What are "High Yield Investment Programs"?
New communication tools such as the World Wide Web or email not only help legitimate businesses to communicate with customers worldwide, they can also abused by criminals to find victims worldwide. The internet has been hailed as the "death of distance" but that also means it has brought crime to your desktop.
One type of scam are so called "High Yield Investment Programs". They promise interest rates far in excess of rates offered by time deposits at banks or Money Market Funds. As an investor you should be aware that any type of investment that promises double digit annual interest rates or higher is speculative in nature and involves the risk of losing a part or all of the investment.
HYIPs are basically pyramid schemes (also known as "Ponzi" schemes), where deposits from new investors are used to pay interest to earlier investors, so they will recommend the scheme to others to keep the fraud growing in size, until the criminals decide it's time to take the money and run. Other HYIPs never pay interest in the first place, the interest only exists on paper as the deposit is directly pocketed by the criminals as profit.
Some HYIPs mention well known institutions such as the US Federal Reserve, International Monetary Fund, World Bank or International Chamber of Commerce (ICC) to bolster credibility, but the ICC has specifically issued a warning about such schemes.
Example: "HeraldFunds LLC" (heraldfunds.com)
On its website it offers various invest schemes, ranging from 21.8% per week to 402% in three months. The company claims to have been founded in 1996, yet its website was created only in December 2004. The postal address in the domain registration does not match any of the addresses listed on the website (these are based in St. Vincent and the Grenadines, in Costa Rica and Panama). These guys do not like to meet their customers: "Direct access link via real land lines, Backup contact, Written agreements, Character references, Telephone meeting, Personal meeting available only for old members."E-Gold Investments www.heraldfunds.com Easy. Safe. No Risk. Insured by the SwissSavings
Request: heraldfunds.com connected to whois.easydns.com [18.104.22.168:43] ... Registrant: HeraldFunds Inc. 25 Str. 24 1st Floor Ferdec, GB 45892 GI Domain name: HERALDFUNDS.COM Administrative Contact: Muller, Thomas firstname.lastname@example.org 25 Str. 24 1st Floor Ferdec, GB 45892 GI +5.389988765 Technical Contact: Muller, Thomas email@example.com 25 Str. 24 1st Floor Ferdec, GB 45892 GI +5.389988765 Registrar of Record: easyDNS Technologies, Inc. Record last updated on 20-Jan-2005. Record expires on 04-Dec-2005. Record created on 04-Dec-2004. Domain servers in listed order: NS1.NET4GOLD.COM 22.214.171.124 NS2.NET4GOLD.COM 126.96.36.199 Domain status: REGISTRAR-LOCK
"Garner Finance LLC" (GARNER e-gold: 1769185) promises 15% interest per week, which no legitimate investment can guarantee: Either it is a speculative investment and then it can't guarantee if it will make a profit at all, or it's not and then will earn single digit annual interest.
The website lists a French postal address, but the domain is registered using an address in Sweden and hosted on a server in Russia. The website bears a 1992 copyright notice, as if the company had been around for over a decade but in fact the domain was only created on 2005-01-18. The site is only a couple of months old.
Emails from the company originate from an Internet Service Provider in Latvia.
Organization: GARNER PROPERTIES Thomas Boucher Willington 12 Raivo, 1014 SE Phone: +46 4571791 Email: firstname.lastname@example.org Registrar Name....: Register.com Registrar Whois...: whois.register.com Registrar Homepage: http://www.register.com Domain Name: GARNER-PROPERTIES.COM Created on..............: Tue, Jan 18, 2005 Expires on..............: Wed, Jan 18, 2006 Record last updated on..: Wed, Jan 26, 2005 Administrative Contact: GARNER PROPERTIES Thomas Boucher Willington 12 Raivo, 1014 SE Phone: +46 4571791 Email: email@example.com Technical Contact, Zone Contact: Register.Com Domain Registrar 575 8th Avenue - 11th Floor New York, NY 10018 US Phone: 902-749-2701 Fax..: 902-749-5429 Email: firstname.lastname@example.org Domain servers in listed order: NS1.AGAVA.NET.RU 188.8.131.52 NS2.AGAVA.NET.RU 184.108.40.206
Other HYIP websites: