D stands for Disappointment

It is June 30, the last day in June and members of at least two(2) Alternative Investment Clubs have been left bitterly disappointed. OLINT, and its affiliates, and MAY DAISY have sorely disappointed their members and for every day that goes by, hope fades rapidly. Only the those who seem to have connections or unbelievable faith, stand unshaken. 

OLINT Failing and more excuses

The David Smith led OLINT, despite elaborate payment plans to pay outstanding interest and encashment request for January – April, has failed to do so in the main. There have been a few fortunate persons but from all indications the majority have been left like dogs panting for a drink of water with no watering hole or pan in site. Indeed even high level meetings were held Sunday June 22, 2008, in an attempt to quiet the growing disquiet among big players, including directors of affiliate clubs. The latest excuses center around more due diligence and broker problems.

July 2, 2008 has strangely become the new marker for OLINT when it is alleged that US $240/250 million  should be released to OLINT to facilitate payments. Based on the limited information available it appears that payments have been again postponed, once again, and the June 27 deadline has now been apparently shifted to July 25/28, 2008.

OLINT faces a serious challenge, as some requests made in May and June are also now due, so in effect January to June 15 requests and interest payments will become due in July. 

May Daisy in cycle but no bloom

May Daisy Cycles seem to be carrying persons in circles. As one season changes to another the expected blooms have not occurred. While there are mutterings of a person or two getting payments, of the very few that have gotten something back, most have received only a small fraction of what they requested or are due. For those that expected Daises to bloom by now, the disappointment has been to see dead or dying daisies in Garden.

On May 31, May Daisy officially closed all Jamaican accounts, citing the aggressive nature of its Jamaican members but what did they expect. Persons not getting paid to simply keep quiet and behave like “lambs to slaughter”? A recent release by May Daisy’s management indicated that there might have been a change of Management but the details are sketchy. 

The question is how many more broken promises, how many more excuses and possibly lies will be told. We are now into the Summer months, and many members are finding their plans blown away by the storms of disappointments. Our advice to people, save yourselves further disappointments, DO NOT PUT ANY MORE MONEY IN OLINT OR ITS AFFILIATES OR ANY AIS at this time. Think and check before you invest. Memories of Cash Plus and Higgins Warner still linger.

We know what ‘D’ stands for, the question is what does ‘S’ stand for?

Related

• OLINT Failing
• Payment Delays and Problems abound
• May Daisy – No comfort for investors
• The value of regulation and disclosure

Investing is for gains not for losses

There is this nonsense going around about “I invest what I can afford to lose”.

Which “good” investor, invests to lose? What really is investment? Let us define this:

Investing: the act of committing, laying out money or capital in an enterprise with the expectation of profit.

Money is invested with an expectation of profit. So one expects to make a profit from his investing activities, not losses.

The very act of investing calls for some of the following.

1. Careful analysis of the business within which one wants to invest.
2. Careful analysis of the sector within which one plans to invest.
3. Pouring over the financial records of the company you plan to invest in (ie stocks).

The idea is to make sure that the downside of investing is low, while the upside is great. Having done all the above does not however guarantee you profits, as unexpected acts could take place, which throws your plans off track. The goal however is to have done the your best to make sure the outcome is in your favour.

Afford to Lose

The latest buzzword for those “investing” in the Alternative Investment Scheme (AIS) of “investing only what you can afford to lose” is nothing more than rhetoric. If Olint or any of the AIS ever post a loss in any month after a string of monthly profits, we would all see these guys scrambling to get out.

At the end of every month these same folk are asking.

1. How much did Olint, Lewfam post this month?
2. When am I going to get my requested funds?

If they are like some investors that could really afford to lose it, then it really does not matter if they are every paid. I am sure that the AIS GUYS who read these blogs, and are not paying, would be thinking, these guys who invest with us can afford to lose their investments, so what is the big deal.

Words of Wisdom

Warren Buffet, one the world richest men of this generation, echos the words of wisdom from his mentor. The two key rules of investing given by Benjamin Graham should be held in high regard. The two rules are:

• Don’t lose money, and
• Don’t forget the first rule.

No real investor, invests with the intention to lose. One should seek to analyze, diversify and practice good risk management in order mitigate losses should they occur. Remember,  “Think and Check before you Invest.”

The value of regulation and disclosure

Some folks have sought to use the failures of a number or prominent companies to downplay the importance of the financial data produced by these companies.

They have even sought to suggest that the information is meaningless and will not help you to determine if the company is failing.

I know I have never sought to suggest that this published data and regulation will not prevent a company failing; instead I have maintained that they can help in identifying potential failure before it actually occurs.

Take a look the information, I have provided below.

Here is a company, which has been registered with both the NFA – National Futures Association as well as the CFTC – Commodities Futures Trading Commission.

FX FOREX LIQUIDITY LLC.

The company was brought before the courts by the regulatory agency – the CFTC, for falsification or misrepresentation of its financial records. The company was found to be undercapitalized from March 2007, but provided data to show otherwise.

What “saved” investors from greater losses were:

• The fact that they were regulated
• They had to produce financial data
• The regulator looked at the financial data and picked up that something was wrong.

See the following links

March financial data :

http://www.cftc.gov/files/tm/fcm/tmfcmdata0703.pdf

Then take a look at April data, and you will notice a big jump in the capitalization of the company( turns out to be a big fat lie).

April financial data:

http://www.cftc.gov/files/tm/fcm/tmfcmdata0704.pdf

CFTC takes action against FX FOREX LIQUIDITY.

Check this link for the complaint

Check this other link for the actual enforcement order(PDF)

Next: The receiver report

In addition a receiver was brought in at a later stage and what he found was a tale of woes at the company, ranging from poorly kept records to down right fraudulent conversion.

Stay tuned

OLINT Failing

 June 6-26 should have seen payments of OLINT members’ requests for January and February 2008 completed. Instead of OLINT ‘investors’ jumping for joy and punching fists and high fives, they are finding themselves on the edge.  In fact, June 23, 2008,  should have seen the the beginning of payments of those who made requests in March & April, 2008. The week has started with very interesting rumors surfacing.

Given the lack of transparency of David Smith led OLINT’s operations, it is invariable that they will fall victims to speculation and rumors. Now they, OLINT, have the power to change this but so far have done little to nothing the set the record straight.

The following statements are some of the rumors. We have no proof to any of the following.

1. US $80 Million dollars wired to OLINT is being held by TCI Regulators.
2. US $240/250 Millions dollars to the be wired to OLINT on or about July 2,2008. In summary, expect more delays in payments.
3. OLINT has at least US $750 million in account(s)
4. OLINT has just last week completed “Due Diligence” with a broker Oanda. 
5. Banks are now carrying out re-verification of Olint member accounts.
6. Sunday Evening (June 22, 2008 ) Meeting being help to quell discomfort among larger “investors”

Pretty much all hear-say so take it all with a grain of salt. The problem is that so many OLINT members have nothing else to go by and that is a fact.

What is also a known FACT, is

• That there have been delays in payments and non-payments.

We also know that the failure to stick to the the announced payment schedule has left many loyal OLINT supporters extremely disappointed, some sad and others angry. 

If the rumors above turn out to be true, more delays are inevitable. Based on the rumors, the critics of OLINT and other UFOs  are more than reasonable in their assertions that OLINT has crashed, if not crashing. 

The continued lack of transparency and lack of regulation certainly leaves the stench of SCAM hanging in the air. 

Related:

• Payment Delays and Problems abound
• Olint releases Encashment Policy
• How OLINT survived?
• Forex to PONZI

Payment Delays and Problems abound

Despite the annoucements of schedules,cycles and policy, the reality is that payment problems persists

• May Daisy: There has been delays, stories of changing management and questions of who is in charge.
• Olint: There have been delays already people are becoming edgy. The second batch of payments should have be completed on June 26, 2008.
• TCI FX: 0% return for May as allegedly no trading took place but people appear to have been paid.

Affiliate Clubs feeling the pinch

Also of concern is that rumours are surfacing that many affiliate/feeder clubs are having problems paying as they have not gotten paid by the source, allegedly Olint.

• Lewfam: Some members claim no payments since March,others got paid in May although some not the full amount requested. They also seem to have investments in other suspect schemes.
• UWIN ANtigua: Has told some persons that  there will be no payments until September 2008. If you look at the OLINT’s new encashment Policy you might see a relationship.
• Wealth Builders: They have been having problems with accounts where the investments is with OLINT . In this Observer report of  March 3, 2008, Olint run delays payments, members have been warned of delays

Returns falling?

Another interesting thing that is happening is that nearly all the that have not been paying have reported lower than usual returns for May. Returns have fell to the 4-5% range, far below members’  expectations. Whether the returns are real and existed in the first place remain the question as there simple no way to independently verify this. The returns for June will be of interest.

Deposited money not being acknowledged

Another worrying development is that a number of person who have allegedly wire money to one club in particular are not seeing those moneys credited to their accounts although their bank accounts have been negatively affected. In some cases the money is credited weeks or months later.

Documents Disappearing.

Another interesting thing that is happening is that documents are disappearing. The TCI FX website is no more, after briefly pointing to the Lewfam website. Whether this was an accident or not, it occurred. Documents no longer available via the web include

• TCI prospectus has disappeared with their website ( we have a copy)
• Willshaw’s Prospectus has also disappeared. (we have a copy)

Other Factors

In addition, the climate for unregistered financial organisations(UFOs) is tense and rightly so. The number of scams being uncovered across the world have made “investors” edgy.  The change in one club’s policy means a reduction in the number of accounts one person can hold. There also allegedly no need the middle man anymore which is putting the present middle men under great strain as they are now caught in the middle. Interesting times are ahead and we will keep watching.

Related

• Olint run delays payments(March 3,2008 article)
• TCI FX now Lewfam? (updated)
• May Daisy – No comfort for investors

Carlos Hill back in court?

Today is June 19, and Carlos Hill is should be back in court. Having failed to comply with the courts order or April 23, 2008 to declare his assets held in Jamaica and overseas. The order issued earlier but he was in jail. He received a new order on May 22, 2008 . If he fails to declare his assets he will sent to prison for 6 weeks

Interestingly a businessman has gotten the High Court to appont a receiver/manager to control Carlos Hills personal assets. We are not clear on how this relates to the previous order and if this businessman is the same businessman that got the order for Carlos Hill to declare his assets.

Related

• Receiver takes control of Carlos Hill’s Assets
• Hill could be back in Jail

May Daisy – No comfort for investors

This is the latest correspondence from May Daisy. Once again it is not saying much. An interesting quote is the following 

We assure you, too, that persons in cycle A are being paid. Despite what some of you may think you know, this club is quite large. We have prided ourselves on privacy and confidentiality – qualities we will always uphold. 

As usual there is now evidence. How many members are in the club? No one knows. How many Members are in Cycle A? You can read the rest correspondence below.

Trust in the Lord and lean not unto thine own understanding. But in all thy ways acknowledge him and he will direct thy path.”

Greetings Dear Partner,

Current Situation

Firstly, we must say we have received your various feedbacks on the closure. It was indeed a difficult decision for us, but, all things considered, we do believe it is the right one.

We have been saddened by this action far more than you can imagine, as we had a vision of empowering the ordinary man to pursue his dreams and, by so doing, building Jamaica from the bottom up. Building a Jamaica where, for once, we would be charting our own destiny. This, for now, remains only a dream and we are indeed saddened.

HANDLING PAYOUTS

There seems to have been some misunderstanding of the cycle allocations: this, we now seek to clarify. Each and every member is assigned to a cycle. This is so whether not the account is being closed. Any payment at all that a member is to get will only be done in that assigned cycle.

We indicated that we would have started updating the accounts in another two weeks, not completed the update. This process is now in progress and accounts are being updated. This is being done in cycles so the earliest cycles are updated first. We expect, too, that all accounts will be updated before the end of this month.

Once your account has been updated, on logging into your account, regardless of the status, you will see your designated cycle and the month end when that payout commences.

We assure you, too, that persons in cycle A are being paid. Despite what some of you may think you know, this club is quite large. We have prided ourselves on privacy and confidentiality – qualities we will always uphold.

Due Dilligence

As we are currently in the closeout phase, additional documentation will not be accepted.

Accounts for which documentation were submitted within the required period, but were previously not updated, are being updated now and this will be reflected on these accounts before the end of the month.

ONGOING RE-STRUCTURING

Gains Allocation

Further to the introduction of payout cycles, we are also adjusting the periods for the allocation of gains. Gains will now be credited to accounts on a quarterly basis.

Staffing and Personnel

As part of our on-going restructuring, we will be introducing a new Operations Team. We must take the opportunity to thank the present Director and her team for their most invaluable contribution. They have supported us well under extreme pressure and very trying circumstances, and to them, we say a most hearty and heartfelt “thank you” for a job well done. We wish them all well in their future endeavours.

Our Customer Service providers will remain in place until further notice, so there should not be any noticeable difference in that interface with you.

The new team will be introduced to you at the end of this handover phase.

Thank You

We thank you for your prayers, words of comfort and support during our time of bereavement. Thank you very much and we continue to rely solely on the Lord Jesus to carry us through.

(2 Corinthians 9 :6)

Remember this: The farmer who plants a few seeds will have a very small harvest. But the farmer who plants because he has received God’s blessings will receive a harvest of God’s blessings in return.

God bless you all,

Your Management Team

Lou Pearlman and his 20+ year Ponzi explored (pt 2.)

In Part 2 of Lou Pearlman and his 20+ year Ponzi explored, we explore who Lou Pearlman conned and more of the methods used. 

Who was conned?

During the period, even the established financial institutions were  conned. Banks conned into loaning money or providing a lines of credit to the Lou Pearlman or one of his entities included,

• Bank of America
• Washington Mutual 
• Mercantile Bank
• Integra Bank N.A.,
• American Bank of St. Paul
• First International Bank & Trust,
• MB Financial Bank NA, 
• Northside Community Bank
• First National Bank & Trust 
• and HSBC Bank

Master of Fake

In order to facilitate the SCAM Lou Pearlman became the master of fake. Here is a list of some of the fictitious organisations and documents

• Fictious Airline Company
• Fake Branch of German Bank
• Fake South Florida Accounting Firm called Cohen & Siege
• Fake accounting firm called “S. Kaplan & Co.”
• False audited financial statments prepared by  the above companies
• Fake Tax Returns
• Fake Business Documents
• Tried to create a Fake German Bank Seal
• Using the signature of a deceased former associate to stall repayment bids

Interestingly the Herald Tribune reports the following describing the accounting firm:

Those included hiring an answering service to pose as a South Florida accounting firm, Cohen & Siegel, which endorsed Transcontinental’s finances.

In the long run he defrauded over US $300 million from 

• Investors 
• Major Banks 

The investors where carefully selected and were primarily from these groups

• family
• friends and 
• The elderly.

From one Scam to another

When Transcontinental Airlines Travel Services went bust,  Lou Pearlman then started another company call Employee Investment Savings Account, that promised higher returns than traditional investments. This scam lasted between 2003-2006. During that period it collected

• US $118 million collected, 
• US$43 million returned 
• US $38 million to himself & pearlman enterprises

Investors, reassured that their investment was not only FDIC insured ( Federal Deposit Insurance Corporation) but backed up further with supplemental coverage from AIG and Lloyds of London, consolidated their entire portfolios into the one security, many handing over millions of dollars. Even those that deposited far less, often gave up their entire life savings based on outright lies and document-backed deceptions. ****

Lou Pearlman was sentenced by Senior U.S. District Judge G. Kendall Sharp to 25 years’ imprisonment on charges of conspiracy to commit an offense against the United States, money laundering, and presenting or using a false claim in a bankruptcy proceeding.

How Lou Pearlman managed to fool so many is the reason why we must all be careful, think and check before you invest. At times we guilty of laughing at the stupidity of others but we should not. We should show them the folly of their ways, even in the face of ridicule and seek to educate them.  With the lessons learnt from each mistake we as a society will become more aware of the evil that is around and be careful not be ‘scammed’ ourselves.

Sources:

• Herald Tribune http://www.iht.com/articles/ap/2008/03/05/arts/People-Lou-Pearlman.php
• http://www.rollingstone.com/rockdaily/index.php/2007/10/04/lou-pearlmans-pervgate-the-most-disturbing-things-we-learned-about-the-boy-band-impresario/ –**
• http://www.sptimes.com/2007/06/03/Business/Unmasking_Lou_Pearlma.shtml***
• http://www.ripoffreport.com/reports/0/241/RipOff0241708.htm****

Related

• Lou Pearlman and his 20+ year Ponzi explored(pt 1)