We are not going to rub it in or said we told you so. Really, we are not laughing at the duped “investors”, but feeling a bit saddened. How many times should one lose their money with some pie in the sky promises before one realizes that an online investment is too good to be true when it lacks transparency? Run as fast as you can if an investment insists on hiding in anonymity or doesn’t discloses the ‘who’, ‘what’, ‘when’ and ‘why’ of the so call investment.

Legisi.com had high promises of big returns monthly, yet never said how the money was being invested to give such returns. Well, it appears that it was an elaborate Ponzi scheme after all. Half of the 72 Million dollars taken in was being paid out to earlier investors. The other half was either lost by the admin, Gregory McKnight, or spent for his own personal use in buying cars and gifting to family members.

If you are one of the 3000 to 4000 investors who lost money on Legisi.com, you can read all about the SEC’s litigation and complaint against them here. Contrary to popular belief, government intervention and the requirement for securities registration serves a purpose. There is a reason for an individual to be qualified and passing SEC exams to be able to manage investors’ money.

“And, far from being the wild success McKnight portrayed to the Legisi investors, his investments generated significant losses. All together, McKnight has realized losses totaling approximately $3.6 million on the investments he made with the Legisi investors’ money” - SEC

Unfortunately, Gregory McKnight was not registered and was not licensed, therefore didn’t know much about managing investments. He racked up losses as told by the SEC, but the truth is that he was filling his own pockets with investors’ money to spend as he pleased.

“McKnight diverted the remaining $39 million of the offering proceeds for his own benefit. In the manner of a classic Ponzi scheme, he used approximately $27.5 million of the offering proceeds to make payments of purported profits to Legisi investors. McKnight used another $2.2 million of the offering proceeds to pay personal expenses, including at Ieast $218,919 on motor vehicles, at least $190,682 in payments to or for the benefit of family members, at least $124,215 for home repairs and renovations, at least $108,311 for vacations and travel, at least $102,024 to pay credit card bills, and sent at least $144,000 in total to his daughter, Jennifer McKnight, his niece Danielle Burton, and to Danielle Burton’s mother Theresa Burton.” - SEC Complaint

In recent weeks, two more online investment schemes have disappeared from the net; Scandinavian Network Group (snginvest.com) and Capital Preservation Society (capitalpreservationsociety.com) fka ICC, and a purported Reverse Pension Plan scheme. Neither site has informed or contacted investors as to the reasons behind going offline.

Scandinavian Networking Group (Snginvest.com)

We made a post regarding SNGinvest.com back on September 26, 2007 here, and at the time they were having delays and had not paid investors for over a year giving reasons that the funds were frozen and are being investigated by their legal counsel and traders. Fast forward to this current month, the domain snginvest.com had expired last month not been reachable.

Tom Sornes, the man behind this program has not contacted his thousands of investors to explain why. The facts remain, that over 3000 investors gave money to this guy and have yet seen a return. It appears that Tom Sornes may have bilked millions of dollars from investors to fund his furniture business www.attractions.se.

If the company you keep is an indication of the type of person you are, then Tom Sornes does need new friends. SNG Invest can be connected to Frode Jorgensen the creator of Hatfield Oak that SNG was intending to use as an offshore payout channel. Jorgensen was also the founder of Plexplay, which was issued a cease and desist order by the Kansas SEC in the states. Across the ocean, Jorgensen was being charged by the Norwegian court for fraud and his involvement in Plexplay.

Other names that have appeared in Tom Sornes’ circle of scamming friends are Tobias Tulbey, Roger Karlsson and Torben Jolnes. Tobias Tulbey’s name had previously appeared in SNGinvest’s Whois info as well as HCI25.com. Some astute observers have said that Roger Karlsson is the person behind HCI25, another online investing and reverse pension program that haven’t paid out. Tolben Jolnes is the person behind Jollypipsters , which was connected to the PIPS scam (Pure Investors or People In Profit System), which currently is still in the Malaysian court system.

Capital Preservation Society (aka ICC, CPS)

Last week, the domain capitalpreservationsociety.com expired and it is now just a landing page. For a program that was supposed to be involved in some high level financing, how could they let it expire? No emails or communication from the folks behind this reverse pension program to its members.

Is it possible that it was all a scam? Very possible since no one actually knows who is behind the program and probably the reason why they insisted on being anonymous. It seems like someone in Asia may be having some fun in the sun with the money made from the 6000 investors.

Supporters of the program may argue that it could not have been much that CPS could have made if it indeed is a scam since they paid out affiliate bonuses to members for referring others. It is all a matter of perspective. Even if they only made $5 - $10 per 6000, that’s $30K to 60K they took in for setting up a simple website that cost a couple of hundred bucks to host.

Naïve investors fail to realize that scammers usually run multiple sites simultaneously. Multiply the scam 3 or 4 times and these guys are making a good living at the expense of others. Justifying that they could be legit because their website had been up for over a year and they were regularly communicating with the members is irrational.

It is a little investment of money and time for the scammer to receive a big payout. Spend a few bucks on a website, drop in once a month to offer an update to maintain order, collect the money and then run once it is all transferred.

So many investors are being deceived by this scare tactic of why these program scammers do not divulge who they are and how they are investing with the investor’s money because of some secrecy. They claim wealthy people become rich by investing in investments that are only known by them and if it is known, the program would fail.

The truth is, how savvy investors make money in legitimate investments are not shrouded in some secret transactions, but through due diligence and trust in the partners they have invested with.

When an investor entrusts his money with an unknown entity that promises a big return, but provides no transparency as to how they will accomplish this or provide contact information, it is an unwise decision on the investor’s part. Should this entity disappear, what recourse one has if one does not even know a verifiable name, address or contact information?