One of the largest, and most obvious, pyramid scams in recent years was served by the People In Profits Scheme, aka the PIPS scam.
The scam, based upon investments that were supposed to make huge returns, came to real prominence when the founder, Bryan Marsden, was arrested by Malaysian authorities.
Calculations
The PIPS scam made some bold claims as to how much investors could expect to receive. According to Quatloos, for an initial investment of $175, followed by monthly payments of $25 for 5 years, the returns were quoted as being $87,017.46 plus $9,323.30 for the rest of their life. These figures equate quite well with other claims I have seen which suggest a return of 2% per day compounded.
Of course some people in the financial sector do make good returns, that’s why brokers and traders earn such good salaries. However, a daily increase of 2% means that the initial investment would double every 35.3 days if my maths is good. That’s a staggering and proposition if correct isn’t it!?
Supporters
A search of the internet turns up posts that talk of supporters of PIPS being almost cult-like and secretive. Apparently, investors are forbidden from talking about the scheme and are unwillingly to supply any kind of evidence to back up the claims they make about their earnings. This could be indicative of shills, putting out false and/or misleading information to hype the business further.
Bryan Marsden
Bryan Marsden, the founder of PIPS and a British national was an engineer, NHS manager and previouly in the RAF before starting the People In Profits System. Based in Malaysia, he was taken into custody in August 2005. In August of 2006 Pinoy Money Talk reported that he and his wife, Phan Sew Ken, were charged with having committed money laundering offences between August 12th 2003 and January 4th 2005.
The trial was set for September 13th of that year but I have so far been unable to find how it concluded. Please let me know if you have any information on that.
Conclusion
A daily return of 2% compounded sounds too good to be true. The fact that Bryan Marsden has been arrested and that there seems to be a lot of secrecy surrounding PIPS would suggest to me at least that it probably was too good to be true and was, in fact, a HYIP, or High Yield Investment Program. Such schemes can pay out very handsomely to those who get in early but, ultimately, collapse, leaving later investors out of pocket when the stream of new recruits runs dry.
Verdict
From the limited information available, I would have to concur that PIPS is/was a scam.
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{ 4 comments }
Where did you find this one?
It’s not one you find on a free theme site
Wow Scam, this design is awesome
Thanks Col
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