Ponzi Analysis: Suspected Australian and Canadian Ponzi Schemes show all the classic signs long before collapse

In 2017, there were lots of Ponzi schemes, and two of them caught my attention. One was the Pilbarra Ponzi scheme in Australia, and the other was Istuary Innovation Labs Ponzi in Canada. Both of them show classic Ponzi signs long before their collapse.

To recap, the alleged Pilbarra Ponzi was a real estate investment project on the island of Newman near Western Australia, and Port Hedland, also Western Australia. Over $120 million where raised from 1800 investors who were promised between 10 and 36% per year return, into what they thought where property-backed investment. Turns out, the largest property was a piece of undeveloped land on the island of population 7000. The group of companies went bankrupt in 2016, and the Australia agency ASIC charged the operator Veronica Macpherson of operating a Ponzi scheme, with the later joiner's money went toward paying the early participant's interests.

As for Istuary Innovation Labs Ponzi, it started in 2013 as "technology incubation platform" to link tech startups in Canada with customers in China. What was interesting was it promised to return FIVE TIMES what was put into the company in two years, alleged the victims suing the company. Several employees and contractors claimed they had not been paid for work or wages. One investor outright called Istuary a Ponzi scheme.

Let's ignore for now whether they are really Ponzi schemes or not. But what are the signs of danger both exhibited long before they started actually showing problems?

Hobnob with Politicos

Istuary head Yian "Ethan" Sun hobnobbed with Canadian prime minister Justin Trudeau. This was featured prominently in Istuary's promotional video.


Macro's MacPherson featured prominently interview with former minister for Regional Development Brendon Grylls. This video was hosted on MacPherson's company website.



Both are claims of legitimacy by proxy, though the minister *did* talk about developing the island.  What real business need to advertise itself like this, clinging to leigtimacy by proxy, rather than by its own merits?

Both promised outrageous returns

Macro promised up to 36 percent per year

They were promised rates of return of up to 36 per cent if they gave their money to Macro to invest in Pilbara property developments around Newman and Port Hedland. --abc.net.au 

Istuary promised 500 percent in 2 years.

All the investors claim in their lawsuits that they were told they would receive returns five times what they put into the company within two years. -- cbc.ca

It's absolutely incredible any one can believe legitimate projects can achieve returns like this while in this lethargic economic climate.

And this is just from public sources, not court documents.

Is your scheme showing such warning signs?


http://www.abc.net.au/news/2017-09-29/wa-ponzi-scheme-investors-unlikely-to-get-money-back/8997970

http://www.cbc.ca/news/canada/british-columbia/lawsuits-allege-vancouver-tech-company-a-ponzi-scheme-and-sham-1.4310897