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25 Million Dollars Invested in an Easily Avoided Scam

Discussion in 'Forex Articles' started by Pharaoh, Jan 15, 2009.

  1. Pharaoh

    Pharaoh Colonel

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    CRE Capital Corporation wasn't one of those cheap web-based HYIPS. This company had a real office in the US. They wouldn't accept money from individuals. If you wanted in, you had to form your own company and make a contract with them. They even told investors, oops, I mean investment companies, that they planned to have a stock offering soon and would let those lucky few in for only a few dollars per share. An outside auditing firm had supposedly confirmed that this stock would be worth $40-45 per share.

    Contracts were month to month, and the return was 10% per month. This was backed up by claims that their traders averaged far higher returns than this. They claimed to have a HUGE cash reserve fund that would allow them to keep paying investors in the unlikely event that their their incredibly successful traders had a bad month or two. These super traders were allegedly specialized in trading the USD/JPY.

    Still, the warning signs were all there. A brand new company (website created in July of 2008). Claims of investment returns that were far too good to be true (10% per month, every month). Alleged trading gurus that could produce these miraculous results, but with no track record. Investors were recruiting friends and family members to join in the money fest. It all screamed Ponzi, but most people didn't take the time to investigate.

    My fellow FPA member NG12 shares my suspicious nature. He thought something seemed wrong with this and checked with the FPA. It seems that CRE wasn't registered with the NFA or CFTC. When NG12 asked about this, he was given a song and dance about how it wasn't necessary, since they only had contracts with companies, not individuals. Of course, forming a sole proprietorship or an LLC is easy for someone to do if they wanted to invest . . . and the minimum investment was $100,000.

    I can understand the temptation to join such a venture. Wow! Take out a second mortgage on my house at 4-8% annual interest and get 10% per month! Yaaay! Free money!!!! What I don't understand is how anyone could not realize that this was at least a little suspicious (it was actually a LOT suspicious). How could anyone even consider placing $100,000 with someone they don't know without either doing some personal research or shelling out a few thousand dollars to hire an investigator to do some deep digging for them.

    One person even posted in the FPA forums that he'd visited the offices of CRE and had confidence in them. This person also didn't seem to care that CRE President James Ossie was the target of some lawsuits involving a real estate investment scheme that didn't work out to everyone's satisfaction. It's amazing what a nice office can do to lull some people into trusting someone. I'll bet that Charles Ponzi had a nice office too.

    I take a certain amount of personal amusement in this, because Bob Gaubert, the guy who seems to be the VP of CRE Capital wrote to the FPA to complain that NG12 posted their confidential contract and that I had said that they might be a Ponzi scheme.

    Guess what Bob? The SEC and CFTC just shut your company down today and froze all of its assents. It looks like your company's forex trading lost millions of dollars. It also seems that the SEC and CFTC think that you were paying people, er, companies their 10% each month from the money that new people invested. That is the very definition of a Ponzi Scheme.

    In the end, it looks like about $25 million dollars was taken from about 120 people (or their personal companies they formed so they could invest). That comes to an average of about $200,000 per victim.

    Think about it – if you want to risk $10 or $20 with some online investment scheme that's probably a scam, it won't destroy you. If you are thinking about turning over a LOT of money (maybe your life savings, maybe a second mortgage on your home) to someone, spend some time and a few dollars checking it out first. Sure, you may think you are a great judge of character, but con men are specialized in fooling great judges of characters. To risk $100,000 (or more) and spend less time checking it out than you do picking a new car is not a good idea. A lot of people fell for this because their friends and family members were getting their 10% back each month, every month. That's because new people kept falling for the scam and putting more money in. If the SEC and CFTC hadn't stepped in, sooner or later the supply of new investors would have dried up and the company would have disappeared with the remaining cash.

    Of course, it could turn out that both the SEC and CFTC are wrong. Maybe CRE Capital was really making piles of money trading forex. Maybe it wasn't a Ponzi scheme. Maybe the Easter Bunny is real. Given that range of choices, I'll put my money on the Easter Bunny.

    I'd like to thank the FPA for giving me the privilege of writing this article (or is it just that the Scam Investigators are slacking?). Even more, I want to thank NG12 for spotting this scam so quickly. I'm sure his timely warnings saved some people from losing money on this scam.


    Needless to say, the FPA Scam Investigations Committee agrees with me that this qualifies as a scam.

    The Official FPA Scam finding against CRE Capital

    The thread that NG12 first posted about CRE
     
  2. Pharaoh

    Pharaoh Colonel

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  3. ernest8fingers

    ernest8fingers Master Sergeant

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    well done!

    Nice job Pharaoh and NG12 ! This is exactly the type of service Forex Investors need to ferret out the "professional" scam artists. You guys r doing great work for the common man(or woman). I feel , though, it isnt enough to quench my burning rage that these people still breath air. I still think the law should force them to spend the remainder of their pathetic lives repaying the wrong to all their ex-clients. Prison is to good for this kind of crime. Grind them up! After all, my tomato garden needs fertilizer too!
     
  4. NG12

    NG12 Private

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    It looks like the losses on this were huge. Almost half the money they raised was lost in the forex market. I'm assuming most of what is left was spent paying huge commissions and monthly returns (up to 20%!!!).

    I have friends and family that were involved with this and I pray that the SEC can recover some of their money. I believe several of them think that if this just lasted a little longer, they may have made some money. In reality, the money was stolen and (most likely) would have to be paid back.

    It hurts to see friends and family stolen from. They are good honest people who work hard for their money. None of them deserved this or could afford it. It's easy to say that they were foolish to invest but, they were just doing what they thought was best for themselves and their family.

    Thank you again FPA and Pharaoh for your help.
     
  5. angelucha52

    angelucha52 Recruit

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    Thank you FPA crew... GOD BLESS YOU

    Reading this articles and others I am learning a lot. Looking for register documents and others.

    Most of those HYIP companies operate from Panama and other overseas countries, difficult to do research on the various requeriments so at least there are some BIG SIGNALS to look for before giving the money away...

    Stress is taking on a lot of USA residents and we are looking for exists...in order to survive this recession.

    Thank you FPA investigation team. You are doing a wonderful job.
     
  6. steven justo

    steven justo Recruit

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    this is great work they should be force to pay all that money back great work guys
     
  7. PistolDave

    PistolDave Corporal

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    Thank you, my friends

    I've said it before and I'll say it again; you guys at FPA are the greatest. I refer everyone to this site because I know you look out for our best interest.

    So sorry to hear that so many people lost so much. Greed, or the opportunity to get something for nothing, will cloud the judgement of even the best of people. Look at all the intellegent, worldly leaders who were scammed out of millions by possibly the greatest con man of all time; Bernie Madoff. It's a shame.

    I'm not trying to sound righteous, since I have been suckered in by con men myself. And let me tell you -- from personal experience -- a good con man is the greatest liar in the world.

    What if you aren't sure if the deal is for real? Duh, you just ask questions, right?

    Well, a good con man will do a few things:

    * They will be highly offended if you confront them.

    * They will get mad if you question their integrity.

    * They will make you feel like a fool if you want proof of their outrageous claims.

    * They can come up with a laundry list of reasons why you should suspend your "good common sense" and just trust them.

    --- And if you listen long enough and you want the deal bad enough you will start to trust.

    Hey, you don't even trust me. Would you send me a hugh amount of money if I could tell you what you want to hear?

    Again, I don't want to sound rude or disrespectful, because I have been there before. Yes, I have been scammed out of money too. And I have chased after the "something for nothing" dream -- and yes, it came back to bite me on the ass.

    I am much more skeptical now.

    I never forget the words of one of the world's best known skeptics, Mark Twain: I am not as concerned with the return ON my money, as I am with the return OF my money.

    Wise words indeed. ;)

    PistolDave
     
  8. ritz

    ritz Recruit

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    Well done FPA

    It's good to hear that such scam company like this being caught before
    big damage done to innocent people money...well done FPA and investigation
    team.
     
  9. omo9ja

    omo9ja Private, 1st Class

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    oops!! just when i thought Mr Ponzi was from my country????...........
    Anyway great job guys
     
  10. laurence davidson

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    press request/CRE

    I'm with Bloomberg News and am following up on a story we did yesterday on CRE. Can anyone who was solicited by the company or had any other contact email or call me? Thanks, Laurence Davidson, staff writer 404-507-1306 or lviele@bloomberg.net
     

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