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Monday, 2 May 2016

Anatomy of a ponzi scheme

"A Ponzi scheme is a fraudulent investment operation where the operator, an individual or organization, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned through legitimate sources. Operators of Ponzi schemes usually entice new investors by offering higher returns than other investments, in the form of short-term returns that are either abnormally high or unusually consistent." https://en.wikipedia.org/wiki/Ponzi_scheme 



"But I know there are people making money from this!?"

Of course there are. A ponzi needs to feed the illusion to extend its lifespan.

Let's take a look at a Finnish ponzi scam called Wincapita. Wincapita started as a Bettrust in 2003 offering high profits from betting. By the end of 2004 they started marketing the company/club by saying that the company is a successful currency exchange firm. In September 2007 Wincapita stopped paying revenue to its 5000 members. Around then Wincapita also gained media attention and was suspected to be a ponzi/pyramid scheme. However Wincapita still continued growing until March 2008 when suddenly Wincapita's webpage disappeared from the internet. By the end Wincapita had approximately 10.000 members who had invested about 100.000.000 euros to the ponzi. About 90.000.000 euros from the total amount were paid as "revenue" to the members during the years. However only 5 percent of the members (about 500 individuals) got profits from the ponzi.

Wincapita reminds a lot of OneCoin by the way they both have a charismatic leader, there's no product to sell and they have promised sky high profits. 
There are also alarming similarities in the way the members are acting and defending their beliefs. 

As a domestic ponzi scheme Wincapita case lead to trials here in Finland and the scammers were finally sentenced. Needless to say it was a terrible mess and took years of trials. The ones who profited and spent their winnings into luxury life were in deep shit after sentenced to compensate it all to the state. The victims that lost money were to claim their share from the state but evidently there was not enough to compensate all the losses.

Interestingly there are still Wincapita-believers who think that they have been unfairly treated by the Finnish authorities and the collapse of Wincapita was caused by a some sort of conspiracy of the Finnish police and authorities.


"Don't google! There are only haters. Ask the upline!" 

- Don't read blogs or make google search! Ask the upline in case you need any information! 
- Bloggers make money from bashing our great company. 
- The others are just envious and don't want you to succeed. 
- Don't go to discussion boards! There are only trolls and they know nothing about our great leader and the company. 

Sound familiar? Then you might ask yourself are you in a ponzi scheme or in a loony bin. The phrases listed are the basic arguments scammers like to make these days trying to prevent anyone getting real information about the ponzi/pyramid they are lured in.

As a nice trivia I might add that the Finnish police specifically thanked a Finnish web forum called MuroBBS because of the discussion there about Wincapita helped in the criminal investigation. No doubt there was also a lot of people who did not lose their money because of checking out the thread in Murobbs and making the wise decision not to get involved with Wincapita.



Scammer's resume is a list of collapsed ponzi/pyramid schemes

For some people scamming seems to be a way of life - and maybe the only way they know how to live. It's not uncommon to find familiar faces from the past involved in the present scams. The most successful scams are most likely to have professional scammers behind them with years of experience from previous scams conducted. A simple google search reveals a lot of the people involved in these schemes. Apparently they still manage to make nice living with other people's money year after a year. It's hard to understand why scam victims seem to ignore the fact with whom they are dealing with. I guess it's just a matter of greediness overwhelming their judgement and common sense.

As a scam goes international it becomes vital for its growth to gather scammers with a proper knowhow to expand it abroad and arranging new bank accounts to replace the frozen ones (they tend to freeze when banks notice what's going on). OneCoin is a prime example of an international scam well done. It has spread its tentacles all over the world recruiting branches of different level scammers to feed the monster. As they have been rewarding their members with toy money the lifespan of the ponzi must have exceeded the wildest dreams of the scammers. They don't even bother to explain why their promises go unfilled. Then again how would they?


It's usual for scams to have a lot of similarities to religion whether it is a ponzi or a pyramid scheme. The true believers don't question anything and anyone questioning is against them and only has ill will towards their success. Many of them hold on to their beliefs until the bitter end only to get involved with a new scam and the vicious cycle starts again.

2 comments:

  1. I thought I would leave my first comment. I don’t know what to say except that I have enjoyed reading. Nice blog, I will keep visiting this blog very often.

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    1. Thanks for your feedback! It sure has been quiet in the comments section. So far there has been about 850 visits from all around the world in this blog, mostly from U.S.A. and Finland. I'm going to release some statistics later this month.

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