In April of 2008, we wrote about HugeROI and their plans in revamping the website and offering their own in-house investments to the members. A year later and the contents of their homepage has not changed, except for the announcement that the “new HugeROI is around the corner”.

If you missed it, the revamped website came online in early fall of 2008. HugeROI did offer some investments with incredible returns. Maybe you have seen this message from one of their founders, Clifton Alexander, in various investment forums.

From the desk of Clifton Alexander the investment guru.

Hi,

If you want a 100% real investment program registered in Tennessee and soon with the SEC, then this is it. You have a choice now, keep getting scammed or join a real investment club. It’s up to you.

We would like to introduce our profitable investment club which we have been working on for years.

We have two investment options available, conservative and aggressive.

Under the Conservative Option, we aim to produce 20% net profit every month
using an extremely conservative trading plan which aims to protect your
capital and take profit for the month once the profit target is met.

Under the Aggressive Option, we do not aim for a specific monthly target
and will execute our full trading plan monthly. The highest return on investment so far in one month is 313% which can be verified, Just ask us to show you.
You will receive more performance details when you visit our site.

HugeROI Inc. is located in the United States and registered in Tennessee (Reg# is available on our site), our traders are registered in New York and Singapore. Our trades are a hedge fund company specializing in private equity management and imparting of short term option swing trading knowledge through proprietary trading systems.

We even show you the trading charts of every stock option we choose and how we produced profits.
So if your tired of those so called “investment programs” closing down and running with your funds, join a real investment club and profit.

If you would like to see our past stock option results just contact us.

Thanks for your time,

Clifton Alexander
www.hugeroi.com

1877-HUGEROI
1877-484-3764
HugeROI Inc.
PO Box 9252
Memphis, TN 38190-0252

A few months after opening the site up for investors, an announcement was made that the business would be under new management. (We have yet to see any registration with the SEC at this time.)

In the meantime, unfortunate investors were submitting their funds into the HugeROI investments for trading and expecting a huge return for their money. At the end of January 2009, HugeROI investors were shocked to find out they could no longer log in to the site.

A message was displayed on the homepage stated that all funds in the investments were lost by their hired trader and the site would be closed for now. It directed the investors to send an email to hugeroi@yahoo.com to obtain proof that this is really what has happened. (One wonders why they would use a Yahoo email address when they own the HugeROI.com domain.)

Sending an enquiry email to this address resulted in a prompt autoresponder message. The contents of this message is quoted below verbatim.

Hello,

If your replying about your account in December we took a major loss and it wiped out all funds including our own. We will have to close the site down for a while until the market gets better. We hate to do this but the traders lost everything in the stock and forex market. Please visit this link below to verify the loss. http://www.photohost.info/public/viewset/259

We visited the photohost site and found what are supposedly the screenshots of the trading account that lost all the funds.

So there you have it, another unregulated online investment site that bit the dust. Their claims of SEC registration and high returns were nothing more than a “pie in the sky” dream or an outright scam. A third reason may be that they did not have years of experience liked they claimed or just plain incompetent to have lost all the funds.

Now that they have announced that a “New HugeROI” is just around the corner, can you trust them with your hard earned money?

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According to the original litigation, Global Online Direct Inc. took in $45Million from at least 9000 investors. On October 6, 2008, the latest declaration from the Grassmueck Group, the court appointed receivership, only $1.5M is available to return to the investors from what has been recovered.

Now for the bad news, only investors that had invested at least $2000 are authorized to submit a claim. This would leave out at least 50-90% of the investors because when this program was online, the minimum investment to participate started at $150 and later raised to $500. Most people will usually go in with the minimimun to “test the waters”. Unfortunately, the majority of them will receive zilch from the recovery efforts.

This begs the question, does government intervention and meddling really for the protection and benefit of the investors? To rub it in, the biggest winners in this whole fiasco are the receivership, attorneys, accountants and various consultants hired by the government to provide “relief” to the bilked investors. How much was their windfall? Read the first “Notice of First Applications for Professional Fees and Expenses“.

Receiver :                    $124,558.00 + $ 6,158.67 in expenses
Receiver Counsel :        414,982.00 + 25,285.93 in expenses
Local Counsel :               26,754.00 + 1,876.14 in expenses
Receiver Accountant :  158,632.95 + 2,501.82 in expenses
Total:                 $724,926.95 + $30,322.56 in expenses

It appears that the investors got duped twice, once by Global Online Direct Inc. and then again by our own trusted government that are elected to serve and protect its citizens. If the distribution were to be fair and all the investors got something back, $1.5M/9000 that would be a pittance of $167.00 vs the $755,000.00 being paid to our SEC and government representatives.

One blaring question remains. Where is the rest of the missing $42,744,750.49? Our government went through great expense and can not seem to find it. It is as if the paper trail ended and the money went into thin air.

Our theory is that this money is probably safely hidden offshore somewhere just waiting for Global Online’s defendants to withdraw and spend once they come out of prison in a few years. This is a testament that to protect your hard earned money and wealth you will have to put some offshore. The scammers do it, why shouldn’t you?

What are the lessons to be learned from this experience for the small investor? If you are going to participate in risky investment programs, ones that falls in the gray area of SEC jurisdiction; make sure it is located offshore. If the SEC litigates and halts the program, you can kiss your investment good-bye. (This is not to say all offshore investments are legit either, one will have to do the same amount if not more due diligence and work within your country’s tax laws.)

Secondly, educate yourself on how to safe guard your wealth from the leeches and predators by going offshore. Global Online Direct has demonstrated clearly they know how to do this, after all $42 Million is still missing.

This whole experience has us wondering what if the SEC had practiced a bit of “laissez faire”? Would the 9000 investors have gotten more than what they are getting now, which is practically nothing? What if the intentions of Global Online Direct was really honest and attempting to make good on what they were promising? We will really never know.

One thing we do know for sure is our U.S. government doesn’t really have the best interest of small investors in mind. Just look at the current financial crisis. Literally overnight, investors were wiped out in the stocks of IndyMac (INDC), Freddie Mac (FRE), Fannie Mae (FNM), Lehman Brothers (LEHMQ), Washington Mutual (WAMUQ) and the list goes on. All from the actions of our elected officials and employees of the taxpayer at the Federal Reserve, Treasury, SEC and FDIC. If they had done their job of watching over the real crooks on Wall Street, we wouldn’t be in this mess. So much for serving and protecting the people.

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The last email sent out from Worldlpp.net was rather ominous. It was purporting to be from an employee of ITConsultinglive.com on behalf of Worldlpp because Conrad Addison was incapacitated as a result of a stroke. The employees of ITConsultingLive had now taken over the management and operations of Worldlpp.

No explanation was given as to what will happen to all the investor’s money and as to the future of Worldlpp. Investors are entitled to know as much since it is their money that funded and capitalized ITConsultingLive as one of the investments.

As of today ITConsultingLive.com is still online and apparently in business. The various sites that were under the Worldlpp portfolio are also online, however, no updates to investors as to the status for over six months. Vivamin.com, BidHire.com, BidSnarf.com, and StripLivePoker.com were all part of this Worldlpp investment project.

It should be noted that Conrad Addison is also a principal of TakeTheInternetBack.com and WorldAdGroup.com. Worldlpp was also involved in MegaBonusClub.com. The following question and answer is found in the FAQ of TakeTheInternetBack.com site.

Q: Okay, who are the principals and who is backing this?
A: How about 3 successful businessmen? Our backers are Winston Price, a retired hedge fund manager; Conrad Addison, a retired businessman currently active with internet programs, and J. Brian Bailey, a retired automotive consultant.

At the bottom of each of these sites, one can see the “Website development by IT Center” badge which corresponds to ITConsultingLive.com. Each site is also cross linking to the various sites that are all developed by ITConsultingLive.

So what does all this mean? We can only deduce that ITConsultingLive.com is alive, well and functioning. As an entity of Worldlpp they should be held accountable to its investors. Lack of communication and the shutdown of Worldlpp.net/.com only confirm that the investors have been left high and dry.

If Conrad Addison and the principals of ITConsultingLive.com are profiting from the use of investors’ funds and using the money to invest in other businesses like TakeTheInternetBack.com and the WorldAdGroup.com, they are committing fraud.

It is our opinion that the Worldlpp program was set up as an elaborate scam to steal monies from investors to finance their separate online ventures. As a public service, we are warning potential customers and clients to steer clear of any websites or businesses that are developed by IT Live aka ITConsultingLive.com. Stay away from any business that has Conrad Addison’s name attached and or an address of IT Center, 22811 Meridian Ave E., Suite B-19, Graham, Washington, 98338, USA.

There were several other websites being sold as an investment opportunity from Worldlpp that were being developed before the main site went offline. HotEuropeanCams.com and a supposedly payment processing portal in Romania called PlatiVirtuale.ro. Both never came into fruition, however, investors’ funds went with it.

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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?

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Is it just me or does the name AcmeInvestor.com conjures up thoughts of Wiley Coyote from the kid’s cartoon, “The Road Runner Show”? If I had not known any better, I would have thought that this site might have been the rebirth of the PIPS scam if the names were substituted.

Does the concept sound familiar to you? A private loan program, earning 2% per day for 180 days plus throw in the humanitarian aid objective to the recipe and voila you have an investment that anyone can trust. Wait a minute, it’s not an investment. It is a “private loan”.

We wouldn’t want the government regulators to think otherwise and have to shut them down like many so called loan programs that came before them (PIPS, GINS, Global Online Direct etc.). They claim to be a licensed private investment fund. Where is the proof? None is shown on the website; not even a contact address or phone number is listed.

While it is true the Acmeinvestor.com domain was registered in 2005, the website was not up until the first part of 2007, so take the “Building Trust for 2 Years” with a grain of salt. I have yet to see their “Online Support” light up as being online once.

I am not convinced of their investing professionalism with all the English language errors found on the site. In our opinion, it is just another investment scam originating from Asia. Run fast from this one –beep, beep!

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The heat is definitely on for both SwissMutualFund/Swisscash as current investigations and litigations are in the works from various international governmental agencies. Most notably, the Malaysian government has blocked a number of websites connected with SwissMutualFund/Swisscash (swisscashguide.com, swisscash.net, swisscash.biz and swissmutualfund.biz) citing the websites offers an illegal investment scheme.

In a press statement, the Malaysian Securities Commission reminded investors that neither Swiss Mutual Fund (SMF) nor Swisscash (SC) is licensed by the commission. They also stated that the activities of SMF/SC had also been declared illegal in several other countries such as Jamaica and China. This is only the beginning as other countries follow suit.

“The commission said it would continue to take all measures to combat investment scams, including blocking access to more websites, and taking appropriate enforcement action against its operators and agents.”

Currently, there have been no public comments from the U.S. government in regards to SMF/SC even though SMF/SC claims to have an office in New York. Any company that sells securities in the U.S. is required to register with the SEC. A little due diligence reveals that the New York address that is given on the SMF/SC website is nothing more than a virtual office that is shared by other companies. The telephone numbers are being answered by an answering service that is not aware of what SMF/SC is.

Here is the address and phone number of the so called New York office of Swiss Mutual Fund found on the website. Incidentally, this address is shared with a travel company called Exclusive Departures Ltd.

280 Madison Avenue, 912 – 9th Floor,
New York. NY10016, U.S.A
(212) 386 5570
(212) 386 5573

Too Good To Be True:

It must be noted that SwissCash claims to be backed by Swiss Mutual Fund that has been around since 1948. There is no evidence that such a mutual fund exists. No historical data or performance recorded anywhere. All their online sites have been created recently or as early as 2005. For a 60 year old company, one would think they would have more of an established presence or at least for public relations.

One of their newly introduced investment plans, SIP25, claims an incredible return of 25% per month on the principal invested -forever. While it is possible for some types of investments can return 25% or better in a month, there are no real investments that will make a bold claim of having a set return that high consistently or consecutively for a long period of time.

Do Not Let the Name Fool You

In the world of finance, Switzerland is well known for strong privacy laws; a tax haven for high net worth individuals and their offshore investments. SMF/SC is playing on this association to convince potential investors. There is no current affiliation with Switzerland.

In fact, SMF/SC is using an address in Dominica and previously in Cyprus.

P. O. Box 2342. Roseau,
The Commonwealth of Dominica

What Happens Next?

It appears that the SMF/SC websites are currently down. Forum and blog buzz suggests that they will reappear in 2008 under a new site and location. This time, they will have an address in Belize with a new affiliation with a new company and/or name called SunTraders.com.

Dominica was once a location for prevalent tax evasion and fraud for expatriates. In recent years, the government has become stricter and cracked down on who they allow to be registered in their country. It appears that SMF/SC under the pressures of many governments like Malaysia, Jamaica, and China is now finding it hard to stay in Dominica as well.

Belize is a little bit more relaxed on setting up an international business corporation and so it is only proper for SMF/SC to find it appealing as a new place to set up shop. Soon, they will run out of places to hide.

Conclusion:

Swiss Mutual Fund and SwissCash offer no transparency for an investment company that claims to have Billions in assets. In my opinion, three governments discrediting SMF/SC is enough to file this under scam. (The Switzerland Embassy also acknowledges that no such company is registered in Switzerland.) Investors are advised to satisfy their due diligence completely if they are still considering to invest. Just be warned!

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How Prime Bank Frauds Work

Prime bank programs often claim investors’ funds will be used to purchase and trade “prime bank” financial instruments on clandestine overseas markets in order to generate huge returns in which the investor will share. However, neither these instruments, nor the markets on which they allegedly trade, exist. To give the scheme an air of legitimacy, the promoters distribute documents that appear complex, sophisticated and official. The sellers frequently tell potential investors that they have special access to programs that otherwise would be reserved for top financiers on Wall Street, or in London, Geneva or other world financial centers. Investors are also told that profits of 100% or more are possible with little risk.

Individuals and entities are targeted, including municipalities, charitable associations and other nonprofit organizations. The promoters of these schemes have demonstrated remarkable audacity, advertising in national newspapers, such as USA Today and the Wall Street Journal. Some promoters of these schemes avoid using the term “Prime Bank note,” and tell prospective investors that their programs do not involve prime bank instruments in an effort to demonstrate that their programs are not fraudulent. Regardless of the terminology, the basic pitch – that the program involves trading in international financial instruments – remains the same, and investors should continue to be vigilant against such fraud.

Signs of Banking-Related
Investment Fraud

Below are warning signs of prime bank or other fraudulent bank-related investment schemes.

Excessive Guaranteed Returns

These fraudulent investment pitches typically offer or guarantee spectacular returns of 20 to 200 percent monthly, absolutely risk free. Promises of unrealistic returns at no risk are hallmarks of prime bank fraud.

Fictitious Financial Instrument

Despite having credible-sounding names, the supposed “financial instruments” at the heart of any prime bank scheme simply do not exist. Exercise caution if you’ve been asked to invest in a debt obligation of the top 100 world banks, Medium Term Bank Notes or Debentures, Standby Letters of Credit, Bank Guarantees, an offshore trading program, a roll program, bank-issued debentures, a high yield investment program, or some variation on these descriptions. Promoters frequently claim that the offered financial instrument is issued, traded, guaranteed, or endorsed by the World Bank (Department of Institutional Integrity (INT) or Operations Evaluation Department) , International Monetary Fund (IMF), Federal Reserve, Department of Treasury, International Chamber of Commerce (ICC), or an international central bank.

Extreme Secrecy

Promoters claim that transactions must be kept strictly confidential by all parties, making client references unavailable. They may characterize the transactions as the best-kept secret in the banking industry, and assert that, if asked, bank and regulatory officials would deny knowledge of such instruments. Investors may be asked to sign nondisclosure agreements.

Exclusive Opportunity

Promoters frequently claim that investment opportunities of this type are by invitation only, available to only a handful of special customers, and historically reserved for the wealthy elite.

Claims of Inordinate Complexity

Investment pitches frequently are vague about who is involved in the transaction or where the money is going. Promoters may try to explain away this lack of specificity by stating that the financial instruments are too technical or complex for nonexperts to understand.

You should be especially watchful for prime-bank related schemes promoted over the Internet. Despite numerous SEC actions charging prime bank promoters with multiple violations of the federal securities laws, prime bank offerings continue to proliferate in cyberspace.

If you have any information regarding the offer or sale of “prime bank” or similar financial instruments, or programs employing these instruments, please provide that information to the SEC’s Division of Enforcement immediately by using the Enforcement Complaint Center. You also may want to visit other helpful websites to learn more about prime bank-related fraud.

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