborate lies, safe in the knowledge that 99% of the investors were letting greed blind them into stupidity.

Cracks first started to appear in FLO’s setup when various e-currencies started to drop them or close their accounts. Surprisingly, e-Gold was first, then e-Bullion, followed by VirtualGold (who FLO were touting as the next big thing only weeks before). Finally they were left with just EvoCash, on the basis that all the other e-currency providers were not able to cope with the high volume of money

coming into and out of the program (again, a them v us theme). Withdrawals, which were often processed the same day in the beginning were starting to take longer and longer to process. FLO’s answer for this was that they were preparing for the private program, and all the withdrawal requests were slowing them down.

One of FLO’s greatest (or most low) moments was when they announced plans for the private program. They didn’t want ‘unsavvy’ or non-serious investors, so there was going to be a $1000 minimum to get into the private program. Since most people invest a maximum of $100, this was going to pose something of a problem, unless they put more money into the program. Since FLO had created such a cult mentality on the forum, for most, putting more money into the program to have the opportunity to get into the private program was a no-brainer – they couldn’t exchange the money fast enough.

Then disaster struck…well, a very well planned ruse. A fake FLO website was sent to thousands of FLO investors by email. Apparently this website contained a Trojan which was designed to capture all their FLO login details. Strangely, there was no report of anyone actually having this download on their computer, however, according to God, err, I mean Xavier, too many people’s accounts had been compromised (remember, no one knew of anyone who actually had this Trojan on their computers), and this was affecting the withdrawal process, thus putting back the cut off date for the private program.

This sign of trouble behind the scenes should have been a wake up call to even the most hardcore of FLO supporters to start pulling all the money that they could. But no, Xavier said that everything was alright, therefore everything was alright, because Xavier wouldn’t lie to us. I think that if Xavier had said that he could make water flow uphill, they’d have believed him.

Then there was a newsletter that informed investors that the US ‘ABC’s were on their case and had confiscated one of their US servers, but it was alright, because no information was held on that server. Xavier was hailed a hero and a savior (maybe that’s why he called himself Xavier – Xavier the Savior) for foiling the authorities attempts to shut his program down (a them versus us theme again).

The final straw came when EvoCash, the only e-currency that they were still able to use, announced that they were freezing all FLO’s money (FLO said it was around $2m, EvoCash refused to comment but said that it was no where near this much) unless Xavier could provide sufficient ID to prove who he was. This was completely appropriate because EvoCash’s own terms and conditions state that proof of ID may be required in some cases, if ID cannot be provided, then the funds would be returned to the owner and the account will be closed.

Of course, this had the FLO admin and investors up in arms, suddenly EvoCash had backstabbed them, and they were to blame for all FLO’s problems (them versus us). EvoCash was evil and everyone should avoid them at all costs. Suddenly, e-Gold was back in favour again, but that didn’t matter, because there were no more withdrawals processed.

It was then (predictably) announced that there would be no more withdrawals, and the FLO program in it’s current state would be shut down. However, everyones deposits will be compounded at the rate of 190% per month until the new private program opens.

Well, you can probably guess that the private program launch date has been and gone several times. Each time something crops up that requires the date to be pushed back further and further. Cult members still believe, though some are finally cottening on to the fact that FLO is, and was from the start, one big giant scam that made some people very rich, and most people very poor.

Case Study #12: WeeklyGold - Would the real Mario Degryse please stand up?

Ah, Mario Degryse. At one time, he was counted as one of my closest, trusted online friends. But then again, at one time, he was the most trusted individual in the HYIP arena.

Until January 2003, Mario Degryse was a relatively unknown investor in the HYIP arena. Then, he and 2 others formed a network of websites including forums, HYIP’s, rating sites, HYIP scripts and e-gold mass pay sites. Virtually overnight, this network became the biggest and most successful in the HYIP arena.

Mario passed himself off as a millionaire playboy living in Belgium. He claimed to be using his lucrative connections to support WeeklyGold.com, his HYIP and his ‘baby’. He was very active online, and a hater of scams. People began to trust his opinion, and listen to him when he spoke. He often carried out investigations, and became privy to a lot of ‘inside’ information.

I actually got to meet Mario Degryse several times in London. Each time he had something new to present, always going to some private bank in the City or finalizing contracts. He was also not shy about flashing his cash, often showing me just how many notes he had stuffed into his wallet. He liked his drink, and was probably more of an alcoholic than I am!

He always had plans for WeeklyGold, everytime he had something new to present to me, which I found great. To be honest, I was quite awed by this guy.

Mario’s major downfall came around the time of the demise of Nova Lights. He was one of the big hitters that stood to lose hundreds of thousands of dollars if they closed. He saw himself as the saviour of the HYIP’ers, going to speak reason into the owners of the biggest HYIP at the time to try and get everyones money back.

What actually happened degraded into a big cat fight between two of the big hitters, both accusing each other of back stabbing, slagging the other one off, and just general nastiness.

Around the same time, WeeklyGold, Mario’s personal program also experienced payment problems. Once Nova Lights had closed, WeeklyGold made no more payments. It became very obvious that Mario was simply piggy backing WeeklyGold on the top of Nova Lights, paying out about ½ what he earned, and pocketing the rest. No wonder he always flashed the cash and could afford expensive items.

Mario promised refunds, but that was about the last time anyone heard from him. It later emerged that Mario was a compulsive liar and had a bi-polar personality. One of the biggest names in HYIP turned out to be just a common scammer.

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