Here are some of the craziest pyramid schemes that people fell for!
Find out just exactly how emus actually became part of a giant scam!
9 - Pastor Hibbert Former pastor Marlon Hibbert and his wife
Verna ran a $8.6 million dollar ponzi scheme by tricking members of their own church!
They got their congregation to invest a minimum of $10,000 dollars for a guaranteed eight
and a half percent return on their investment!
How did they actually make that return?
They didn’t!
They paid the returns with new cash they got from new investors.
You know, the good ol’ fashion textbook pyramid scheme.
They didn’t invest the money and showed fake returns to anyone looking to invest.
Toronto police did a financial audit and found that roughly 200 people gave them $8.6 million
dollars.
The Hibberts used that money to bankroll an extravagant lifestyle.
They bought cars, a huge house, and expensive trips while their victims watched their retirement
go down in flames.
Some people even lost their homes because they invested everything!
The victims said they believed their money was safe because Mr. Hibbert was a pastor.
8 - Latex Gloves In 2014, a guy by the name of Deepal Wannakuwatte
was charged with operating a ponzi scheme that took in more than TWO HUNDRED and thirty
million dollars.
Wannakuwatte was able to convince investors that they had a massive government contract!
Wannakuwatte ran two companies, International Manufacturing Group and RelyAid.
He misled investors into thinking they had a massive contract with the United States
Department of Veterans Affairs.
He told investors his companies had contracts worth more than $100 million dollars a year
selling the government latex gloves!
Of course, Wannakuwatte had false documents and relationships to show investors.
He had fake tax returns overstating income, fake corporate documents, and he even had
a fake Veterans Affairs representative!
7 - Lou Pearlman Do you remember Lou Pearlman?
Lou Pearlman was the mastermind behind boy bands such as Backstreet Boys and NSync and
the mastermind of huge ponzi schemes!
But we’ll get into that in just a minute.
The Backstreet Boys and NSync dominated the late 90’s and early 2000’s.
Pearlman became sort of a music mogul, and he created other boy bands such as LFO and
Take 5.
However, things went south for him when The Backstreet Boys filed a lawsuit against him.
Each band member was only paid $300,000 for their work while Pearlman made millions.
But this was the least of his worries because he was running huge ponzi schemes!
In 2006, Federal Prosecutors found out that he had cheated investors out of more than
THREE HUNDRED million dollars through a fake company he pretended to own.
He used a company called Tran Continental Airlines in order to lure investors into giving
him a ton of money for OVER TWENTY years!
After investors began getting suspicious, he went on the run across the world He was
finally apprehended in Germany in 2007.
He pleaded guilty to his crimes, and was sentenced to 25 years in prison.
In a bizarre interview in 2014, Pearlman actually bragged that his Ponzi Scheme was better than
Bernie Madoff’s!
6 - Nu Skin If you ever encounter a Multi Level Marketing
company, always ask if it’s a scam!
Even the Federal Trade Commission has looked intensely at the operations at Nu Skin.
Technically, multi level marketing is a legitimate business model.
But, most people that get into it lose money.
We’re talking literally 99 percent of people.
This is a number the government themselves estimated!
It goes like this.
Nu Skin gets new recruits.
They get the recruits to buy Nu Skin products with promises of a lot of money.
And the recruits are supposed to sell it to anyone they can.
That and get other people to sign on to sell more Nu Skin products.
But ultimately the people that buy the most products are….the recruits themselves!
Nu Skin Enterprises is still operating today, but the company has had many issues.
Back in the 90’s, the company was investigated by the US government and had to pay out a
series of fines in 1992, 1994 and 1997.
Even the Chinese government sued the company!
In 2014 Nu Skin agreed to pay $47 million dollars in a settlement to the Chinese government.
Although companies such as Nu Skin may not technically be pyramid schemes, they might
as well be!
What do you think?!
Speaking of Nu Skin, we might as well get into:
5 - Herbalife This company is another multi-level marketing
company that markets and sells dietary supplements.
But since its beginning in 1980, the company has been plagued by legal problems.They’re
just like Nu Skin, except their scale is even BIGGER.
Herbalife’s critics say all the company does is exploit poor people by getting them
to pay thousands of dollars for products the company KNOWS they won’t be able to sell.
They claim that the company purposely tricks people with dreams of getting rich quickly.
In 2012, hedge fund manager Bill Ackman investigated Herbalife and concluded that they’re running
a very sophisticated pyramid scheme.
By his estimate, low level distributors of Herbalife lost around three and a half BILLION
dollars a year!
Herbalife denied this, but they decided to settle a class action lawsuit in 2014 in the
amount of $6 million dollars anyways.
As part of the agreement, the company admitted no fault.
In 2016 the Federal Trade Commission said that it’s virtually impossible to make money
as a Herbalife representative!
4 - Sundown Entertainment Sundown Entertainment was a comic book company
that somehow scammed almost 4 million dollars from unsuspecting people.
Daniel Parrilli, John Lauer, and Christopher Andersen had actually already all been in
prison together before running this ponzi scheme.
These guys were all white collar criminals serving time for various financial crimes.
Obviously they weren’t rehabilitated when they had gotten out!
When they got out, they formed a company called Sundown Entertainment.
They claimed to be buying and selling the rights to films and comic books.
They sold more than $7 million dollars in essentially stock to their company to approximately
150 investors.
They lured investors of returns of anywhere from 25% to 100% profit in as little as seven
days!
Why didn’t the investors do any due diligence on these guys?
Sundown Entertainment obviously weren’t making any deals and investors lost their
money.
All three of them were all sent back to prison once they were caught!
3 - TelexFree Cleber Rizerio was a guy who thought that
hiding $17 million dollars underneath his bed was a good hiding place.
That money was obtained from one of the biggest ponzi schemes ever, through a company called
TelexFree.
TelexFree was a company started in 2012 that was supposed to be providing an internet based
phone service that allowed free calls between Brazil and Latin America.
The company brought in millions from investors who paid money to post online ads in exchange
for a future return on investment.
The company basically took the money and just told the investors to recruit more people
into the scam!
Needless to say, no product or service was actually sold.
The scheme collapsed in 2014 after TelexFree eventually got around three BILLION dollars
from almost 2 million people! Cofounder James Merrill was arrested.
His partner in crime, Carlos Wanzeler fled to Brazil.
However, Wanzeler left a good bit of cash behind.
So he sent Rizerio back to Massachusetts where the money was hidden.
Things didn’t go as planned, and Rizerio was arrested by police.
He decided to cooperate with officials so he took them to Wanzeler’s apartment where
they easily found the cash!
2 - Susi Emu Farms Who comes up with a way to scam thousands
of people of roughly 50 million dollars?!
A guy named M.S.
Guru who owned Susi Emu Farms!
Authorities had to deal not only with the thousands of victims, but they also had to
deal with the estimated 100,000 emus abandoned when the scheme collapsed.
Back in 2006, this Guru guy got the brilliant idea to make money off unsuspecting investors
with Emus.
He marketed emus as a great opportunity with multiple revenue opportunities by selling
Emu eggs, emu meat and emu oil.
Except, there WAS no actual business plan by them.
His company offered investors the promise of a steady income in return for raising an
Emu chick.
The long story short is that people gave money and were given an actual emu chick to raise.
But all the company did was just take in more money from more investors, and they had no
plan to do anything with the emus.
More and more people decided to hop on the scheme, and even other companies got in on
the scam!
The emus just kept piling up all over.
Thousands of Indians chose to invest with Susi Emu Farms.
Many people mortgaged their house or dipped into their savings to increase their investment!
This crazy emu ponzi scheme finally fell apart almost 6 years later in 2012.
Roughly 50 million dollars were taken from some 12,000 investors.
Investigators began looking into charges against five major firms, the worst of which was Susi
Emu Farms, founded by the original Mastermind, M.S.
Guru.
1 - OneCoin OneCoin was a money heist that took BILLIONS
of dollars from investors between 2014 and 2018!
The brains behind this scheme was Ruja Ignatova.
Although the U.S. government previously estimated OneCoin’s take at $4 billion dollars, there
are sources that claim the worldwide take was as much as $15.8 billion dollars as of
early 2018!
We’re not going to go too deep into it.
But if you want to find out all the details, be sure to check it out here in this video!
What made OneCoin so attractive to investors?
It was its viral, commission-driven structure again.
It was sold to many vulnerable individuals, such as members of the working-class in England
and South Asia.
This scam quickly became one of the biggest the world has ever seen!
OneCoin grew to 10 million, then quickly to 20 million, then 30 million, and it just quickly
snowballed into the billions.
And with all the publicity stunts, and all the investor money rolling in, one day, Ruja
just disappeared.
Even more amazingly, even after Ruja was officially charged, people CONTINUED to invest in the
coin!
Despite all the evidence, investors simply just didn’t want to miss out on the next
big thing.
Here’s what’s next!