We are spotting scams for you!

by | May 31, 2001 | Archives

We are spotting scams for you!

Readers are sending us more and more what appear to be legitimate business deals but they are not as you can see below.

We have been reviewing three types of business scams:

  1. Offshore structures (such as pure trusts) that do not work
  2. Investment clubs and investments that are Ponzi schemes
  3. Purported loan packages with up front fees

Here We spotted an example of a loan fee ripoff when a reader from New Zealand sent us this note.


	I've been trying for years to find Venture Capital for many viable East European
projects. I did not have much success mainly owing to the fact that most of the
projects did not meet the IRR (Internal Rate of Return) fund requirement to be
at least 40% annually. Instead I have been looking for alternative investments
and this is what offer I have received from an American financial consulting
firm. What worries me is the up-front fee (US$400K) requested for the 1st
program (Commercial Mortgage Bond) and US$ 125K escrowed and then refunded after
the closing for the 2nd program. Could you please have a look at both procedures
and advise if both are legitimate and doable or just another scam. For your
information I have checked the American financial consulting firm with Dun &
Bradstreet and it appeared financially strong and no litigation
reported on it for the last 10 years of its operation.

The data he sent me was beyond my experience, so here was my reply.

I may be missing something but this does not make a lot of sense to me. I am passing this onto eClub advisor Steve Rosberg who as a banker knows more than I do about this. I would be very careful about paying $400,000 up front. Also be careful of the trick one of our Canadian readers sent to us last week where a phoney company incorporated in the Bahamas used the name of a reputable company in Canada so that the investor got a good D & B report when he checked, but the D & B was on the Canadian firm not the Bahamian.

If you are an eClub member and have concerns about whether some business offer is legitimate, let us know and we will try to help.

Even better join us with Steve Rosberg here on the farm for our course Profit South which will be conducted Friday, 6, 7 and 8.

Steve was born and raised in Argentina, and holds Danish citizenship. He has a degree in Economics. He has held senior positions in European and Latin American Banks and now manages his own firm in the financial sector. Steve is fluent in English and Spanish, and has a fair command of Danish and French.

In the course Steve will cover:

  • Scam detection and avoidance and a primer on the basics of banking (which includes practical examples).
  • The fundamentals of onshore jurisdictions with offshore benefits.
  • How to truly improve yields in the cash portion of an investment portfolio through emerging markets bond portfolios.
  • Forestry investment in Argentina and Uruguay.

In the meantime if you are worried about some investment or business deal that someone is offering you do not hesitate to contact us.