How long do financial pyramids work. Financial pyramid - what is it, its signs. One-level pyramids or Ponzi scheme
Hello! Today we’ll talk about financial pyramids so that you know what it is, how it works and don’t fall for such “earning money” schemes in your life.
The market economy is characterized by freedom of enterprise and choice of the way of doing business. For any businessman, the main goal of his business is to make a profit. Money is the universal measure of performance evaluation. The functioning of a legitimate business is based on the production, sale or resale of goods, the provision of services and other schemes. There is such a term as financial pyramids. Most often, although not always, these are deliberately created fraudulent models for obtaining money by their creators.
What is a financial pyramid
In economic terms, a financial pyramid is an organized scheme for generating income by its participants by attracting funds from new participants. That is, people entering the pyramid today "provide" those who came there before. Or all the money can be accumulated by one person - the organizer.
An ordinary layman will immediately remember the financial pyramid MMM in Russia in the early 90s, which ended in a loud crash with thousands of affected people. Indeed, in most cases they disguise themselves as investment, charitable funds, companies with goods that have no real value, or simply promise to make money out of thin air.
However, the classical scheme of doing business can lead to a financial pyramid. This happens when the owner miscalculates profitability and the company goes at a loss or barely covers the cost. It is not possible to return the money taken on credit or attracted from investors. To support the business, new loans are taken to pay off the old debtors. It is incorrect to interpret this as fraud, this situation is closer to the concept of illegal business.
Fraudsters often use this loophole, carefully covering financial pyramids in order to evade responsibility. A business can bring little profit, but if the surplus value (the result of the company's work) is systematically less than income payments, then this project is a financial pyramid. In fact, most of the profit in this case is cash from new investors.
To designate a fraudulent scheme, this expression has been used in England since the early 70s. last century, although financial pyramids originated much earlier. The first company operating under the scheme of a financial pyramid is the joint-stock company (JSC) "Organization of India" by John Law. According to the plan, she was supposed to invest the funds raised in the development of the Mississippi River. In fact, the investments were minimal, and the enterprising Scot directed most of the proceeds to the purchase of government bonds. In fact, he paid off all of France's foreign debts. Lo promised that the shares bought today would rise in price soon. Because of the hype, six months later, the cost of one paper exceeded the original one by several times. France was forced to issue more and more paper money. When the money supply became huge, and the price of shares rose to unprecedented levels, this pyramid collapsed. Commodity prices rose sharply and paper money was not accepted as payment.
Subsequently, financial pyramids began to periodically appear in other countries. He organized a large fraudulent scheme related to coupons in 1919. in the US Charles Ponzi. It was the first analogue of the modern one-level pyramid. It collapsed because coupons could not be sold for cash, but could only be exchanged. Payments to the first participants came from the next newcomers. In Russia, the pyramid boom came during the transition period to the market in the early 1990s, when Sergei Mavrodi's famous JSC MMM was created.
Financial pyramid schemes are prohibited in many countries (Canada, Mexico, Germany, Italy, Kazakhstan, Poland, etc.), including Russia (Article 172.2 of the Criminal Code of the Russian Federation). In the UAE and China, even the death penalty is provided for the construction of such a structure. If the country does not have a separate article for pyramid schemes, then such fraud can qualify as illegal business.
Reasons for the emergence of financial pyramids
The emergence of financial pyramids is due to a number of changes in the economy and state policy. Basic prerequisites:
- free securities market;
- the activities of such structures are not regulated by law;
- improving the standard of living of the population;
- moderate inflation and stable economic growth;
- the country's transition to a market economy;
- the emergence of various financial institutions offering both to keep their savings and increase them;
- lack of reliable information and illiteracy of the population in financial matters.
The essence of the financial pyramid
The main goal of such a scheme is to enrich the organizers of the pyramid due to the influx of new people. It is possible that those who immediately entered the first ranks and then withdrew their money on time will remain in profit. The contributions of the participants are not invested anywhere and go to reward the upper levels, that is, those people who invited them and others higher above them along the entire chain of the pyramid. Accordingly, if the current investor also invites people, he will receive his income from them, etc. In some models, some product may be present to cover the “business”, but the essence of this does not change: the profit in the pyramid is obtained through investments new members.
The distribution of the funds of the joining members occurs according to different schemes. The principle of the financial pyramid is as many newcomers as possible. But when the flow of depositors decreases and there is nothing to pay the promised money, the pyramid collapses. The fact is that the number of people on our planet has a finite value. Not everyone has a chance to get their hard-earned money back, not to mention the promised interest. The last ones who entered their money are unlikely to see it. Organizers can hold on to payments for some time, and then collect all available savings and hide.
How does a pyramid scheme work?
There are many variations of fraudulent pyramid schemes. The essence remains unchanged, but the ways to "splurge" the ordinary citizen are becoming more sophisticated. Consider 2 illustrative examples:
Example 1 | Example 2 | |
Stage 1 | The organizers are running an advertising campaign to grow flowers, mushrooms, exotic plants, etc. at home. People are invited to buy seeds and make some kind of “entry fee”. The total amount is 4 thousand rubles. In 3–4 months, the company promises to buy the seedlings for 8,000 rubles. | The organization presents itself as an investment fund. You need to invest at least 5 thousand rubles. It is necessary to invite 4 more people to the project and then you can get your profit in the amount of 10 thousand rubles. With the entry of the first 6 people, the company's profit at this stage is 25 thousand rubles. |
Stage 2 | Rumors about this are quickly spreading among the population, and there is no end to those who wish. Seeds are actively bought up, and the first ones to enter are already receiving their profit. It's actually money from new customers. | Each of the 6 participants invites 4 people who also contribute 5 thousand rubles. The company already has: 25 + 6 * 4 * 5 = 145 thousand rubles. Of these, she pays the first participants: 10 * 6 = 60 thousand rubles. The company's profit will be 145-60=85 thousand rubles. |
Stage 3 | At some point, the "boom" on this idea passes and there are fewer and fewer new members of the pyramid. The organizers disappear without a trace with all the money. It turns out that the plants are ordinary and not worth the declared money. Therefore, many people do not receive either the promised profit or the invested funds. | Participants of the second level also invite 4 people who invest 5 thousand rubles each. The company already has 85 + 24 * 4 * 5 = 565 thousand rubles in its hands. Of these, she pays off with the second investors: 10 * 24 = 240 thousand rubles. The company's profit will be 565-240 = 325 thousand rubles. The growth of the pyramid will be exponential (geometric progression, when the growth rate is proportional to the number of participants). There will come a time when newcomers will no longer be able to find new members. The pyramid is collapsing and the organizers are "skimming the cream". |
These descriptions are presented in a simplified form. There are complex intricate schemes with the presence of a real product and very similar to network marketing, which is a legal business. Financial pyramids live only due to the influx of new people: there are no other sources of income payment. The collapse of any such organization is inevitable.
Perhaps, within a few months after the start of work, the company begins to feel a "deficit" of new members. At the same time, liabilities are growing, and there is often panic among depositors. They massively begin to sell "securities" if any. Or impulsively decide to withdraw their investments. And if someone says that he was able to make money on the pyramid, it means that he was among the first, or at least in the middle. The top (organizers) in any case will earn more. Sooner or later, a huge number of participants will be "thrown", leaving them without money.
In order not to fall for the bait of scammers, you need to know the main signs of financial pyramids. It happens that a person knows about such schemes, but skillful psychological influence and misinformation leads him to the decision to invest his hard-earned money. Signs by which it is highly likely that a business proposal is a financial pyramid:
- High interest and fast payback period. Yields above 30% should already alert. There aren't many legitimate ways to make that kind of profit, and the ones that do exist are all medium to high risk. If a company promises to pay back the project in a few months or even weeks, then a logical question arises: why is it looking for investors among ordinary people, and not among big businessmen and experienced investors?
- Large entry fee. More often within 5-20 thousand rubles. However, then the deceived person is unlikely to go to court for this money. This sign is not always clearly expressed.
- In return for the money invested, a person can receive goods at an inflated cost and not corresponding to the declared characteristics or counterfeit securities. Documents confirming the receipt of funds are not issued or a person is given an agreement indicating that if the investment strategy does not work, then the invested funds cannot be returned.
- The company's focus is on PR. Impressive presentations, product know-how, a beautifully designed website, persuasive salespeople, mailing lists and sms - all aimed at reaching a large number of people. There are slogans like "Hurry up to be among the first!", "Hurry up and buy a device that has no analogues in the world!". At the same time, advertising is blurred: a specific product or method of obtaining income from participation in the project is not indicated.
- Concealment of information about the owners of the enterprise, lack of a license and permits for the right to engage in financial activities. However, all this may be the case if the company is registered as a figurehead or registered far abroad. If there is no company at all, and a person is invited to an office where only money is exchanged, this is definitely a financial pyramid.
- Unusual and incomprehensible reward plan. The abundance of information, complex terms and overly optimistic forecasts should alert.
- Indirectly or directly they talk about the need to involve their relatives and friends in the project. At the same time, they offer to learn special psychological techniques or methods of neurolinguistic programming (NLP).
- Excessive perseverance of the organizers. Persuading a person to make a decision and give money "here and now", the requirement to sign a non-disclosure agreement and the promise of easy money for minimal effort.
Types of financial pyramids
All fraudulent pyramidal schemes are divided into 3 types according to their structure. Sometimes there are assurances from the organizers that they have created a completely new project. However, upon its detailed examination, the scheme will belong to one of the three types known today.
One-level (Ponzi scheme) pyramids
The Ponzi scheme (Ponzi) is one of the most common and uncomplicated types of financial pyramids. It got its name from the name of a famous Italian who first organized a massive deception of the population.
The creator attracts the first participants with high interest and guaranteed income in a short time. Each joiner is not required to involve other people. He can pay the first profit to investors from his own funds. When this project becomes more popular and the number of participants increases, money is shifted - the organizer pays the old participants with the funds of the new ones. The number of applicants to join is steadily growing and many are reinvested.
Of course, there is no declared activity in this pyramid. It can represent itself as an investment, charitable project, mutual aid fund, etc. For a certain time, the game of “bag” continues. There comes a period when obligations to depositors grow, and the influx of new participants decreases. The organizer winds down the activity and hides along with all the money.
Schematically, such a pyramid looks like this:
In the center is the organizer of the financial pyramid. Contributors are marked with small circles:
- 1 queue;
- 2 turns;
- 3 turns;
- 4 turns .
The lifespan of such a pyramid depends on its popularity. Most often, such schemes live from 4 months to 2 years. About 80-90% of depositors remain at a loss. Examples of financial pyramids of this type: the first JSC "MMM" by S. Mavrodi, the investment company of B. Madoff, the "iPhone" pyramid in 2011. in Moscow, B. Tannenbaum's project for investments in anti-AIDS drugs, Vlastilina, Khoper-Invest.
Multilevel financial pyramids
Each entrant pays an entrance fee. This money is distributed among the upper levels of the pyramid: the participant who invited him and several higher ones. After that, the new investor must bring several people to the pyramid (usually from 2 to 5). In an explicit or implicit form, they explain to him that in order to make money in the project, it is precisely new participants that are needed. From them, he will begin to receive money, that is, to recoup his investments and make a profit.
In essence, this is a simple shifting of money, just like in a Ponzi scheme. As the depth grows, the number of participants grows very quickly and after 10-15 levels it will make up the entire population of the whole country. It is obvious that lower level investors will lose their money, as there will come a time when there will be no one to invite. Such people make up 85-90% of the entire financial pyramid. At this time, the organizer closes the project, taking the maximum amount of money from it.
Schematically, this structure looks like this:
Such organizations do not last long. The collapse (scam) of the pyramid occurs in 2–6 months. To increase this period, the organizers rename the name of the pyramid and move to another city to continue the "work". Many go into virtual space for better disguise. Examples of such companies: MMM-2011, MMM-2012, Binar, Talk Fusion.
Matrix financial pyramids
These schemes are a complicated modification of multi-level pyramids. There is usually a real commodity (eg gold, silver, weight loss kit, etc.) although there may be a fictitious "entrepreneurial education system" that costs money. These organizations belong to the new financial pyramids and many people sincerely believe that these are investments.
Let us illustrate the scheme of operation of such a structure using the example of Emgoldex:
When joining, a new participant under No. 4 invests 540 Euro, enters the matrix and waits for the entire level to be filled. Next, the matrix is divided into 2 of the same, the person rises to a higher level and must bring 2 people to fill in part of the lower level. Perhaps the participant number 3 on the left who invited him will promise that he himself will find people instead of him. The investor under No. 1 receives his reward - 7 thousand rubles. Euro (minus commission) in the form of a purchased gold bar, which he can sell back to the company. In fact, 14 people chip in for a “gift” for one.
When dividing the matrices (in Emgoldex they are called “tables”), the participants gradually move towards their “top”. Participant No. 1 opens a new table and enters the lowest level. Accordingly, new participants are needed to fill in the matrices. The very purchase of gold in an online store is legal, but the mechanism for collecting money and making a profit is a financial pyramid. As long as there are newcomers, the system will work.
The Emgoldex company itself is registered in Germany, the purchase of gold is carried out in Dubai. Beliefs that gold is rapidly growing in price and that this is what brings good interest to the investor is not supported by real facts. By all indications, this is a clever way to launder money abroad. After all, as the number of people who entered, there will be more and more tables. And the time will come when there will be no one to fill them.
It is worth noting that in the matrix pyramids the conditions for receiving remuneration are vague: you have to wait until the full matrix is typed, and when this happens and whether it happens at all, the company does not guarantee. Therefore, they function longer than other types of pyramids. But the X-hour will come for them too. Most investors will remain at a loss.
Comparison of the characteristics of all 3 types of financial pyramids is presented in the table:
single level | Multilevel | matrix | |
Structure | The center of interaction is the organizer. It accepts deposits and pays interest up to a certain time. | There is no single center. Each participant is in contact with their higher levels. The organizer supervises only the first people and monitors the activity of the pyramid. | The center of interaction in the matrices is 1–2 active participants. Subsequently, they can easily "forget" about the newcomer if he does not bring new people. |
Source of return | A “profitable” business opportunity, investment or charity project. | New member contributions only. Masking by direct sales is possible to confuse the scheme. | New member contributions only. Complicated schemes with the purchase of real goods serve to "cheat" new participants. |
The life cycle of a pyramid | It can be long, it all depends on the ingenuity of the organizer and his ability to convince | Short as the number of participants is growing rapidly | It can be long, as the company does not promise exact terms for filling in the matrices |
The advent of the World Wide Web provided new opportunities for the creation and development of pyramids. The geography of coverage of potential participants has increased significantly, and material costs for advertising have decreased. Tracking the movement of money through electronic payment systems is more difficult. Registration of sites often takes place on fictitious persons or in such a way that the owner’s data is not “exposed”. This makes it difficult to find a virtual fraudster and bring him to justice.
The largest financial pyramid in the Stock Generation network was organized by S. Mavrodi. Under the guise of gambling in this pyramid, shares of virtual companies were traded. The scenario was somewhat reminiscent of the MMM project, however, on the website for many such companies there was a caveat: prices can go both up and down. This "game" worked for 2 years, the victims number from 300 thousand people to several million.
Mavrodi's MMM-2011 and MMM-2012 projects are also large-scale. A virtual currency "Mavro" was invented, the purchase and sale of which was carried out in the first project through the leaders of the levels - foremen, centurions, thousanders, etc. In the second project (called the "mutual assistance fund"), the participants themselves directly settled the accounts. When the influx of deposits began to decline, delays in payments began to be noted, cases of theft of money from the system and the pyramids were closed. Mavrodi announced a restart several times, but there was no longer any confidence in him and the scale of the following projects was much smaller.
Among active Internet users, the NewPro pyramid is known, offering to buy a key for 99 rubles and attract 3 newbies. Next, a second level key is bought. However, reaching the coveted level 28 is unrealistic. This will require more than 20 trillion people. Pyramids with a similar structure: SuperProgik, Power MLM, MoneyTrain.
Among the variety of online pyramids, HYIPs and seven “magic” wallets stand out in separate categories.
HYIPs are also pyramids
High-yield investment projects under the financial pyramid scheme are HYIPs (hype projects). They justify their interest by investing in shares, mutual funds, trust management, but they can simply remain silent about their activities. There is an opinion that investing in HYIPs is one of the most profitable types of income with proper investment. On the Internet, you can even find articles where experienced participants in these projects talk about the correct investment strategy in order to “leave the game in time” before the hype closes and at the same time earn money.
In essence, all online pyramids go through the same lifecycle stages as their offline counterparts. Money is transferred from the pockets of some to the pockets of others, and no other activity is carried out. Therefore, there are people who really make a profit from such investments. But you need to understand that this happens at the expense of other participants, whose total contributions are always greater.
There are websites of venture companies - investments with a high level of risk - companies that are really engaged in investing money in risky and high-yield financial instruments (such as Forex). In contrast, HYIPs have the following features:
- colorful design of the resource and excessive advertising about the need for investments and a guarantee of return;
- profitability is promised at 0.5–10% per day, which is an unreasonably high rate, however, there are projects that offer 15% per month and this feature is not applicable to them;
- fictitious objects of investment or their absence;
- there are no company data (address, phone number, management), licenses, official registration and other documents, or they may be fictitious;
- a complicated scheme for generating income, the essence of the project is not clearly clear.
To conduct financial transactions, HYIPs offer participants electronic payment systems Perfect Money, Bitcoin, Payeer, Qiwi and a number of others that do not require identification. Most HYIPs do not work with WebMoney. By income level, all HYIP projects are divided into 3 categories:
- Low-yielding financial pyramids. They exist from 1.5 to 3 years and offer relatively low rates - up to 15% per annum per month (up to 0.5% per day). They are characterized by a well-thought-out pyramidal scheme and large-scale advertising. Very similar to legitimate investment programs associated with asset management.
- Mid-income financial pyramids. They exist from 6 months to 1 year and offer a yield of 15–60% per annum per month (up to 3% per day). They are quickly untwisted, but they also reach the peak of popularity very soon.
- Highly profitable financial pyramids. They work 2-5 weeks and offer rates above 60% per month (over 3% daily). They have aggressive intrusive advertising like “Sign up soon and get a lot of money!”, “Hurry up, such rates are only for 1 month!”. They close unexpectedly and try to attract as many new investors as possible.
In addition to the organizers of such projects themselves, so-called referrals play an important role in the system. They spread the word about the new project and encourage netizens to become a member. The success of the project largely depends on their actions. The creators of HYIPs work with these "agents" through affiliate programs, that is, they charge "refers" a certain percentage of investors' deposits. The distributors themselves are trying to advertise the HYIP project in social networks, forums and blogs in more detail and in more detail. Often, investors are offered to agitate the hype themselves and participate in the referral program. This gives maximum promotion among online investors and a large influx of money.
For a certain time, the HYIP has been successfully functioning, and some of the investors receive the promised interest due to the growing popularity of the project. But there comes a time when the volume of cash payments begin to exceed the volume of cash receipts. The HYIP closes (scams) and all the money remains with the organizers.
Magic wallets - an ordinary financial pyramid
A potential participant is invited to send a small amount (within 10-70 rubles) to seven electronic wallets in the WebMoney or Yandex-money system. After that, delete one upper wallet, enter your own and post a message on 100-200 forums, message boards, sites where people are looking for work. It is believed that if everything is done correctly, the money will “fall like a bag”, because the following participants will send money to your wallet and also begin to promote information. In fact, this is an ordinary financial pyramid, moreover, uncontrolled.
There is no guarantee that the person who “pecked” at this will not write down their wallet numbers in order to “squeeze out” more for themselves. But even if all participants follow the instructions and only 5 people respond to the massive spam, the pyramid will grow to a gigantic size. These 5 participants will also attract 5 newcomers each, and the total earnings of the first person in theory will be 600–900 thousand rubles. By this time, there will be about 98 thousand participants in the pyramid. This figure is growing exponentially: after 2 levels, 2–3 million people will need to connect, then several tens of millions, then trillions, etc. It is clear that the entire population of the planet will cover only a few levels of such a pyramid.
Payment systems are actively fighting such messages up to blocking the wallet. Financial monitoring and security services track such spam and identify pyramid schemes within a few days.
Financial pyramids in Russia (list)
The first pyramids came to Russia after the collapse of the USSR. JSC "MMM" became one of the largest and most famous. The company issued shares in large volumes (about 27 million) and tickets (about 72 million). Investors were promised 500-1000% per annum. Powerful propaganda in the media led 10-15 million people into this financial pyramid. No documents were given to people. These "papers" were not allowed into free circulation, only the company itself could buy them back. The course of shares and tickets was set by the organizer S. Mavrodi himself.
Due to the hype, their cost increased rapidly and reached 125 thousand rubles. per share. In fact, these papers were not worth that much money. Rumors spread among investors about Mavrodi's problems with paying taxes and illegal business. The panic that began led to a sharp drop (more than 100 times) in the value of shares and tickets. In fact, they have become depreciated "paper". The office of JSC "MMM" was stormed by law enforcement agencies. Mavrodi was arrested and sentenced to 4.5 years in prison. In total, he managed to earn about 3 billion rubles. Subsequently, this man created other pyramids.
In addition to MMM, major financial pyramid schemes in the 90s and 2000s were:
- "Vlastilina";
- "Russian House of the Selenga";
- "Tibet";
- "Khoper-invest";
- "Rubin" ("SAN").
The number of victims in them was in the millions, the lost amounts of depositors ranged from several million to trillions of rubles. As a result, almost all the organizers received real terms of imprisonment, and only a few managed to escape.
Despite this, financial pyramids continued to exist in Russia. This is explained primarily by the desire of people to get "free" money, their gullibility and greed. The development of the Internet has also played an important role. Participation in such roulette is comparable to playing in a casino: someone will get a “piece of the pie”, but the owners will earn in any case, and most players will lose.
New financial pyramids include:
- SuperPiggy Bank;
- Eleurus;
- GO-Partner$
- MMM-2012
- MMM-2016;
- SuperProgik;
- Give1 Get4;
- SETinBOX;
- Recyclix;
- Credex and a number of others.
For the organization of pyramids in Russia, along with criminal penalties, administrative responsibility has been introduced (Article 14.62 of the Code of Administrative Offenses).
Financial pyramids and network marketing
With the development of the industry (MLM-business), financial pyramids increasingly began to disguise themselves as it.
The fact is that a multi-level structure can be found both in fraudulent schemes and in legal business.
But a closer look reveals significant differences. The network business is absolutely legal (according to the decision of the US court in 1979 against Amway) and is based on the creation of a network of consultants (distributors) to promote goods from the manufacturer to the buyer. Comparison of signs is presented in the table:
sign | Financial pyramid | Network marketing |
What is the entry fee for? | Fully or almost completely for payments to the upper levels of the pyramid, that is, to people who entered earlier | To receive a starter set of products for a consultant, training materials, brochures. In some companies, a certain amount (20-30% of the contribution) goes to reward sponsors (upper levels). |
Product Detail | Unclaimed, fake or overpriced | Quality products that people buy from time to time (usually cosmetics, cleaning products, dietary supplements, etc.). The largest players in the MLM business have a fairly large assortment and may include durable goods (filters, dishes, clothes). |
What the company offers | Unreasonably high interest rates in a short period of time. They may promise low interest rates, but do not mention the exact return on investment. The entry fee is often large. It is said that there is practically no need to work. | Part-time employment with a free schedule and, as a result, a small increase in the main income. In the future, it is possible to create a passive source of income (with a large and stable trade turnover), but this will not happen quickly. The amount of profit directly depends on the work of the consultant. |
Source of income | Entry fees for new members. The product serves only to cover up a fraudulent scheme. | The turnover structure of each consultant. The price of goods includes the profit of distributors (15–25%), which is distributed throughout the network. Simply connecting people without buying goods does not give anything. At the same time, the remuneration plan is designed in such a way that it is possible to get ahead of the higher levels in terms of income. |
Company profile | Official documents are concealed, forged or made for a figurehead who is far away. Information on websites is blurry and illogical. | All activities are carried out openly, many network companies have their own websites with detailed information (product properties, address, company phone number, trainings, etc.) |
Behavior of people agitating to join the company | Obsessive beliefs, emphasis on advertising and quick money. They demand to immediately give the money and often without submitting supporting documents (checks, credit orders). | A calm story about this type of business, an emphasis on personal consumption of products, studying the action and purpose of each product, mastering sales skills, making presentations, and communicating with people. A beginner can think before doing a network business (usually they give 2-3 days). |
What to do if you have already invested in a pyramid scheme?
First of all, you should calm down and soberly assess the situation. First you need to contact the office of the company where you gave the money or to the person who invited you. The chances of getting your hard-earned money back increase if you have documents confirming the receipt or transfer of money.
If you refuse to return, hint to the scammers that you plan to contact the police and the prosecutor's office. And if this does not help, then immediately contact these authorities. It is recommended to provide detailed information about the swindlers: the external signs of people, what product, what they promise, the name of the organization, the address of the office, etc. There is a possibility that by the time the law enforcement agencies begin to act, “businessmen” may hide.
Despite the illegality, financial pyramids will continue to be created, trapping gullible citizens. To recognize them, you need a cold calculation and understanding of the essence of the operation of pyramidal schemes.
Pyramids are certainly one of the most mysterious structures on our planet. Perhaps nothing can be compared with their grandeur and perfection of the executed plan. But only today comes the understanding that the meaning of these places of worship extends far beyond the concepts of official science - such as: tombs, "barns for storing grain" or even religious temples.
Many scientists agree that these buildings are the oldest receivers and transmitters of information. And there is obviously some truth in that. But most likely not all. The real possibilities and goals of creating these structures are much wider and more functional. It seems that these were also excellent power plants - they accumulated and generated electricity. energy due to their design and the material from which they were mainly built. Granite, marble, concrete slabs of silicon sand - served as resonators with external oscillations of the Planet and Space. A g linen, limestone, brick - were used as insulating material. If you delve deeper, then of course, at first a difference was created in the potential of more subtle energy plays - called high-frequency static / direct current. And only then, through transformer devices (which are depicted in many on the walls of the interior of some of the pyramids), they were fed to various technical devices for domestic and industrial purposes - from lighting lamps to electrolytic devices and sawmill-grinding equipment ...
By the way, at that time there was no need to use special wires for transporting electricity. energy. Transmitting-receiving resonators were used - having basically the same internal structure of matter and external shape. Substance - identical content + exact proportions metal alloys. Shapes - spheres, crosses, cubes, etc. - including pyramidal forms. But that's another story. Which we will talk about another time.
In the meantime, back to the topic of the pyramids themselves and their purpose.
So, according to another version, the pyramids were built as pyramidal lenses - to concentrate the output / input of energy from / from the Earth and Space. And they were not built randomly - but strictly along certain energy lines and crossings of their nodes.
So if we consider the Earth itself as a crystal, then the pyramids were built on the "tops" of the corners of this crystal. For example:
Simply put, the pyramids were built in order to stabilize the Earth's magnetic field. All the pyramids were located at certain points on the Earth in order to change the electromagnetic flow passing through them. In other words, the pyramid itself is nothing more than an ordinary lens that modulates the flows passing through it. Feeding the energy fields of the Earth and preventing the movement of the lithosphere.
Although, to be absolutely precise, the pyramids did not change the electromagnetic flow itself, but its gravitational and adjacent levels - being, as it were, a funnel with its wide part facing downwards to capture the Earth's gravitational radiation and concentrate radiation at the top. Here physical interactions take place, which are still little mastered by modern science. Academic scientists have yet to deal with this issue, since it is customary in the scientific world to ignore the facts if they cannot be explained yet. And by the way, the pyramids were not necessarily built from start to finish. Often, a suitable elevation was used, which was lined with the necessary building and installation material - giving it the desired pyramidal shape.
And it is worth SEPARATELY EMPHASIZING A VERY IMPORTANT POINT: most of the pyramid complexes are absolutely exactly tied to the main "reference points" of the constellation Orion (most often - to the belt of Orion). And this gives some researchers reason to insist on the theory of "Orion enslavement of the Earth." And already in this version, the theory of the Planet unbalanced by the pyramids contradicts the opinion of those who insist on the stabilizing role of the same pyramids.
As always, the truth seems to lie somewhere in between. That is, the pyramids were built. in its various forms, for all purposes - at the same time: and as capacitors - power plants - energy transmitters; and as receivers and transmitters of information - both within the Earth and near and far Space; and as stations for body rejuvenation and organ regeneration; and as teleportation stations for objects and bodies of the people/gods themselves. And this was a ubiquitous phenomenon in ancient times.
Therefore, the pyramids were built not only in Egypt. They were built and, to varying degrees, preserved throughout the world. Both on the surface, and underground, and under water. And even on other planets and their satellites.
And in support of all of the above, I will give photos of specific artifact objects - pyramids - on different continents - in different countries of the world:
And let's start our journey around the world:
As expected, for an aperitif - the already well-known pyramids of Egypt:
Pyramids in Numibia (Sudan):
Many other images of pyramids in Egypt and Africa
Pyramids in Teotihuacan, Mexico
"State of the City of Serpents" - the pyramids of Kalamkul in Mexico
Altun Ha Pyramid - Belize + Great Jaguar Temple - Honduras
Grand Pyramid + pyramidal complex of Machu Picchu in Peru...
Now let's move to the other side of the world. Pyramids in Europe:
Bosnia. Mount Visocica - Pyramid of the Sun
Pyramids in Romania:
Pyramids in France:
And in many other parts of Europe -
And few people know that there are ancient pyramids in Russia:
Siberia
Altai, Pyramid of Sartiklai
Ural...
Kamchatka... + Baikal
Chukotka + Kola Peninsula
Crimea...
And here is video evidence of the presence of ancient pyramids in Russia -
Now let's turn our attention to Asia and take a look at the local pyramids:
Tibet + India
Indonesia + Cambodia (Kampuchea)
What do we have under water?
Underwater pyramids of Japan - Yonaguni...
Underwater Pyramids of the Atlantic Ocean and the Caribbean Sea:
A few videos on this topic:
Pyramids of Atlantis
Underwater pyramids of North America
Underwater pyramids of China
===========
Well, and quite unexpectedly - the pyramids in Antarctica:
VIDEO: Pyramids of Antarctica
=========
And finally, let's arm ourselves with a telescope and take a close look at the near space:
Lunar surface + magnification
..
VIDEO: Pyramid and the remains of buildings on the moon
VIDEO: Traces of an ancient civilization on the moon
========
And this is Mars:
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The concept of "financial pyramid" is familiar to many and everyone has their own opinion on this matter. In this article, we will look at all aspects of the pyramids, what are its signs, talk about how not to fall for the tricks of scammers, how economic fraud schemes have evolved in the 21st century.
1. What is a financial pyramid in simple words
Financial pyramid(Eng. "Financial Pyramid") is a pseudo organization that promises high returns to investors and even pays it to early investors. However, payments are made at the expense of new depositors. As soon as the influx of money ends, everything collapses and the organization closes. It is also called a scam.
Of course, we can say that the organizers of this type of activity are fraudsters and criminal punishment is provided for this. The only reason these old scams come up and work is the greed of ordinary citizens who want to make money fast. Plus, many simply do not understand where and how the income from money is taken, so they are ready to believe everything they say. And the operators of financial pyramids hang a bunch of noodles and psychologically put pressure on you.
Financial pyramids have become more perfect in our time. They serve a good and profitable offer, only behind the "empty" wrapper. Usually it can be something like a "startup" that raises money. However, the project has nothing but beautiful advertising behind it.
Time goes by, and the pyramids are only getting bigger. All this is due to the development of the Internet and ease of investment. Everything is done quickly and without leaving home (online). The speed of decision-making in this case plays into the hands of financial pyramids. Many users do not understand much on the Internet and therefore trustfully read the project's advertising, trust the reviews. Although all this is either fake, or reviews of the lucky ones who managed to get into the ranks of the first customers. If you dig deeper, you can find out that on other forums, reviews will be different or absent.
The most famous example of a financial pyramid in Russia in recent times is MMM (Sergey Mavrodi). In just one year, 1994, this organization attracted millions of people, and then failed miserably. As a result of this project, the finances of a very large number of gullible citizens have suffered. Mavrodi was in prison for a long time and did not admit his guilt. After that, he again took up the old ways and created several more fraudulent organizations.
2. Types of financial pyramids - how to identify scammers
2.1. One level pyramids
One-level financial pyramids are also called the "Ponzi scheme" (for the first time it was he who implemented this approach a long time ago). The main idea here is that you deposit money at high interest rates. Where does the money come from? Most often, investment projects or Forex trading can be called activities. At the same time, it is impossible to somehow verify their activities and real results. You can only get their imaginary reports.
Although in Forex you can really earn 10% in just a day. Perhaps even the next day it will also turn out to be in the black. However, it is impossible to consistently receive such a profit.
In such organizations, initial payments go either at the expense of the organizers or at the expense of new contributors. Thus, the pyramid is growing rapidly, acquiring positive reviews. Indeed, there are payments. Where is the income from? So here is a nice report on the work of the company.
With payments, such a company may have even favorable times. Indeed, many investors reinvest their income and do not withdraw profits. In short, many do not even withdraw interest. So it was with fx-trend and mmcis, which lasted for more than one year. The end comes at the moment when the influx of new investors ends, and the old ones begin to demand their money back.
The most important sign that this is a pyramid is a high stable percentage of profitability. It is impossible to earn so much money every month while being stable. However, they are trying to convince us of the opposite and inexperienced people are being led.
The lifetime of single-level pyramids can be up to 2 years. In rare cases, there are more.
This is how MMM and Khoper-invest acted.
The largest financial pyramid scheme is the Madoff scam from the United States. The organization was called "Madoff Investment Securities" (LLC). For more than 10 years, he has been attracting depositors' money and paying interest up to 15% per annum. During the 2008 crisis, the bubble burst. There were no new investors and the whole scam was revealed. The total amount of damage amounted to 17 billion dollars.
Note
Often such organizations are called "HYIPs" (hayp).
2.2. Multilevel pyramids
Income comes from attracting new members. For joining some dubious organization, they take a fee (small in order to attract as many segments of the population as possible). There are many reasons to make a donation. For example, you become the unique owner of some products, information, etc. that can be sold.
To make a profit, you must either sell the goods, or simply attract new participants and you will "drip" a reward from their contribution.
The life span of such pyramids is less and rarely exceeds 6 months.
3. Signs of a financial pyramid
In the 21st century, financial pyramids have learned to disguise themselves well as investment funds, projects, startups and other organizations. However, they have common features for all by which they can be calculated.
What are the signs of a financial pyramid
- Promises of high returns. Promising large and stable interest is the very first sign. Even the best traders in the world cannot consistently trade on such a big plus.
- Lack of company history. All pyramid schemes are very young pseudo-companies. According to statistics, their lifespan is from 6 to 12 months.
- Motivated to invite new members. There may even be training for this. It's like recruiting to get more money.
- Lack of documents. It is unlikely that such organizations will have at least some documents.
- Lack of clear development plans.
- Requirements to invest money faster. They don't give you time to think. To help you make a decision faster, they can offer special bonuses.
- Persistence of the organizers. You will be told "you don't want to multiply your capital", "what a fool you are", etc. These are specially trained people who press these questions. Under pressure, some agree to invest immediately.
Many people mistakenly say that Bitcoin is a pyramid scheme. However, no one thinks that:
- Bitcoin does not promise any profitability
- No one is forcing you to buy it.
- There is a real community behind Bitcoin
If an asset is growing in price, this does not mean that it is a pyramid scheme. Shares of many companies are also rising in price. Yes, that's a long way to go for examples. The dollar in 2014 rose from 30 to 80 rubles at its peak. But no one said that dollars are a pyramid scheme.
4. How not to become a victim of financial pyramids
With common sense and composure, you can easily avoid contact with scammers with their unique offers to invest in financial pyramids. So, first of all, ask yourself the following questions:
- How long has the project been in existence? There are very few pyramids. Therefore, if the history of the organization is less than 2 years, then you should be wary.
- What is the expected high return? Even steep mutual funds are not able to provide a stable yield above 12% per annum, then how does an organization get such opportunities? Let them try to explain, show examples of their work. Speaking about trading on the stock exchanges, they will try to hide everything. In this case, stay away from them, because if the return would really be 30% per month, then why would they need other people's money? They would have become billionaires in a year and so.
- Show persistence, rush? Hang up and don't think. No normal organization will be persistent and rush you.
- Ask about licenses and ask them to provide you.
5. What to do if you invested in a pyramid
You have invested in a financial pyramid - what to do now? In fact, things are of course unimportant. Because the money is held by third parties and it is not a fact that they will return it to you.
In any case, immediately go to them and say that you want to return your deposit. If they refuse, then say that you will contact law enforcement agencies. In this case, the chances of getting your money back increase dramatically.
Not always everything ends well and you manage to get your money back.
6. Is it possible to make money on a pyramid scheme
On the Internet you can find many articles about how people make money on a pyramid scheme. The main idea is to search for young "HYIPs" (sites), invest money in them and withdraw in 1-3 months. The result is income in the form of promised interest. In such a short time, the site does not have time to close and you can have time to return your money.
I can't advise you to do this kind of thing, because it's a risky game. You trust money to strangers and even after a short time they can "throw".
There is no point in investing big money in such a project, and it makes no sense to waste time on trifles. Moreover, you will have to worry about it.
See also an interesting video: "what are financial pyramids":
A pyramid scheme is a money scheme, and the profit here is achieved by constantly attracting fresh investors, and not by investing in income-producing assets. For its monetary prosperity, the pyramid issues securities, as they are the most liquid and very convenient instrument. If the size of the infusion of finance into the system is less than the amount of income payments, then we are talking about a pyramid scheme.
Signs of a financial pyramid
The idea of creating a monetary scheme was born in France and England in the seventeenth century. In Russia, it first appeared in the 90s of the last century.
Signs of financial pyramids
- Illegal (lack of license).
- Hiding financial information.
- Redistribution of funds between project participants.
- The need to pay an entrance fee.
- Earnings of a project participant registered earlier are always higher than those of the lower one.
- Fixed interest payment guarantee.
- The place of registration of the company is somewhere on the islands.
8 famous pyramid schemes on the Internet
Let's take a look at the most common monetary mechanisms currently operating on the Internet.
- MMM (founder - Sergey Mavrodi)
JSC "MMM" became the most massive pyramidal company. The idea began to unwind with the help of advertising in the media. The monetary mechanism is rapidly developing due to the promises of the joint-stock company to pay huge dividends.
The founder of the project, Sergey Mavrodi, is turning into Russia's leading entrepreneur. Shares soar in price from 25 to 125 thousand rubles per unit, people are in a hurry to buy them. About 15 million people become contributors. The system collapsed in 1994. People are already paying 1,000 rubles for a share, not 125,000.
Sergei Mavrodi is arrested. However, a week later, a new pyramid appears. History repeats itself: stocks rise, fall, points close, shareholders panic.
- Legion financial group
FG "Legion" is an international consortium of companies. Capital management is carried out by attracting investments, while using the funds of the accounts of banks with a rating of AA-AAA, which are included in the world top 25 (WER).
The financial group uses the Placement Program "PPP" (private placement programs), guaranteeing monthly interest payments according to the tariff plan for all investors. Interest is paid from the accounts of legal entities.
Legion has an affiliate program, due to which the investor also receives a percentage of the attracted capital. There is also income without own investments.
Financial pyramid schemes are prohibited in many countries of the world. Many tragic stories are associated with their activities. In most cases, this is a scam that ordinary citizens suffer from. About schemes of work of financial pyramids read the article.
What is a financial pyramid
A financial pyramid is a way for its participants to profit by constantly attracting new financial resources. The creators of the pyramids register them as commercial enterprises whose activities are aimed at obtaining funds for the development of a project. If the business plan fails, then new members are recruited to pay income to members of the organization.
During the entire period of the pyramid scheme, only those who joined the organization at the initial stage of the project manage to receive the promised income. After the funds are no longer enough to pay dividends to all other members of the community, the company declares itself bankrupt. The organizers prefer to hide from justice and their former associates.
The main signs of a financial pyramid:
- Lack of product.
- Profit by attracting other participants.
- There is a product, but no one uses it.
- Overpriced for a wonderful product.
- The earlier you join, the more you get.
- Incomprehensible dividend plan.
- No one knows leadership in person.
- Registration in an offshore zone.
- Endless motivation.
The scheme of the classic financial pyramid is as follows:
- People with a certain level of education and organizational experience come up with a financial project aimed at raising funds from its participants.
- The collected money does not go to production, investment or other business. The first proceeds are spent on advertising to attract even more members. Part of the finance is allocated to pay income to the organizers and equity holders who joined the project at the very beginning.
- As the number of participants grows, the financial income of the organizers increases, and those who came later are asked to wait a bit. Their income depends on the size of the contributions of the next members of the community.
- Thus, upstream investors receive their dividends from downstream investors. The longer the existence of the pyramid, the greater the number of its members actually receive money from their investments.
- After the influx of new investments dries up, the organizers of the enterprise hide with money, leaving their like-minded people with nothing. A minority of members of the financial pyramid remains with a profit, and the majority - without invested funds.
The first financial pyramid
The first financial pyramid was created in the USA at the beginning of the 20th century. It was organized by the enterprising Charles Ponzi. After moving from Europe to America, he tried in vain to get rich. After several unsuccessful attempts, Charles accidentally came up with the idea to try to benefit from the difference in the exchange rates of different countries.
The basis of the advertising campaign of the new Ponzi enterprise was the difference in the cost of a postage stamp in Europe and in America. In those days, the Universal Postal Union sent letters to recipients with coupons enclosed in an envelope. They could be exchanged for a postage stamp to send a return letter. In the USA, such a brand was much more expensive than in other countries. Having sent a large number of letters, for example, from Europe, and having paid a certain amount for postage stamps, it was possible to enrich themselves on their price difference.
But this business required large financial costs and well-established connections in the sale of postage stamps received in exchange for coupons in America. Charles Ponzi went the easy way and came up with a pyramid scheme. He organized the acceptance of deposits from the population, promising income from the operation with postage stamps. The details of the project did not interest the participants. The first investors in a month gained 100% profit. The stream of wishing people poured in like a river.
As long as the proceeds were in large quantities, Ponzi could pay the depositors their dividends. As soon as the inflow of funds came to naught, the whole scheme of the functioning of the pyramid was revealed. For fraud, Ponzi spent several years behind bars.
Lou Perlman's scheme was to create large corporations and companies only on paper. It all started in 1981. Lou issued shares of non-existent firms and placed them on the stock exchange. The buyers were not only private individuals.
For more than 20 years, he sold shares in these companies to investors and large banks. After the scheme came to light, Lu tried to run away from justice, but was sentenced to 25 years in prison and a $1 million fine.
Examples of financial pyramids abroad
- The founder of the financial pyramid in France in 1717 was the British John Law. He issued more than 200,000 shares of 500 livres each. In addition to cash for his shares, he took government bonds, which in the 18th century in France were held by a significant number of citizens. As a result, over time, Law became a creditor to the French court. The scope of his activities was enormous. In 1718 Law became French finance minister and founded the first state bank. When at the end of 1720 the bondholders did not receive the promised dividends, they rushed to withdraw all their savings and precious metals from the bank. The collapse of the government was inevitable. Shareholders were ruined, and the state suffered severe financial damage. John Law's property was used to pay off debts.
- For more than 15 years, American billionaire Allen Stanford has used a scheme to sell deposit certificates that guarantee a high percentage of income. The Stanford Bank issued large quantities of unsecured securities, which, because of their incredibly high interest rates, were wildly popular.
The banker embezzled more than $7 billion. In 2012, the trial of the fraudster took place. The prosecutor demanded 241 years in prison as punishment. The court sentenced Stanford to 110 years in prison. - In 2000, Kazutsugi Nami started its activities. Investors invested in the project at a 36% annual return. The pyramid functioned successfully for 7 years and suddenly stopped paying dividends. The founder of the organization received 18 years in prison.
Hidden financial pyramids are a new threat that hangs over gullible investors. The scheme of such a pyramid is similar to the usual one. The only difference is that the contribution of a newly joined member of the organization is disguised as the purchase of a product.
Such a scam makes sense only when the camouflage product costs a penny, but they sell it hundreds of times more. The activity of the pyramid continues as long as the number of victims becomes significant.
Rating of financial pyramids
- Bernard Madoff caused $65 billion in damages to millions of individuals and businesses.
- "MMM" by Sergei Mavrodi. Deceived - 10-15 million. The amount of damage is up to 8 billion dollars.
- Allen Stanford. Losses of investors - about 8 billion dollars. Individuals and companies from 136 countries were affected.
- Kazutsugi Nami. In total, the founder of the organization raised 128.5 billion yen. 36 thousand investors were deceived.
- Wang Zhengdong. 10 thousand people suffered. $417 million stolen.
- Lou Pearlman. 250 people were deceived. The damage amounted to $100 million.
Are there reliable financial pyramids
Financial pyramids cannot be reliable by definition. They exist only on contributions from participants, not using the money received for the development of any business. Even if this is the case, then the profit from investments goes into the pocket of the founder of the pyramid.
It is easy to distinguish a pyramid from a really reliable investment company. Main differences:
- masking the entrance fee;
- the promise of marginal returns on deposits;
- aggressive advertising;
- unavailability of information about the investment of the collected funds and the receipt of income;
- the need to invite another participant "for yourself".
How much can you earn on financial pyramids
The essence of any financial pyramid lies in the constant invitation of new participants. Each of them, before making any profit, must invest a certain amount as a contribution. This money is income for previous invitees.
To make a profit yourself, you need to bring along other members of the organization. They will serve as a source of funding. The closer the link of the pyramid is to the top, the more significant its income. As for the founder of such a project, his income is incommensurable with the profit of any of the members of the group.