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FREQUENTLY ASKED QUESTIONS

about investment scams 

Questions below have been derived from letters received from fraud victims, their friends or family, and those who are contemplating an investment offer.

Introduction - Questions menu

Investment scams are among the most ruinous scams in existence. 

In high end investment schemes, psychological control over the victim is fierce, using strategically planned emotional highs and lows.  When the scammer is getting ready to flee, the constant fear and anxiety he or she uses to control victims to prevent them from contacting law enforcement, along with the ultimate realization that all is lost, can lead to strokes, heart attacks, even suicide.

There are many different investment scams.  There are the fly-by-night scams, such as hyip, cyber coins, forex, and boiler room scams, and the more sophisticated and complex scams such as High-Yield Investment Programs (HYIP) that involve international intrigue to sweeten the pot.

Regardless of the scheme, funds are never invested in anything.  The money is stolen the moment it is transferred to the fraudster's control. 

If any funds are returned at all, it's in the form of Ponzi scheme interest in which Investor A's funds are returned to him as interest earned so A will run to tell B about the terrific offer. 

This is repeated over and over, with funds from Investor C used to pay a small bit of return to Investor B and so forth until the fraudster has personally spent all the investor funds.  That's when the excuses begin.

The questions below are about HYIP scams.  The normal amount the fraudster asks for is $100,000, but he or she will take $5,000 or $10,000 saying that the smaller amount will be pooled with other small investor amounts to make up the $100,000.  Some HYIP fraudsters will claim the minimum amount is anywhere from $2 to $5 Million, again claiming that funds can be pooled.

* hyip, all lower case, is a volume-of-investors scam relying on a large number of small investments and is loosely based on the original High-Yield Investment Program (HYIP) scams.

 

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