Friday 11 March 2016

Amazing5 – Another Ponzi scheme

We received an email last week from a reader who asked “Hello! watchdog l want to invest my money in a company called Amazing5 based in UK. l want to know if l can trust it.”

The same reader has approached us twice before asking similar questions about two other firms that he thought might make him loads of money. So what about Amazing5? Is it a scheme that can be trusted? Or is it a scam like the other two schemes he’s asked us about?

Here’s some background.

The web site for Amazing5 (“Amazing Intelligent Investments”) is very slick. It has pictures of beautiful mountains, sleek Apple computers and good-looking people. It says:
“Amazing 5 Limited offers you a wide range of professionally managed funds designed to meet your investment needs. Our investment portfolios are designed in such a way that each participant, regardless of the income level, can fully participate and earn money.”
Sounds impressive, doesn’t it? It goes on to say:
“The key to our long-term financial success is working hard to identify and develop opportunities that create Multi-Streams of Income. Maintaining diversity and establishing opportunities across the globe is what makes a true success. Currently, we are working on projects in some of the most exciting industries with operations in the world’s top markets.”
Did you notice that none of that actually says anything? They don’t actually give any clues about how they make money.

Their Frequently Asked Questions page asks “Is Amazing5 Limited officially registered?” and the answer they give is “Amazing5 Limited is a fully registered investment company based in the United Kingdom”. That’s completely true, they do indeed give an address right in the heart of the business center of London.

But that’s where you can begin to find a few suspicious things. Yes, the company is indeed registered in the UK but it was only formed in September last year and has precisely one Director, Richard Pardee, a 30-year old “broker” who appears to have no traceable history. More importantly, although the company is legitimate I can also find no trace of it being registered with the authorities in the UK that govern financial services. That’s the first major warning sign.

Then there are the claims they make. They claim that if you invest between $20 and $500,000 with them for 31 days you’ll earn a return of 5% every day. Yes, every day. They suggest that after the month you’ll have earned a 155% return on your investment.

But here’s a major warning sign. You only get to keep the interest. Your “investment” will never be returned to you. They say this quite clearly. On your behalf they ask “Do I get my investment principal back?” and the answer is:
“No, your investment principal is absorbed into the investment plan to generate future interest (which in total will be greater than the principle) thus it’s included in the profit. Once the investment period has ended your principal will expire, not returned.”
Well, at least they’re honest. They keep your money and, if it’s true, all you’ll ever see is the interest you’ll earn. But of course it’s not true. Here’s a simple truth. There is no genuine investment scheme that can consistently earn you 5% every day. There simply isn’t. There never has been, there never will be. The ONLY way that a scheme can offer that sort of return is if the “profits” are coming directly from the “investments” of other people joining the scheme. If I join today and invest P1,000 the P50 in profits I get tomorrow actually comes out of the P1,000 that you contribute tomorrow when you join. There’s no growth in value, just a growth in the total amount invested. It’s what they call a Ponzi scheme.

Just like all the other Ponzi schemes we’ve seen, just like Eurextrade, the so-called profits can only last until the scheme exhausts the pool of gullible new recruits or the word spreads that it’s a scam and everyone loses confidence and tries to withdraw their earnings. This happens to ALL Ponzi schemes sooner or later.

So to answer the reader’s question, no, you can’t trust this scheme. It makes ridiculous claims about earnings that can only be made by running a Ponzi scheme that will inevitable collapse. Despite it’s impressive address in the City of London this is actually no more than a “pay as you go” serviced office facility. There’s nothing wrong with this in principle but you should expect a lot more from an investment company who wants you to trust them with your money.

This is a company that has only one Director with no traceable history. It even has an element of a pyramid scheme to it. Their web says you can “receive up to 20% referral commission” if you recruit other people into the scheme. Again, just like Eurextrade.

I’m also suspicious about their London connection. I suspect they have no real link to the UK at all other than when they quickly registered a company there, something anyone can do. I suspect they’re Russian.

The clue is in the web traffic. Half of all the visitors to their web site are from Russia, followed by visitors from Ukraine, India and Brazil, the other countries they clearly have in their sights.

And yes, clearly they are considering us as well. Only one reader has contacted us about them so far but I suspect that’s just the beginning of it. Remember that Botswana will be high on their target list. We might only be a small country compared to Russia, India and Brazil but we’re the country with the reputation for being gullible and naïve. Eurextrade exploited that, why won’t these guys?

Amazing5 makes promises that are too good to be true. It’s a Ponzi scheme that will collapse in the same way that ALL Ponzi schemes eventually collapse. Do you really want to be left poor as a result?

There are no easy, quick ways to become rich.

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