The financial pyramid: the essence, signs, creation

The population of our country knows firsthand about the financial pyramids. After all, even 10-20 years ago they were created literally at every step. People gave last money to get even more money. At the same time, the largest case in this area is involuntarily recalled. It is, of course, about MMM Sergei Mavrodi. A huge number of people suffered from this financial scheme, some proceedings are still ongoing. Financial pyramids are also being created now, but they work on different principles. The main goal remains the same - to earn as much money as possible, and in a short time.

The history of financial institutions of this type

It is worth noting that the financial pyramid appeared long before most people in Russia found out about it. If we talk about the first such organization, then we can recall the "Mississippi Company", which was founded in England in the XVIII century. Invented and founded this society, John Law. His idea was to print banknotes instead of gold and silver coins. At one time, it almost ruined such a large state as France.

Then there was a long period when these organizations were forgotten. The creation of a financial pyramid similar to the modern one was undertaken in 1911 by Charles Ponzi. His idea was to circulate and exchange international postal coupons. By the way, these coupons are still used in the mail. Profit promised to be simply unrealistic - about 400%.

People invested all their money for a short time: from 45 to 90 days. Ponzi promised to get a quick income, but in the end the pyramid fell apart, and investors were left with nothing. The golden time of these financial organizations came at the end of the twentieth century. Here, countries such as the United States, China and Russia came forward.

Financial pyramids in Russia

Of course, it would be surprising if the idea of ​​getting money from nothing became popular in our country. Many experts associate the financial fraud of companies with the economic situation on the market. As if that time itself was pushing various companies to participate in the deception of investors. For example, the organization "Russian House of Selenga" was a fairly successful company with good profits. However, in pursuit of huge sums, she abandoned her activities.

Speaking of the financial pyramids in Russia, one cannot ignore MMM. The creators of this scam are Sergey Mavrodi, his brother Vyacheslav and the wife of his brother Olga Melnikova. By the way, it was the first letters of the names of these people that became the name of the pyramid, and not the slogan "we can do a lot." MMM has become not just one of the largest world financial organizations of this type, but also a role model.

Mavrodi promised his investors a profit of up to 1000% per annum, and in a short time. He launched an excellent advertisement, thanks to which people lined up to give their money. A Russian man was looking for easy money, and paid for it. The heyday of MMM came in 1994, and then the proposal caused a sensation. Mavrodi showed by his example how the financial pyramid works. About 10 million depositors were deceived over this year, and their funds were buried.

Pyramid principle

Many people think that it’s easy to come up with such a scam, you just need to give good advertising. However, this belief is a fallacy. The creators of the pyramid must have financial literacy, as well as be good psychologists. The principle of operation of such an organization is the same - to make a profit from investing. All income is divided between the creators and the first investors. New members are actively involved until the end of the pyramid.Usually it quickly crashes, but the scale of the action is almost impossible to assess.

Just at one point, the payment to investors stops, and they are left with nothing. It is necessary to consider the principles of the financial pyramid:

• each depositor is promised a high percentage upon entry, thereby encouraging investors to make large investments;
• it’s often very easy to join an organization; you don’t need to take special courses or register anywhere;
• you need to understand that the creators will spend a huge amount of money on the active promotion of the pyramid, because it is not for nothing that they say that advertising is the engine of trade.

Features of a financial scam

How to recognize such an organization? It should be noted that this is quite simple, since many do not even try to disguise themselves. There are those who are trying to do something for this, but they fail.

So, consider the main features of a financial pyramid:

1. Unrealistically high interest. This is probably the most obvious indicator of fraud. After all, if you analyze the simplest things, you can understand that the pyramid offers something very suspicious. For example, the same banks in the best of times gave a maximum of 15-20% per annum. And here they offer you 200, 500 and even 1000%. Doesn't that seem strange?
2. You are practically forced to invest a certain amount of money. If you take a bank, then such a situation is hardly possible that they will pull on the sleeve and ask to open a deposit. Deceived investors complained that they were affected by hypnosis.
3. There is no information about the company’s business. In other words, they pour water all the time. They talk about highly profitable business, but do not name specific amounts. The essence of the financial pyramid is that no business exists. Money is earned solely on deceived investors.
4. Search for people. It’s not enough to make money, you need to bring as many friends and relatives as possible to the organization. A little advice: compare everything with the bank, and draw conclusions. It is unlikely that employees of a credit organization will ask you about finding customers.
5. Sectarian slogans. It’s no secret that financial pyramids often use motives like “success is with us”, “only you can help people”, etc. Quite often, the organizers say that the creator founded a new type of company, that there weren’t such people in Russia yet, and things like that.

Tiered Pyramids

The classification of such financial organizations involves the division into two types: multilevel and according to the Ponzi principle. At present, it is multilevel schemes that have gained the greatest popularity. They do not hide their activities and are in demand.

These pyramids work according to a simple scheme. First, the person who enters brings in a sum of money, and it is divided between the higher members who invited him. If a new contributor brings people, then their investments are distributed between the members of the pyramid and himself.

The main problem with the operation of such schemes is the lack of new people. In order for this business to flourish, it is necessary to engage other participants on a daily basis. Finding new people is not easy. A situation is widespread when participants who have just joined the organization do not find customers at all, and thus do not earn money. According to statistics, such people in the pyramids are about 90%.

Ponzi principle

This type of financial pyramid at one time turned the world upside down. It is to him that the notorious MMM organization belongs. For the first time, a company of this kind was created by Charles Ponzi, in whose honor it received its name. Such a financial pyramid is characterized by the promise of the organizers to pay huge interest to investors.

As a rule, it is very difficult to search for people at first, but if it turns out, then the creators reimburse the promised funds from their assets. Therefore, the first investors win. After investors got their first interest, they immediately spread the rumor that you can easily make money without doing absolutely nothing.Here the principle of a snowball begins to operate. Then comes the moment when interest is paid by funds already raised.

A financial pyramid based on the Pinzi principle can last for a long time - as long as the organizers are able to cover the payments. When they understand that there is nothing to give interest to, the creators disappear. Usually they drop everything and go abroad. The organizers keep all the money received and do not appear in the light for several years. Deceived investors have no choice but to reconcile and continue to live.

The most famous world pyramids

A small list of financial pyramids that are the most famous will be presented here. So, among them there are:

1. Madoff Investment Securities (USA). One of the greatest organizations of this type self-destructed in 2008, this was due to the economic crisis. Bernard Medoff is the founder of this pyramid, which lasted 18 years. This is a rare case when such a company has been operating for so long. When the liquidation occurred, more than 3 million depositors were left with nothing. Bernard Medoff received a term of 150 years in prison.
2. Stanford International Bank. Allen Stanford, who was the organizer of this pyramid, is a financial genius. In 2008, he was recognized as the man of the year, and in 2009 he was accused of fraud. It is worth noting that for quite a while he disguised his organization as an investment bank. Then the fraud was revealed, and he received 250 years in prison.
3. Yingkou Donghua Trading. This is probably the most famous financial pyramid of China. Company founder Wang Zhedong was very cautious. He organized his business in 2002 and promised investors 50% profit. In total, there were about 400 million dollars in deposits. Jedong advised people to grow rare herbs. Thanks to this, they could get extra money. In 2006, the company burst, and the founder was sentenced to death.

The most famous Russian pyramids

In creating such schemes, our country not only did not concede, but somewhere even surpassed foreign states. List of financial pyramids that are most famous:

1. Mmm. There are no questions. According to various sources, a figure of 10 or 15 million defrauded investors pops up. As for money, they were measured not by numbers, but by rooms and trucks. It is noteworthy that in our country the founders of this organization were carefully defended. Having served his term, Mavrodi tried to create new financial pyramids, but he did not have the previous success.
2. "Russian house of the Selenga". This company is known for being a pioneer in the creation of pyramids. It was founded in 1992, it lasted 2 years and received huge profits. The creators of the organization spent only 8 years and already in 2002 were released.
3. "The Lord." This financial pyramid is known for unusual assets. Valentina Solovyova, the creator of the company, understood that money is not the most reliable way to invest. Therefore, she repaid debts by cars, and then by apartments. In 1994, the company burst, and about 30 thousand people remained without their money. Solovyova did not calm down on this and made several attempts to establish a new pyramid, but this venture was not crowned with success.

Pyramids in the modern world

Some believe that everyone forgot about the financial pyramids, but this is a fallacy. Of course, at present there are not as many such organizations as they were before. And they do not enjoy huge popularity. However, even now, you can become a contributor who has been deceived.

Modern new pyramids are built a little on other principles. Already no one promises you 500% per annum, now a different figure sounds - 20-30%. The current organizers immediately say that the investor is in a certain way at risk. Moreover, the more money he invested, the greater the risk. Some companies directly say that they are a pyramid.Such organizations like beautiful and colorful names, often add the prefixes "finance" or "invest".

Nowadays, fraudsters have not decreased, so you should always be on the lookout. Do not get involved in dubious adventures, risking being left without a livelihood.

Online financial scams

The current popularity of the Internet could not fail to interest scammers. In many ways, their task became easier, because now you do not need to come up with real assets and stocks. A person will pay not for a specific product, but for the opportunity to earn. It functions as follows: the first investor buys the right to participate and receives a link to the resource, then he sends this information to a huge number of people. If customers follow this link, the first investor will receive a certain percentage for this.

Thus, the essence of the pyramid is realized. Each new client brings profit to several people. It's simple - the more people, the more money.

Consider the most popular and effective financial pyramids on the Internet:

1. Seven Wallets. Probably the most famous pyramid on the Internet with a simple scheme. A person needs to send a certain amount in equal shares to seven different wallets and find new people. Each invited participant also pays for each wallet, only the first one is removed, and instead of the last, the wallet of the person who brought the payer is indicated.
2. NewPro program. Here, the organizers offer a different approach. Logging in costs 90 rubles, the task is to bring at least three friends. Subsequent levels are paid with earned funds. The goal is to get 30 million rubles at level 28. Only this is impossible, because in order to achieve this, you need to invite 23 trillion people, which far exceeds the world's population.
3. MoneyTrain. The system is similar to NewPro. But only the creators got rid of the mistakes, and reduced the number of levels to 18, and the invitees to 580 million. But this is not possible.

How to identify scammers?

An article on financial pyramids cannot but contain such a clause. It should be noted right away that not all such organizations are aimed at deceiving the client. In practice, there are cases when network marketing works like a pyramid and is successful. The situation with an entrepreneur may be so that investments and investments are needed. This does not mean that he is deceiving you, but it is best to check and be careful.

At the end of the material, we give several indicators by which you can identify a fraudster. It:

• Active advertising, which begins to spin up to the project. The slogan for this campaign is usually high interest rates on deposits. You need to compare with the bank and understand that such rates are simply impossible.
• Hiding your activities. If you wish, you will not be able to find out what the company is doing. This is rather suspicious, because the regulatory company will never hide its reports.
• Small amounts for entry. There is a psychological moment. A person unconsciously wants to try, especially if a small contribution. If you promise high interest with minimal investment, then stay away from such an organization. All signs indicate that it is a financial pyramid.

In order not to become another deceived investor, you must be a financially competent person. It must be remembered that any investment project on the Internet is a pyramid. Do not participate in suspicious campaigns, do not let fraudsters deceive you.