Quebec Moves To Shut Down Site That Purportedly Monitors HYIP Programs, Saying Operator Is Aiding Scammers

If the Autorité des marchés financiers (AMF) gets its way, a website styled maxhyip.com will be shut down and its operator blocked from promoting “products and services relating to various high-yield investment programs (HYIP[s]) to Quebeckers.”

The alleged operator of the site is Steeve Beaudin, against whom AMF is seeking a cease-trade order and “administrative penalties.”

Beaudin is “aiding HYIPs with illegal activities as securities advisers in Québec,” AMF alleges.

Ads that promise preposterous payouts such as 135 percent in a day and 5,000 percent in 90 days appear on the site. There’s also a section that purports to monitor which sites are paying, which sites are not and which sites are experiencing “problems.”

Many such purported monitoring sites follow largely the same blueprint MaxHYIP appears to be following, a situation that has contributed to HYIPs expanding across the globe and sucking in millions and millions of people. That a scheme is “paying” is not evidence that no fraud is occurring, although disingenuous HYIP promoters often position it as so to keep the Ponzi wheels greased.

Such sites also may encourage so-called “test spends” as a means of enabling an HYIP scam to gain a head of steam. If a successful payout results from the “test spend,” the recipient can be duped into believing a “program” is real and join the scammers-in-chief in helping the scam gather even more money.

Payment processors named on the MaxHYIP site have been associated with a sea of scams, including “programs” such as AdSurfDaily, Zeek Rewards and Imperia Invest IBC. ASD was a $119 million Ponzi scheme. Zeek is alleged to have gathered nearly $900 million in a combined Ponzi- and pyramid scheme. Imperia is alleged to have gathered millions of dollars and to have targeted people with hearing impairments.

Processors referenced on the site include PerfectMoney, EgoPay, Payeer, SolidTrustPay, HD-Money and others. Bitcoin also is referenced, as is an apparent virtual-currency wallet known as ASMoney.

“Steeve Beaudin is not registered with the AMF and is therefore not authorized to solicit or advise Québec consumers for investment purposes,” AMF alleges.

From the AMF statement (italics added):

Caution when dealing with HYIPs

HYIPs are investment programs in which money is invested for a given period (hour, day, week or month) at a high interest rate. It is a fraudulent scheme where investors are generally asked to entrust the management of their investments to so-called experienced managers and they receive interest according to the period chosen, which they can withdraw as they wish. In addition to being fraudulent, HYIPs are administered by companies which are generally off-shore, making it difficult for consumers to take legal action against them.

HYIPs, which also often commissions to recruiters, tend to be straight-line Ponzi schemes with no “product” other than the purported investment “opportunity.” In recent years, however, more and more HYIPs may be using purported “products” such as VOIP software, cloud-computing software, “advertising” modules or auction “bids” to disguise the underlying investment elements and the underlying scam.

If an HYIP scheme advertises a “product,” it typically promotes a lower daily return, perhaps between 1 percent a 3 percent. Even those purported returns are outrageous, however. On an annualized basis, Zeek Rewards, for instance, was touting returns that would have made Bernard Madoff look like a piker.

HYIPs, whether they feature product claims or not, also offer returns that are unusually consistent. In the ASD and Zeek cases, it was alleged the operators simply manufactured the numbers because they knew that players who did hear a certain number would not play.

The ASD and Zeek cases alleged the presence of co-conspirators. In such instances, the co-conspirators may be individuals who helped advance cover stories and fraudulent narratives. HYIP schemes also have been known to have silent partners and to launch reload schemes when the original scheme craters — AdSurfDaily to AdViewGlobal, for instance.