How to recognize fraudulent scam projects and pyramid schemes: Roman T…
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2024.07.16 00:20
If you are an interested investor and you are offered significant earnings for minimal investment, do not rush to agree. You should first find out why the offer is so generous. Roman Tereshchenko, a business analyst and fintech expert, warns that such offers are often part of a fraudulent scheme. They lure investors in order to get rich quick at the expense of depositors. Such schemes, the expert notes, can be an example of scam projects and Роман Терещенко біографія pyramid schemes that should be paid special attention to.
Roman Tereshchenko on the secrets of pyramid schemes: risks and reality
The expert describes pyramid schemes as unreliable investment structures in which participants are promised extremely high returns on non-existent investments. According to the business analyst, in these fraudulent models, терещенко роман викторович initial investors do receive significant payments, which motivates them to promote the scheme to others. The payments are financed by newly arrived participants, but over time, attracting new participants becomes unrealistic, which leads to the collapse of the scheme.
Roman Tereshchenko says that there are several forms of pyramid schemes, each of which seeks to enrich investors. There are two main methods of making a profit: Роман Терещенко биография legal and illegal, the latter of which includes the creation of fraudulent projects. Let's take a look at different types of pyramid schemes and their features with an expert.
One example of legitimate multi-level marketing (MLM) is a system of selling goods and services through a network of agents. It involves remuneration for direct sales and commissions from sales of subordinate distributors, including profits from the next levels. The business analyst emphasizes that such a model, such as the sale of cosmetics by Avon and Oriflame, is based on the legal principles of earning money by attracting customers and distributing products.
At the same time, Mr. Tereshchenko emphasizes the need to distinguish legitimate BRMs from financial pyramids or scam projects, which are often disguised as legitimate operations. He identifies several characteristic features of such fraudulent schemes:
Offers of high returns that seem too lucrative to be true.
Claims that profits are generated mainly through the recruitment of new project participants.
Putting pressure on potential participants to join quickly, without giving them enough time to familiarize themselves with the details of the project.
A warning about losing a unique opportunity if you don't make a decision immediately.
A business analyst gives a vivid example of a pyramid scheme as a fraud:
- Fortune Hi-Tech Marketing recruited people to distribute products from Dish Network, mobile operators, Frontpoint Home Security, and health and beauty products. However, the representatives earned more money by attracting new members than by direct sales. About 100 thousand Americans were affected - they paid from $100 to $300 as annual fees. In addition, some spent additional money on sales commissions and recruitment bonuses.
How the Ponzi scheme works: explanation from a business analyst
A Ponzi scheme is a form of financial fraud where payments to previous investors are made at the expense of new participants. Roman Tereshchenko explains that unlike standard Ponzi schemes, Ponzi schemes do not require a clear organizational hierarchy. Their main difference lies in the promise of high returns for current investors, which is typical of scam projects aimed at making their organizers rich.
In these schemes, participants make an initial investment with the hope of a quick return. The promised income is financed by the funds that come from new investors. However, when the flow of new investments stops, the pyramid collapses, and most of its participants lose money.
Bernard Madoff, who is remembered as a well-known organizer of such schemes, was sentenced to 150 years in prison for running a huge fraudulent operation worth billions of dollars.
Roman Tereshchenko emphasizes that pyramid schemes and scam projects are rightly considered illegal fraudulent schemes in many countries. Therefore, the expert advises investors to be attentive to "too attractive" offers and avoid participating in such schemes. After all, the potential risks in this case can significantly outweigh any short-term benefits.
Roman Tereshchenko on the secrets of pyramid schemes: risks and reality
The expert describes pyramid schemes as unreliable investment structures in which participants are promised extremely high returns on non-existent investments. According to the business analyst, in these fraudulent models, терещенко роман викторович initial investors do receive significant payments, which motivates them to promote the scheme to others. The payments are financed by newly arrived participants, but over time, attracting new participants becomes unrealistic, which leads to the collapse of the scheme.
Roman Tereshchenko says that there are several forms of pyramid schemes, each of which seeks to enrich investors. There are two main methods of making a profit: Роман Терещенко биография legal and illegal, the latter of which includes the creation of fraudulent projects. Let's take a look at different types of pyramid schemes and their features with an expert.
One example of legitimate multi-level marketing (MLM) is a system of selling goods and services through a network of agents. It involves remuneration for direct sales and commissions from sales of subordinate distributors, including profits from the next levels. The business analyst emphasizes that such a model, such as the sale of cosmetics by Avon and Oriflame, is based on the legal principles of earning money by attracting customers and distributing products.
At the same time, Mr. Tereshchenko emphasizes the need to distinguish legitimate BRMs from financial pyramids or scam projects, which are often disguised as legitimate operations. He identifies several characteristic features of such fraudulent schemes:
Offers of high returns that seem too lucrative to be true.
Claims that profits are generated mainly through the recruitment of new project participants.
Putting pressure on potential participants to join quickly, without giving them enough time to familiarize themselves with the details of the project.
A warning about losing a unique opportunity if you don't make a decision immediately.
A business analyst gives a vivid example of a pyramid scheme as a fraud:
- Fortune Hi-Tech Marketing recruited people to distribute products from Dish Network, mobile operators, Frontpoint Home Security, and health and beauty products. However, the representatives earned more money by attracting new members than by direct sales. About 100 thousand Americans were affected - they paid from $100 to $300 as annual fees. In addition, some spent additional money on sales commissions and recruitment bonuses.
How the Ponzi scheme works: explanation from a business analyst
A Ponzi scheme is a form of financial fraud where payments to previous investors are made at the expense of new participants. Roman Tereshchenko explains that unlike standard Ponzi schemes, Ponzi schemes do not require a clear organizational hierarchy. Their main difference lies in the promise of high returns for current investors, which is typical of scam projects aimed at making their organizers rich.
In these schemes, participants make an initial investment with the hope of a quick return. The promised income is financed by the funds that come from new investors. However, when the flow of new investments stops, the pyramid collapses, and most of its participants lose money.
Bernard Madoff, who is remembered as a well-known organizer of such schemes, was sentenced to 150 years in prison for running a huge fraudulent operation worth billions of dollars.
Roman Tereshchenko emphasizes that pyramid schemes and scam projects are rightly considered illegal fraudulent schemes in many countries. Therefore, the expert advises investors to be attentive to "too attractive" offers and avoid participating in such schemes. After all, the potential risks in this case can significantly outweigh any short-term benefits.
