Introduction to e-currencies

What are e-currencies?
*e-Currencies are a digital currency that you can use on the internet to buy and sell goods, services and products. It is exactly the same as normal money, but in a digital form. The most popular form of e-Currency is e-gold
e-Gold has been around since 1996. All funds are 100% backed by real gold stored at various high security vaults around the world. That means that for every cent you have in your account, there is the physical gold equivalent in a vault. e-Gold is denominated in Grams. You have so many grams of gold in your account. How much this works out to be in US Dollars, Great British Pound or the Australian Dollar depends on the current value of gold. You can find out the price of gold at http://www.kitco.com

Because the price of gold fluctuates during the week, the value of the gold you have in your account can and will change (more noticeable when you have $100 plus), but the amount of gold you have will not change. You will see how world events affect the price of gold. Although e-Gold is the monopoly of e-Currencies, (and the favourite of the ponzi admins) there are many others out there. Some are even better than e-Gold, but for one reason or another, haven’t become as successful.

Here is a list of some other popular e-Currencies.

*http://www.e-gold.com

*http://www.c-gold.com

*http//www.goldmoney.com

*http://www.libertyreserve.com

*http://www.phoenixdollar.com

*http://www.Pecunix.com

*http://www.paypal.com

*http://www.moneybookers.com




Funding your e-Currency account

Funding your e-Currency account is very easy. You can use a bank wire, money order, use your credit card or send a cheque (check). Your account will usually be funded within 48 hours. Choosing the right exchanger is crucial as there are many scams out there. Recommended exchangers are:

*http://www.LondonGoldExchange.com

*http://www.pinoygoldexchange.net

*http://www.icegold.com

*http://www.goldpouchexpress.com

*http://www.goldex.net

*http://www.anygoldnow.com

*http://www.omnipay.com

*http://www.eurogoldsales.com

*http://www.cambist.net

You should also be very careful of any exchanges involving PayPal and MoneyBookers. In fact, I would say don’t do any exchanges with them. Neither of them will allow you to exchange to e-Gold, and if they find out that you have, then they will close your account and you may not be refunded.

The other danger with PayPal is that transactions are easily reversible. So if someone buys e-gold from you, and they send you PayPal, once you have sent them the e-Gold they may reverse the transaction. Advantages of e-Currencies

e-Currencies have many advantages over normal currencies on the internet. The biggest being the anonymity it provides over any other currency because all you are is a number. You don’t have to provide any contact details if you don’t want. Note that it is probably in your best interests to provide some means of contact, if you get locked out of your account, then most e-currencies will contact you via telephone or snail mail.

I update my site at least once a week (usually several times a week). In fact, I am currently working on an incredible new opportunity, as well as expanding on the current information, so check back often!.

Also, there become legal issues if you start using a real currency to do your investing.
e-Currencies are simple and easy to use, whilst providing the anonymity that many people require on the internet. Some governments are greatly concerned about this (such as the Australian government) and have restricted or banned many of the Australian exchangers, requiring them to apply for a license to conduct such exchanges.

There is also a growing concern over the new Patriot Act that America has passed, since a small part of this Act seems to target e-currencies. In the future, it may be a requirement to submit several forms of ID before you can open an account. If this happens, wave goodbye to the HYIP arena.

www.e-gold.com.

Real World Offline HYIP Investments

Offline, there are thousands of high yield, high risk funds that are 100% legal and legitimate. Most of them are located in the UK, Luxemburg or USA and licensed by the appropriate regulatory body (FSA in the UK, SEC in the USA). They use investment vehicles such as Hedge Funds, Bonds, Stock Trading, Forex, Commodities, Futures and Property to generate the returns.

Returns from these legitimate HYIPs are variable and range from 5% to 120% per annum. These figures are averages and some funds have returned 100% per annum or more for the past 10 years.

These funds have some strict entry requirements, most, if not all of them require you to be offshore and investing from an offshore location. The minimums range from £1,000 upto £1,000,000 (UK Sterling currency is used because a majority of these funds are located in the UK). To set yourself up offshore will cost between $2,500 and $5,000. If this kind of investment interests you, then we highly recommend that you read the publications from Trident Press. They are written by an Australian accountant and investor and are updated periodically. Many of these companies have track records of returning double figure profits for the past 10 years or more.

What kind of returns do these investments produce?

One common reason why newbie investors lose so much money is because they are ignorant to the investment vehicles these programs claim to use.

Lets look at some realistic returns that you can expect from common investment vehicles that HYIP’s claim to use.

Forex

This is by far the most commonly used word in this arena after HYIP, scam and ponzi. Forex is an acronym for Foreign Exchange and it is the trading of one currency for another. For example you can trade the Great British Pound against the United States Dollar. If you have ever gone on holiday abroad and had to exchange your local currency for a foreign currency, then you have indirectly been participating in Forex. Over the past few years, the internet has allowed the every day person to trade on the forex markets.

The rise in retail forex (where the everyday person can invest) and rise in popularity of HYIP’s has an almost direct correlation.

Forex is often touted as the holy grail of HYIP’s, and amazing claims on the returns that this medium can return are littered around HYIPs. This mis-information and a lack of understanding by common investors is a gold mine for HYIP Scammers as they can fabricate fantastic returns based on this little understood investment vehicle.

But here is a key fact that should shock you enough to sit up and listen. In a recent survey by the largest forex site on the internet EASY FOREX WEBSITE it was established that an astonishing 95% of people lost money in forex and the remaining 5% made 95% of the profits. This means that nearly everyone that trades the forex markets lose money and are making astronomical losses.

The actual amount you can make or lose in forex depends on how much risk you want to take. If you want to take a massive risk and use all of your capital in one go, then doubling your money in a day is possible, but the most likely outcome is that you will lose your money.

So to reduce your risk, you reduce the amount of capital you use per trade, and as this risk decreases, so your returns decrease.

A very talented, professional and disciplined Forex trader can return an average of 5-15% a month on a consistent basis. There will be months where they return a negative figure and there will be months where they return sky high figures of 30% or more. But if a trader can average 5-15% returns per month for more than a year, they are either the luckiest or one of the best traders in the world.

The above paragraph is very important to your understanding of online HYIP’s. Read it and remember it! A very good Forex trader can return 5-15% per month. Anything more is fantasy or they are using extreme amounts of risk (beyond trading, and into pure gambling).

Let’s also look at the logistics of a HYIP that is paying 1% daily and claims to be backed up by FOREX. Firstly they have to transfer the e-Gold into their bank account which takes 2-5 days and costs 3%. Then they have to transfer the money from their bank account and into their trading account which takes another 2-5 days and can cost 1%. They then need to trade the money, make a profit, withdraw the funds to their bank account (2-5 days and costing 1%), then transfer the money to their e-gold account (2-5 days and costing 3%). So potentially that’s 4 weeks where the money is not being traded, yet the program will have been paying you 1% daily for that time.

Stock Trading

Stock trading, or day trading is very much like Forex trading, but the markets are not as volatile and there are thousands of stocks to choose from.

Sidebar: A stock is a company that is listed on an stock exchange such as the FTSE or Nasdaq. A share is a portion of that stock. So if you buy a share, you are buying a share in a stock.

Day trading is just as difficult as forex trading. Infact if you make less than 2% on a trade, then after fees it is likely that you will have made a loss or broken even.

If you want to find out more about day trading, check out this site here which offers you the chance to follow the traders signals and earn 2-5% per trading day.

Sports Arbitrage

Sporting Arbitrage is a unique method of gambling that is guaranteed to produce a profit whatever the outcome of the event is. The best example to use here is tennis. There can only be one winner and one loser in a game of tennis.

Imagine Bookie 1 rated Player A above Player B and so gave odds of 1/3 of Player A winning. Bookie 2 rated Player B above Player A so they give odds of ½ on Player B winning.

Now, if you place a bet of $200 on Player A, and bet $300 on Player B, you stand to win $600 which ever player wins. Since you bet a total of $500, you’ve just made a $100 profit (20%). It doesn’t matter who wins the match, you’ve made a guaranteed profit.

Now the above example is an extreme situation which will rarely happen. Most ‘arbs’ will return between 1-5% maximum.

Before you rush off to read more about Sports Arbitrage and think that this could be the answer to all your dreams, consider this: Bookies are there to make money, they certainly don’t like losing money! If a bookie suspects you of using Arbitrage to profit from them, they are likely to close your account.

The next thing you need to consider is that you need quite a large capital to start this method of making money. You need to have a good $500 or more in at least 10 online bookies. Otherwise the percentages that you are making means the returns are insignificant. However, there is also an upper limit to the amount of capital that you can use. Anything above $20,000 and the amount you make relative to your investment size reduces. This is because many bookies will have a maximum amount you can bet on the smaller games where the arbs occur most frequently.

It is highly unlikely that an arb opportunity will come up on a major game such as Superbowl, where you can bet thousands and make a ton of money.

Be wary of HYIP’s that claim to be investing in sports arbitrage. Although the profit is guaranteed, there is a limit to how much capital they need.

If you want to learn more about Sports Arbitrage, then we suggest that you check out Zero Risk Arbitrage which gives you a more indepth guide to arbitrage and even sends you arb signals.

What is a Ponzi?

* A Ponzi is named after the man who invented it, Charles Ponzi. He put an advert in a national paper saying that he could earn people several times what they sent him in a short period of time by trading stamps. People were completely fooled by this and sent him their life savings. Initially he did do a bit of trading, but quickly he started using new spends that were coming in to pay off the older spends. Eventually he was doing no trading whatsoever and purely.

using new spends to pay the old spends. Finally, it all collapsed, Charles Ponzi ran away a millionaire (in the 1920’s that was an awful lot of money) and left thousands of people financially ruined for life. He was later caught and jailed and new laws were introduced to make this ‘Ponzi’ scheme illegal. Since then, Ponzi’s have become illegal in every single country, no exceptions.

You can read all about Charles Ponzi at: Charles Ponzi Website


In the online HYIP arena, many programs that claim to be investing and doing real trades are infact just Ponzi’s, dressed up to look like a HYIP. They might have slick and fancy websites, with detailed information on how they do their trades, but underneath it all, they rely on new spends to pay out the older spends.

There is no official figure for the ratio of actual HYIP’s compared to HYIP’s that are actually ponzi’s. Estimates have put it at around 99% ponzi’s, 1% HYIP. A rule of thumb would be to assume the program is a ponzi and ‘invest’ your money accordingly, or not at all

Here are some tell tale signs of a ponzi (some or all of them apply):

*It offers a very high daily payout, anything above 1% per day or 20% or more a month can safely be assumed to not be a real HYIP with real investments.

*It has a low minimum. Remember in the first section about how I mentioned that real HYIP’s have such high minimums? What is the chance of a program being a HYIP if the minimum investment is just $1?.

*There are no details anywhere on the site explaining how they make their money (just mentioning that they trade in FOREX and various other funds and activities is not an explanation of how they make their money).

*The admin appears to ‘live’ on the forum, answering questions and comments straight away. You might think that this is good thing, but when is he supposed to be doing the trades?.

*If it’s a daily payer that pays on the weekends too. How does the admin generate funds if all the markets are closed?.

*If there is a large referral commission 10% plus (indication that they need people to promote to get new members)

*After 5000 members they still have a referral commission and they are still open to new members.

There’s no way to be certain that a program is a Ponzi or HYIP, some of the guidelines above may be true for some real HYIP’s. After several months in the arena though, you’ll begin to get a feeling for what’s real and what’s not. If you assume everything is a ponzi (no matter how pretty it’s been dressed up), then you should be on the right path.

Having been involved in this arena for such a long time, I’ve heard things and been told things that makes this HYIP arena much more sinister. From gangs of people running hordes of ponzi’s, to competitors paying hackers to hack sites or DDoS them.

The thing with a Ponzi, is that if you get in at the very start of the program, make a few referrals, chances are that you’ll make some money before it closes. Some people find this ethically and morally OK, because they are of the opinion that everyone should do their due diligence before investing, and that these people should understand the risk and accept the consequences.

Other people believe that investing into a program knowing full well that it’s a ponzi and using new members spends (new members who may never have heard of a ponzi before and think they’ve stumbled upon the holy grail of investments) to pay out older spends is not acceptable under any circumstances.

One thing that you should be aware of is that Ponzis pop up all the time, HYIP’s are very rare (some may say mystical).

What are Gold Games?

* Gold games are like miniature ponzi’s. Usually hosted on free servers, they can last anything from a day to several weeks. The difference between these and a Ponzi is that they actually make it known that they are a Ponzi, that they fully rely on new spends to pay the old spends. They’re called "games" but they are infact ponzi’s, so don’t be fooled!

They come in two forms:

ASAP Game: Stands for As Soon As Possible Game. This basically gives you back anything from 105% to 300% of your spend in one lump sum as soon as possible. They last for about a week at the most. The smaller the return, the longer they will last.

Daily payments: Earn anything up to 80% per day for a set number of days. Usually a re-spend is required before you actually go into profit. Depending on how good the admin is, they can last anything up to 4 weeks.

The success of these games depends entirely on the admins experience and how honest they are. There are several admins who periodically run gold games and people who have got to know them know that they can be assured of making money if they get in at the start.

Timing is everything with these games. Knowing when to get in and out will dictate how much money you can make. It is entirely possible to earn a decent income from Gold Games, assuming that you only put money in to honest programs.

However, even if the game is more than a day old, don't enter. Monitor the GOLD GAMES listing sites daily and find your games there.

There have been a couple of ‘games’ in the history of HYIP that have been rather exceptional, and outperformed all expectations. One was called Back On Track – The Game, and paid out differing amounts depending on what day you spent on. Back On Track lasted over 2 years before it finally collapsed, and was considered a small success story of the HYIP ARENA.

Recently there has been a massive decline in the popularity of gold games, largely because players are realizing that there are always losers, and shock horror, it could be them!

BOM Betting

* BOM Betting sites are programs that will take your money, put it into www.betonmarkets.com that allows you to make forex/stocks/indices market bets, and place a bet on the market. They will then post this bet in a public forum, so that you can see whether or not you will win or lose when the time comes.

These are very transparent programs, and probably the closest to an honest HYIP that you are likely to find. They post their bets before it expires (which most programs absolutely do not do), so that they cannot make up their results.

Obviously the performance of these programs varies from program to program, the aim is to find a program that has a 70%+ winning ratio. Once the winning days start to dwindle, it’s time to find another program.

The key to winning with these programs is to constantly monitor the performances from several programs, are some days better than others to invest on? Does the trader have performance cycles? There are lots of things you need to consider, and careful monitoring will ensure that your money is as safe as possible.

If a program does have a 70%+ winning ratio, instead of putting all your money in at once, try and divide it so that you have enough to put in on a daily basis. Thus if there is a losing day, instead of losing all your money, you still have most of it left, ready to play another day.

BOM Betting programs are constantly popping up and closing down. Most are run via Yahoo groups.



Auto Surfers

Autosurfers are quite a new breed of programs, and are essentially a hybrid of traffic surfing programs and HYIP’s. A few years ago, budding webmasters looking to promote their own site on the cheap would signup to traffic surfing programs, and for every page that they viewed, they would earn one page view for their own website.

This idea progressed so that you could earn money from surfing all the sites, and you could earn more money by putting more money in your account. As long as you surfed your required number of pages for the day, then you earned interest on your deposit.

When you are surfing, you must view each page for a set amount of time, usually 20-30 seconds. When these programs first appeared, you would have to keep the surfing window open and manually click to the next page. However soon this became automatic, so you could minimize the window and leave your computer running overnight automatically surfing through all the pages. Hence the term ‘Auto Surfer’ was coined.

Auto Surfers seem to have gained a bit of a reputation for being somehow ‘safer’ than normal HYIP’s. This is infact not true, as most of them are still operating on the same ponzi style formula that most of the HYIP’s operate on. They need new members investing new money in order to pay out the older investors. Some programs admit this upfront, others use the standard forex and various funds and activities story that is becoming tiresome and old.

The reason they are considered to be safer than HYIP’s is because at the moment they are not quite as saturated – there are less autosurfers than HYIPs. With HYIP’s the average investor (one that hasn’t read HYIP101) has thousands of programs to choose from, 99% of which will not make more than a handful of people money. With autosurfers, you have fewer programs to choose from; therefore the amount of money each average autosurfer takes in is greater than the average HYIP. Hence it can last much longer.

However, as with HYIP’s, this state of affairs will not continue, and already there are signs that the industry is getting saturated, this is apparent as higher paying programs are launched in order to attract more investors money.

Cyclers and Doublers

These types programs programs must surely win the award for shortest ever industry lifespan. Cyclers basically take your money, give you some frills (such as advertising in a PPC search engine, banner impressions, advertising), and enter your investment into a linear matrix. A linear matrix is one where everyone who signs up after you goes under you.

The person at the top of the matrix is said to ‘cycle’ once there is enough money to pay him his return. Most of the time the only place this money comes from is the new deposits from members. When the member at the top of the matrix cycles, everyone in the matrix moves up one position.

In the beginning of a new program, if it has had a huge pre-launch and has gained several thousand members before it actually launches, then you can expect people to ‘cycle’ (reach the top of the matrix and cash out) in days or even hours. But as the days go on, then the time to cycle takes weeks and months. Eventually the whole process stalls and the Cycler is said to have stagnated.

The reason that a cycler stagnates is partly mathematics and partly psychological. When people see the cycler flying along, cycling in days or weeks, then they’ll happily throw in as much as they can, confident that they can cycle within a few weeks, often earning 150% or more in that time.

Once the cycle time increases to months, a psychological barrier sets in of "will I get this money back?" As soon as members start thinking this, then spends will decrease and eventually the cycler will stall and stagnate. The members that hesitated about spending will congratulate themselves on shrewd investing by not putting any more money into the cycler, perhaps quite oblivious to the fact that it was people like them that caused the cycler to stall and stagnate in the first place!.

The inherent problem with most cycler programs is that they cycle too quickly in the opening few months. As soon as it starts to slow, then unless there is an external income fueling the cycling process (which there very rarely ever is), then people will stop spending.

Maybe if the program owners created a minimum cycle time instead of a maximum cycle time which they all seem to go for, then cyclers could last a whole lot longer.

However, at the end of the day, cyclers, doublers, whatever you want to call them are simple ponzi’s. They need new money and members to continue to pay off the member at the top of the matrix.

Sure signs that a cycler is going to fail include a slowing of cycle time, the cycle time goes beyond the ‘maximum’ cycle time, the maximum amount you can deposit is increased and people are cycling as normal, but withdrawal requests are taking longer and longer to process.

If you have to put money into cyclers, then the best thing to do is to wait for a program to come along that is doing a massive pre-launch campaign. Once their cycler begins, put as much money in as possible at the very start. Let it cycle 2-3 times. If the cycle time is still less than a week by this stage, risk putting in half your earnings again. Don’t stay with a cycler for more than a month.

There are many large cyclers on the internet, some have lasted for over 2 years, but eventually even these collapse.

Bubble Games

Bubble games are similar to cyclers and doublers, but they are not as big as the aforementioned programs. They have tiny minimums, sometimes $0.01 and smaller maximums, $1.00 or slightly larger.

They work on the exact same principle as the larger cyclers. You buy a position at the bottom, then as more people buy positions and the person in the top position earns their money, your position moves up. When the person at the top has earned their money, it is said that their bubble has burst.

In exchange for buying a position (or bubble), you get to add your banner or link to the site, which will (hopefully) move up as more people join.

Bubble games can be a good way to get a lot of exposure for your program relatively cheaply. The people visiting the bubble site are obviously looking to spend a bit of money, and if you occupy 20 banner positions then they can’t fail to notice your advertising message.

DXInOne

Although not a type of program, the set up and the way this site works is so unique that it fits under no other category of HYIP’s.

This site has had more than it’s fair share of questions on the HYIP101 forum from members asking what it is and is it worth putting money into it. After careful research our answer is a definitive ‘NO’, and we have put the reason for our answer here.

There are basically two ways to earn money in DXInOne. The first is the simplest one, you buy ‘shares’ in different countries and each week these shares increase in price, thus your portfolio value increases. For the past 3 years the portfolio has been increasing at a rate of around 1-3% weekly. However, there are so many fees and payments involved, that the amount you actually get is a lot less.

They claim that the profits from the portfolio are derived from all the fees that the system charges. However, all of the fees are paid in the DXInOne internal e-currency, so there is nothing to stop them creating as many numbers on the screen as they want.

In order to get the money out that you have earned you must complete an Out-Exchange. Now this is the second way you can earn money from the system: complete exchanges for members.

Unlike PayPal and other major e-currencies, you cannot withdraw directly from the system, that is, you can’t ask the company to debit your account and have them send you a bank wire. Instead the company relies on members to complete the exchanges. In essence, the money DXInOne is paying you for the portfolio is being paid for by the member completing the out-exchange for you.

Since more and more people are earning large sums of money in their portfolio, they have to rely on other members having equal amounts of money in other e-currencies such as e-Gold, IntGold and NetPay. The latter e-currencies are much more liquid than DXInOne, in that it’s easier to get the cold hard cash from them.

So with less people actually wanting DXInOne currency, and more people wanting to out-exchange their huge balances, the withdrawal process slows to a snail pace. In some cases it can take weeks to transfer $25, longer if the amount is more. And since DXInOne won’t send you the cash in your balance themselves, you have to rely on someone who wants your DXInOne currency more than a liquid currency like e-gold.

To sum up, DXInOne was once a great money earner, but now, despite a fantastic looking website and a mind boggling money making system, it’s heyday has been and gone. You’d be wise to leave it well alone otherwise you could spend weeks figuring out the system and hundreds of dollars could be wasted.

Introduction To High Yield Investment Program ( HYIP PROGRAM )

What is HYIP?

* HYIP stands for High Yield Investment Program. It is usually defined as any investment that brings in a higher rate of interest than your savings account, which at current interest rates is about 4% to 5% per annum (in the UK).

Legitimate HYI are usually based "offline" and are operated by registered companies. The minimums to get into these HYIP’s range from $500k to $10 million and upwards. They can return anything from 10% per annum to 100% per annum. They have very explicit risk disclosure documents that you must understand and agree to before they accept your money. In the real world, high yield means that there is a very real danger of losing all your money. You will not find any guarantees or promises anywhere.

HYIP’s generate their income in a variety of different ways. These include FOREX (see glossary for definition of FOREX), stock market trading, hedge funds, real estate trading, purchasing and reselling liquidated/surplus assets, arbitrage betting (see glossary), selling computer software, and many other methods.

Online HYIP’s are a completely different kettle of fish to offline HYIP’s. The differences are bullet pointed in the list below:

*The minimums are much lower, usually as low as $10 (or even $1!)

*They are less transparent than offline HYIP’s. 99% of the time you’ll have no real contact info on the owner of the program

*There is much more chance that the program owner will run off with your money than in legitimate offline HYIP’s

*The legality of these online programs is dubious to say the least. Are they a gamble (in which case they would be illegal in many countries)? Are they a private loan between you and another person (again, not entirely legal)? Or, are they a real investment – in which case the program should be a registered company paying taxes on all it’s earnings.

Another ‘grey’ area for online HYIP’s, especially for people in the US, is how do you report your earnings or losses on you tax form? This question has never been answered properly, and the best advice anyone can give you is that you should consult your tax advisor.

Online HYIP’s can generally be separated into 3 different categories; Daily, weekly and monthly. It basically refers to when you will receive your interest payments. From experience, I have found that a variable weekly or monthly returns are the safest to invest in, since the program is not forced to pay out a fixed amount, even if trading is bad.

Rarely will an online HYIP give specific details about the trades it conducts. Consequently, you’ll find this phrase used a lot "Our investments are backed up by FOREX trading, investing in stocks and various other funds and activities." It is very hard to tell whether a HYIP is actually doing real trades, but after reading through this guide, you should be able to make a more informed decision

sidebar: the majority of online HYIP’s do NO trading whatsoever).

Many online HYIP’s claim to be doing real trading, when infact they are merely using new spends to pay off old spends. This is called a Ponzi and you can read more about it in the next section of this ebook.

It is very, very easy for a person to setup a online HYIP. With advanced pre-made scripts available from abchyip.com and other software vendors, any person in the world can setup a hyip from as little as $150. I can guarantee you that very few of these mass-produced hyips are real and actually trading.

It’s a common mis-conception amongst online investors that all HYIP scams are run by Russian, Eastern European and other third world country people. Although these countries do have their fair share of scammers, the majority of scammers are US based, running off US servers.

The typical lifespan of a online HYIP can range from days to years. It largely depends on the payment plan that it is offering, and whether there is an external source of income. Below is a table showing the expected lifespan of a HYIP based on its payment plan. These figures are based on our own experience and are assuming that there is little or no external income source.

Of course, there are occasionally exceptions to this rule, but these are exceptional (not to mention rare) programs, but we’ll talk about identifying these programs later on in this ebook).

For Weekly and Monthly programs, you can generally add on a few months to the expected lifespan listed above. For a program to last longer than 1 year is very rare.

You should be able to see now that investing in online HYIP’s is far from secure and guaranteed. Under no circumstances should you be under the impression that this could be the answer to your financial dreams; You want to pay off your credit card bill? Get a better job. It’s harsh, but too many people have invested everything they have left in the world and been completely and utterly ruined financially.

HYIP tips when posting on a public forum

One problem that the internet has is that it joins together people from all over the world who have very different views, religions, opinions, aspirations and outlook on life. This can create tensions, anger and even resentment. Occasionally it can boil over and you will see personal attacks on people on virtually every forum that you visit.

Here are some tips when posting on a public forum (this is personal pet peeves and observations of what annoys people in general):

1. • When you make a post on a forum, don’t be cocky, arrogant, or a know all, people don’t like that
2. • Try and be slightly humble, and don’t ridicule another members’ opinion or post.
3. • Avoid getting involved with personal attacks on people.
4. • Don’t post ads for programs in any other folder other than the Advertising folder (most public forums will have an advertising folder). Be prepared for the program that you posted to be called a scam.
5. • It’ll take time to earn respect on a forum, for a few months you’ll just be another person.
6. • Use proper grammatical English. People will respect your opinion less if you use words like "cuz" "wanna" or other slang words. It might be quicker to type, but people will get annoyed very quickly. If English isn’t your native language, people will make allowances for this if let them know before hand. Try using the language translator on http://babelfish.altavista.com - Again, let people know that you are using a language translator
7. • Don’t WRITE ALL IN CAPITALS. In internet world this comes across as if you are shouting. It lacks effect, as does adding 3000 explanation marks (!) after each sentence.
8. • Don’t write long blocks of text without formatting it. Separate into paragraphs. If people see huge posts, generally they will scroll on past it. Short and to the point usually guarantees a better response.
9. • Remember to be polite, rudeness; swearing will not be tolerated by most forum members.

Remember that when you are writing to a program admin, you are writing to another human being who will have emotions and feelings. The tone that you take with your email will usually dictate how quickly and how helpful the admins response will be. If a program skips a payment for any particular day, send a polite email asking if there was any reason for this. In some cases you’ll find that the markets were closed that day, thus no money was made, or any number of other legitimate reasons.

Also, allow the owner time to reply. If you don’t receive a reply immediately, don’t post over every forum that you haven’t been paid – you could inadvertently help kill the program and you’ll never be paid. Give the owner 72 hours to reply, if they still haven’t replied by that time, check the programs forum to see if they are still active on there. You could even enquire to see if anyone else was not paid. What wouldn’t be helpful would be to shout (in capitals): SCAM!!!! NOT PAID!!!!

Glossary of Terms

The HYIP industry is filled with jargon that a newcomer may have absolutely no idea what a word means. Listed below are some of the more popular words, phrases and abbreviations in use today.

Arbitrage – A means of betting on all available options and guaranteeing a profit whatever the outcome

Compounding - Adding interest to your existing investment to earn more interest on both the investment and the interest added. It makes your investment size increase exponentially. Very powerful to a shrewd investor.

FOREX – Foreign Exchange (currency trading)

HYIP – High Yield Investment Program

IBC – International Business Corporation (the best HYIP’s have IBC’s)

Interest - Profits earned on your investment with a program

NASDAQ – The US blue chip stock market

Ref – Referral. You can sometimes earn extra money by referring your friends and family

ROI – Return On Investment

Conclusion

So in conclusion, there are probably far more honest ways to make money on the internet, but there are very few that can be quite as lucrative ☺

Investing in HYIP’s will take time and dedication; you must be prepared to lose your money in order to make money. This should be approached in a businesslike fashion, and all emotion to your money or the program should be removed.

You want to be looking at the programs that go above and beyond the call of duty when compared to the other ‘cookie cutter’ programs out there. These are the programs that last 3 months or more and can make you large amounts of profit.

Come and join us in our active members’ only forum, and start earning a real income today!

So there you have it, the definitive guide to online HYIP’s. Probably not the ebook you were expecting, but we sincerely hope that we’ve shattered a few misconceptions and covered many of the taboo areas which some veteran HYIP investors don’t want you to know.

If you have any questions on HYIP’s, please come and join us in our forum. We have a special folder for newbies to ask their questions in a friendly and informative atmosphere. No question is too stupid or silly, and you certainly won’t get flamed for asking questions.

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

PAGE 71

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.

Technorati Profile