Ponzi Scheme?

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Hello I'm New here! Joined: 07 Apr 2010 Posts: 6

Hello,

I was browsing Craigslist for some scams to get started on, and I ran across this:
http://orlando.craigslist.org/fns/1687240999.html
We are looking for 10 serious qualified investors that are tired of the uncertainty of the market and not willing to accept 1-2% return from the bank. We will pay you 10% annually( payable each month) for as long as you allow us to use your money to acquire auto loans. We are seeking a total of $10,000,000 at which time we will close the pool. Your money is protected by the auto notes as collateral and we pledge a $10,000 note to you as collateral for every $9,000 you have invested, so you are always over collateralized. We handle all collections and servicing , you get a monthly check and at any time you'd like the principal retruned, just notify us and within 120 days you are paid off.
More people than ever are having a tough time getting car loans, the car dealers need help and you need a good retrun that is short term and liquid. This is a investment that makes sense for everyone.
Contact us at
352-598-3492
[email protected]

What makes it seem like a scam is the fact that they want huge amounts of money, and the investment is watertight, too good to be true.

After emailing, I quickly received a detailed business plan from the company director who was wanted to speak over the phone. The business plan included the name of a practicing attorney in Florida.

The business plan (eight pages of dense text) consists of creating loans and selling them within three years before the person has a chance to default. Investors put down a huge amount of money and get interest paid monthly.

Maybe its legit. I dunno, I'm really green here, any suggestions?

Thanks!

Posted: Wed Apr 14, 2010 5:54 pm

I don't think this is a ponzi - they usually have no limit on the # of investors, this one has a limit of 10.

They're targetting high net worth investors in this one.

Quote:

we pledge a $10,000 note to you as collateral for every $9,000 you have invested

and when the note is worthless because someone stole the car or they stopped paying, who cares.

Quote:

We will pay you 10% annually( payable each month) for as long as you allow us to use your money to acquire auto loans.

Most prime auto loans are paying less than 10% interest so unless they're going to go after subprime auto loans (which now are losing value faster than a politician's campaign promise) how do they expect to make money?

This is definitely high risk but what's the reward? 10%? Please. It is a bad deal.

Definitely scammy but not in a ponzi way.

My guess is a bunch of people bought a bunch of car loans, and they're going down the drain, so they want to pawn them off to new suckers and go away.

Posted: Wed Apr 14, 2010 9:04 pm

Generally agree with BobCat above, but it may be more than just cars. (imho) It only makes sense if you can afford to lose.
Lot of those very/similar ads on Craigslist around the country (Google the phone number)

Quote:

10 serious qualified investors...
We are seeking a total of $10,000,000 ...

10 investors at $1M each or 10 in each area or ??

Quote:

352-598-3492

International Numbering Plans wrote:

Information on phone number range +1 352 598XXXX
Number billable as mobile number
Country or destination United States
City or exchange location Ocala, FL
Original network provider* Cellco Partnership Dba Verizon Wireless - Fl
*) Number portability has not been taken into account

Probably = Jim Lally, Osceola Mortgage, 1899 SE 58th Avenue, Ocala, FL 34480
Office Phone: (352) 624-1179 x 108
or toll-free: (888) 624-1179
Cell Phone: (352) 598-3492
Fax: (352) 624-1189
http://activerain.com/ocalasmortgage
http://mortgagegrapevine.com/thread/?thread=77734
http://localism.com/neighbor/ocalasmortgage

---------------------------------------
Still. it's HIGH risk for only 10%

Hello I'm New here! Joined: 07 Apr 2010 Posts: 6

Thanks BobCat and justjay, that makes a lot more sense. Everything I found on the people involved suggested they were into short term, speculative investing.