It all started with one spam email. It was the last week of December 2004. I was cleaning out my Yahoo! inbox but instead of deleting all mails in the Bulk Mail folder, I retained one whose title caught my attention. It proclaimed: "40% return after 5 days! No risk!"
I clicked the link in the mail despite the resistance of the voice in my head: "Fool! Don't trust these people! 40% return in 5 days is impossible. It's definitely a scam!"
I know, I told myself, but I'll just try searching for this in Google to see what turns up. Who knows, this might be the 'pot of gold' I've been looking for!
One keyword led to another and I jumped from one site to the next: MinistryofGold.com, MoneyMakerGroup.com, TalkGold.com, HYIPDiscussion.com.
Browsing through hundreds of discussion threads in these HYIP forums, I became convinced that earning from so-called High-Yield Investment Programs (HYIPs) is indeed possible. Right there and then I decided to jump on the HYIP bandwagon.
Falling into the scam pit
I came into the HYIP arena at the height of popularity of programs such as Golden-Nestegg, Empowerism, YMMSS, SportsPointer, and PIPS, among others. Most of these programs accepted only egold and because I wanted to start immediately, I looked for ways to fund my account the quickest method possible. This officially was the start of my HYIP adventure.
In January 27, 2005, I dropped by the HYIPDiscussion (HYIPD) forum to ask how to fund my egold account via credit card. Two days later, I opened a LondonGoldExchange (LGE) thread to ask about the possibility of using that exchanger instead. Eventually I opted to use LGE because credit card funding charges an exorbitant fee (usually 10%).
Even before egold was sent to my account, however, Golden-Nestegg had already been officially declared a scam. At the same time, the YMMSS cycle time had been extending, meaning it would take a longer period of time for one to earn as compared to before. I was unperturbed.
I decided to invest in Empowerism and SportsPointer, among others, and also tried to fund my Moneybookers account so I can get into Bryan Marsden's infamous program, PIPS. (PIPS only accepted Moneybookers and PicPay, their own curency, during that time.) Moneybookers failed to verify my credit card so I decided to simply let go of PIPS. It turned out to be a blessing in disguise.
Trusting the scammers
It would take me weeks to find out that the ultimate ingredient of a successful HYIP scam is the naïveté of HYIP investors. Like most people, when I started in this arena I always believed everything the HYIP admin said. Trust grew especially if the admin showed copies of his IDs or talked smoothly about the legitimacy of his business.
Some of the HYIPs I fell for and their modus operandi include:
- Sun&Pine Group – a "genuine" UK-based online seller that simply stopped paying investors after 3 months
– My post introducing the Sun&Pine Group in HYIPD, January 26, 2005:
A supposedly real company in the UK, Sun&Pine Group offers realistic returns (at least 0.5% daily) and claims to have interests in online selling, including selling in Ebay. They have various plans and your investment can be locked up for 10 or 30 days or even a year, depending on the rate of return that you want. I made a test spend here some weeks ago and got the principal with compounded interest without a glitch. I only continued with some small spend because I prefer higher rates. But can anyone make a DD on this one? They also offered a physical address in London so it might be easier to check on them.
- Jennifer's Delivery Service (JDS) – a "genuine" trucking business officialy registered in a transportation-related government agency in the US whose admin was discovered later on to have ran previous scams
– Me saying Jennfier's Delivery Service will "remain stable in the coming years" (February 12, 2005), only to fold up months later:
True, JDS's returns appear to be a bit lower but hey, it's just a small, growing business. Returns are currently variable and range between 4-10% per month depending on the truck you have an investment in. But I do think that once sales pick up as time goes by, these returns will go up too.
Another good thing with JDS is the transparency of the business and the great support Jennifer and her team have. This is one of the most stable programs I've ever seen in the HYIP arena (although it's not really an HYIP) and I have no doubt it will remain stable in the coming years.
- Jungle Ventures Ltd. – a supposedly genuine investment company that gave me exclusive access to the admin's ID only to stop paying weeks later
– Jungle Ventures admin, convincing members of the authenticity of his program, March 9, 2005:
Hello, dear HYIPDiscussion members!
I am George, CEO of Jungle Ventures LTD.
Our registered office is not our physical address and you should understand the difference between Physical address and Registered office if you are making DD's on investment programs.
We also accept wire transfers. Look at the quote from our bank details:
Beneficiary: Jungle Ventures LTD.
It proves that Jungle Ventures LTD. is our company with it's bank account, isn't it?
Back then, I never cared whether the terms of the investment program reeked of scam even at first glance: 100% return in 1 month, 12% return in 7 days, 5% return in 4 hours! Constant reassurances of admins that their programs were genuine and that they were not going to run away were enough for me to keep on investing in HYIPs.
A few bucks here, a hundred dollars there — I knew I was on my way to becoming rich in just a short period of time. I knew I was close.
I was wrong.
Losses, losses, and more losses
By the end of the first quarter of 2005, my dream of becoming rich gradually turned into a nightmare. One by one, almost all of the HYIPs I was in either stopped paying or just disappeared. The sad part was, in most cases, I have not made any profit yet.
My posts below were euphemisms for "Oh my God! I've been scammed! I'm losing money!"
- KSM Invest Gone? – Posted February 7, 2005
Haven't received payment from www.KSM-Invest.com since Feb. 5. I've checked other forums and some are reporting to have not been paid too. Looks like they've flown the coop!
- Sportspointer.com – Posted February 12, 2005
SportsPointer was one of those HYIPS I made a spend on during my first days in the HYIP arena. I got interest payments every day but four days prior to getting 100%, I received a memo saying "We lost your bets."
- Comgest.ws gone? – Posted February 24, 2005
Everything has been going on smoothly since www.comgest.ws started in 2004 until Monday, Feb. 21. Every week before that, a 5% return (or 5.5% depending on your investment) is sent directly to your account. Last Monday, though, the payment simply stopped.
I sent them an email inquiry but I'm yet to receive a reply from them. Any news from the others?
It's sad to see this one go after more than a year of existence.
- Bye, bye Jennifer – Posted February 24, 2005
It's sad to see this program fold up. DD has been done, a poster was able to visit the company personally, and pictures, contact info, and even legal papers were available on their site. Something just went awry.
I won't argue anymore of the legitimacy of the program and whether it has been a scam from Day 1 or not, but I think the best thing we can do right now is to follow up this case and make sure Jennifer refunds her investors. I only have a small investment here relative to the others. There are some who invested more than $30,000 and probably some more have invested more than that. I even saw one in another forum who said he invested thousands of dollars on the day before Jennifer announced the problem.
In just three months, I've already lost more than $500 because of these HYIP scams.
(To be continued…)
Next in Part 2: "Lessons Learned" and "Finally, success"
[tags]HYIP, autosurf, scam, investment programs, high yield investment program[/tags]