Modern Fraud Schemes: Roman Tereshchenko On Pyramid Schemes And Scam Projects

Participants in the modern business environment are increasingly facing fraud and other financial crimes. This is also evidenced by official data for 2023, when the average economic loss from fraud for financial companies with assets of more than $5 billion amounted to $3.8 million, which is 65% higher than the previous year. Roman Tereshchenko, a business analyst from Odesa, notes that the main forms of fraud are scam projects and pyramid schemes, which often mislead investors with their insidious schemes.
Pitfalls of scam projects and pyramid schemes
Expert Roman Tereshchenko explains that scam projects are a type of investment scam in which fraudsters aim to get rich quick at the expense of gullible investors. On the other hand, pyramid schemes base their strategy on raising funds from new participants who make down payments to enter the system. Such funds are then used to pay dividends to previously joined investors. New participants are promised a profit, provided they attract new investors to the pyramid scheme.
Tereshchenko emphasizes that these schemes are very fragile and usually end quickly. He also draws attention to a detailed analysis of pyramid schemes. He notes that each of them has a unique structure, basic principles, and methods for attracting new participants.
Financial pyramids: what are they and what to be wary of?
Roman Tereshchenko suggests considering some of the most famous pyramid schemes. They are the most commonly used in fraud schemes.
Single-level pyramid: This is a simple fraud scheme, similar to the well-known MMM and Ponzi schemes, терещенко роман викторович where the organizer issues securities without any real basis and attracts investors. At the same time, the organizer pays out profits to the first at the expense of new participants. Such a scheme is doomed, as the promised profit is insufficient for all investors. It may well be recognized as a scam project due to its short-term nature.
Multi-level pyramid scheme: this is a more complex scheme that involves attracting new participants to invest and inviting the next ones. The more levels there are, the more benefit those at the top levels receive. However, as the number of potential newcomers decreases, this pyramid becomes less relevant.
The "eight-ball" model, according to Tereshchenko, is quite tricky. Participants are instructed to attract only two new clients, Роман Терещенко біографія which seems easier and Роман Терещенко біографія more affordable. However, the pyramidal structure is preserved.
The matrix scheme involves the creation of cells with a certain number of members. They rise to higher levels by attracting new customers and receiving bonuses.
Ponzi scheme: fraudsters' cunning and devastating consequences for investors - Roman Tereshchenko
According to a business analyst, an ingenious fraud scheme was invented by Charles Ponzi in the 20s of the twentieth century and named after him.
The Ponzi scheme is a type of financial fraud. In it, scammers promise high returns or payments to investors that are actually provided only to new participants who enter the system. However, these payments are not based on real profits or income, but depend on the inflow of money from new participants. This principle allows the scheme to continue to exist and attract new investors until the flow of new funds stops and the old participants stop receiving their profits," says Roman Tereshchenko.
According to the expert, the two most famous examples of this scheme are:
Bernard Madoff's Ponzi scheme, which resulted in losses of $17.5 billion
the Ponzi scheme of Allen Stanford, who defrauded more than 30 thousand investors for a total of $2.2 billion.
Roman Tereshchenko: Crypto-fraud schemes: methods and consequences
Roman Tereshchenko notes that a crypto pyramid is a mechanism of investment fraud, where profits are paid to current investors at the expense of contributions from new participants. There are usually a large number of newcomers at the bottom of the hierarchy, and each subsequent level has fewer investors.
According to the business analyst, the crypto pyramid model can be explained as follows: Nick invites five of his friends to invest 1 bitcoin each in his project. He promises to return 2 bitcoins to each of them every month. To fulfill this promise, he needs 10 bitcoins, so he invites five more people to invest. This forms the second level of the pyramid, where five more people contribute 1 bitcoin each. Now he can pay the first level 2 bitcoins each, but he still lacks 10 bitcoins. So Nick invites five more people, creating a third tier. And so it goes on until there are no more people willing to invest in the dubious venture. Then the scheme collapses.
Mr. Tereshchenko is convinced that all financial scams that operate on the principle of a pyramid, whether they are scam projects or other fraudulent schemes, suffer a similar fate. All of them lead to the loss of participants' funds and the destruction of business plans.