Digital Money World

A3Union and Other Classic Multi Million Dollar Ponzi Scams pt1

by Mark on September 1st, 2007

A Ponzi scheme is a fraudulent investment operation that involves paying abnormally high returns (”profits”) to investors out of the money paid in by subsequent investors, rather than from net revenues generated by any real business. This type of scam is named after Charles Ponzi. wikipedia

About a month ago I asked a friend to name one of the more popular HYIPs on the Internet and he responded, “A3Union its a pure ponzi“. Shortly after looking over the A3Union web site, I mentioned it to several other friends and during that chat I called it a ponzi scam. Much to my surprise they said, “Prove it”!

I’m taking a closer look A3Union and some other popular Ponzi Scams I’ve seen in recent years, all of which used digital currency to rake in victim’s money.

From a document on the A3Union web site remarkably labeled an ‘Investment Statement and Prospectus‘ the operators now claim to have taken in over $3 million dollars from ‘investors’ and even more money is coming in each day funneled through e-gold, Pecunix and e-Bullion.

“A3Union Advisors continue to attract new funds under management. These have now passed the $3 million mark (up from $500,000 at December 2006).”

An HYIP can be considered a ‘ponzi’ if it is taking in more money from victims than the business is generating from any day to day operations. The new investors’ money pays off the original investors. Right now, A3Union old members are being paid with new member’s money. If the incoming flow of funds stopped today, no one would be paid essentially from today forward because the business does not generate any income. When the incoming flow of funds slows or stops, this signals the end.

A3Union is a shiny new Internet spin on the old classic 1920’s Ponzi scheme. Here are some other classic ponzi scams that financially raped a few hundred thousand ignorant people over the past few years.

OSGold

Section (1) The OSGold Ponzi went belly up mid 2002

OSGold, “….fueled by a mammoth ‘Ponzi’ scheme disguised as a guaranteed high-yield investment program” - OSGold investors say in court documents. CNET News.com

Investor Lawsuit, WA & NY State filed 4/05, “…boasted more than 60,000 accounts created by people drawn to promises of “high yield” investments that would provide guaranteed monthly returns of 30 percent to 45 percent…scheme bilked investors out of more than $250 million *zdnet

The Sales “Pitch” - OSSOPPS programs have began. 1st trades listed in members area now. Very impressed with the returns! They will have many trades and they will ALL BE GUARANTEED! Hundreds have joined already. *mail-archive.com/e-gold-list@talk.e-gold.com

The “Dream” - What is OSGold? OSGold is a product of One Groupe International, Inc. of Panama providing services you need and the protection you deserve safeguarding your financial assets offshore. Your OSGold dollar is 100% backed by gold. —From the original Osgold.com FAQ page *web.archive

The Company Line Lie - Company email - “While it is true that in the 1st days of OSGold’s opening, we were backed 100% by gold certificates, that is no longer true. We are, in fact, backed 150% of our deposits, with a breakdown as follows

–50% by gold certificates –50% by gold bars –50% by cash.

Your money is completely safe with us. One further note on gold certificates…while it is true that more gold certificates are issued than gold exists, everyone would have to cash them in all at once for it to be a problem…This is the reason we did not hesitate to purchase them for our own use. We will always do everything in our power to ensure the safety of our members deposits… Please feel free to copy my response to you, to the other posting you noted.
Thank you,”
Laurie Dyke
OSGold Operations Director (mail-archive.com/e-gold-list@talk.e-gold.com)

The “Reality” - Quote, “The Ponzi scheme gang has graduated to bigger and better things now! They moved up from running individual scams on e-gold — to a full blown *imaginary* metals backed e-currency called OSGold. If you check the SSL cert — they are in the USA,*offshore*? And there is NO gold backing the currency — at least I don’t see any proof of metals backing the system. However — I would bet the HYIppers will go there in droves, ya see, they don’t care about truth, only a promised return (imaginary or not)! Boy, if everyone thought e-biz was trouble — wait until this bubble (OS) explodes.” *factfindings

12DailyPro

Section (2) 12DailyPro and Lifeclicks were placed under the control of Thomas F. Lennon, a United States District Court appointed Receiver, at the request of the Securities and Exchange Commission, on March 1, 2006.

12DailyPro, “….Earn 12% per day for 12 days from your account by just surfing 5 minutes”

U.S. Securities and Exchange Commission, “…raised more than $50 million from more than 340,000 investors worldwide by convincing visitors to the web site that they could earn a 44% return on their investments in 12 days by looking at Internet advertisements.”

This matter involves the fraudulent, unregistered offering of investment contracts constituting securities in a Ponzi scheme offered and sold via the Internet.

The Sales “Pitch” - Press Release, The success of 12DailyPro has been spread around the globe by thousands of testimonials from happy paid members. These people have been earning 144% every 12 days from their accounts. Earnings from $8.64 to $8,640 per month based on their account investment have been changing lot of people’s life around the world. You may ask how 12DailyPro works? 12DailyPro offers a very simple and smart autosurfing system. Only requirement is that you need to surf 5 minutes (12 sites) daily to earn 12% per day for 12days. Some people may have hard time to believe 12% return per day and 144% return for 12days. Some people may think that 12DailyPro sounds like a ponzi scam. If you are experienced forex traders, you will know “pips” capture. If they did so, paying 12% every day to pro member is a piece of cake for them. The reason is because they still could earn more than 50% by leveraging funds from pro members. PRweb Press Release December 22, 2005

“Since I signed up I have met two people who have made about $40,000 since November,” Josh Vancott, a senior at the Marriott School of Business from Orem, UT *newsnet

The “Dream” - 12daily Pro: Member upgrade earnings are financed by multiple income streams including advertising, and off-site investments

One student [true believer] , in a letter to Daily Universe reporter Jenny Davis, asked if she had ever considered the 44 percent return rate was sheer genius and said the reason the company doesn’t give away information is because of the intelligent business plan……people defended 12daily Pro in e-mails, citing as proof of its legitimacy its perfect track record of making payment…the fact that some people turn equally impressive profits in real estate and on the stock market….has heard that 12daily Pro receives income from automated currency arbitrage, which he says lines up buyers with sellers and makes digital transactions between markets around the world…. also said money comes from real estate. “Another thing they do is flip houses,” Nelson said. “In North Carolina they bought a whole block and held it for six days. They dumped millions into outside cosmetic work and made a killing.” [Lee Nelson of Tampa, Fla.]*newsnet

The Company Line Lie - 12daily Pro members sign up online and put money in an account - from $6 to $6,000. Then, every day for 12 days, they log in and run a program that automatically surfs through several Web sites, spending 25 seconds on each. At the end of 12 days, the user is done and is promised 44 percent returns on the initial amount contributed….Members receive a 12 percent commission on users referred by them.*newsnet

The “Reality” - Undisclosed to investors, the Defendants are operating 12daily Pro as almost a pure Ponzi scheme–at least 95% of the funds 12daily Pro uses to pay returns to upgraded member come from new investments in the form of new or existing members’ upgrade fees. …that Defendant will have to obtain an ever-increasing number of upgraded members, or investors, to continue to pay the returns promised to current investors. The Defendants have made material misrepresentations and omissions in offering and selling the 12daily Pro investment program. In fact, 12daily Pro’s offer and sale of membership units constitutes the unregistered offer and sale of securities in the form of investment contracts under federal securities law. Unbeknownst to its investors, 12daily Pro is, in reality, operating a massive Ponzi scheme. * Tlennonfor12dailypro.com

“Hundreds of thousands of people are really concerned,” said 12daily Pro user Lee Nelson of Tampa, Fla., who said he had $12,000 tied up in the enterprise …The Daily Universe conducted an investigation into 10-month-old 12dailyPro, but found no concrete product or service that would account for claimed returns. *newsnet

“…how can there be so many suckers in the world?”

A3Union

Section (3) A3Union has been collecting ‘investor’ funds using digital currency accounts since around mid 2006. There is no Wikipedia page listing A3Union yet…I suppose that listing will come after the operators close and run with the money!

The Sales “Pitch” - Quote, “I have never seen anything like A3Union, the first time I made an investment was awesome! Very fast payment to my e-gold account in a matter of seconds. wow, i think i’ll be staying here for as long as A3Union stays. it helped me improve my monthly income for almost 40% average. I hope this company will stay long and strong! Thanks and Mabuhay!” *a3union

“Hi im a newbie with a3union i’ve joint a3union it is because the genuine of the programme compared to other HYIP plan that i have invested in and i can say that a3union is the best among the best…the only truly HYIP plan in the earth.” *a3union

The “Dream” - A3Union is a leading global provider of high yield investment products and services….Take a try of this low risk opportunity, and your principal and profit will be secure and 100% guaranteed…Our existing fund portfolio provides access to some of the global leading buyout and venture capital partnerships.

The Company Line Lie - A3Union constantly manages investment relationships with over twenty high yield investment partnerships in six countries. With our investment teams strategically located in London, New York, Hamburg and Tokyo, we actively manage investment relationships with over twelve thousands personal and business customers in 30 countries…A3Union is a perfect solution for those who are not familiar with day trading and trading stocks, however want to invest in the stock market and make stable profit from their investment.

The “Reality” - A pure ponzi scheme. Reported now to be run by some Russians….see the numbers section (below) for the reported astronomical promised returns. There is absolutely no transparency in this ponzi and no audited numbers to even discuss…there is no proof that A3Union has even completed one profitable trade.   Let’s press on and ask the same set of questions applied to the original 1920’s ponzi scam.  You can tell me if those questions will apply to this situation.

How Does It Work And When Does It Collapse?

continued part 2

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POSTED IN: Fraud, Pecunix, e-bullion, e-gold