“How would you like to make money watching ads online?”
An innocuous question like the one above have to be the beginning of all Ponzi schemes. With the college semester over I was on winter recess, hanging out with friends back home. Somewhere between pizza and playing Crash Team Racing one of my buddies (who we’ll call Marlon), asked me the above question. Being a broke college student, working in the dining hall making $75 every two weeks, the opportunity to supplement my income was interesting.
“Sure, how does it work?” I responded intriguely. Enter, 12DailyPro. As Marlon would go to explain, you would buy “shares” in $6 increments (up to 1000 shares), then for the next 12 days you watch 12 ads per day, and you are guaranteed a 144% “profit”. As described on ThinkGlick: The “auto-surfing” was presented as a form of online advertising that purportedly generated advertising revenue for companies that want to increase traffic to their websites. The premise behind auto-surfing was that companies that advertise on the Internet are willing to pay to increase traffic to their websites. These companies hire an auto-surf firm or ‘host,’ which in turn pays individual web surfers to view certain websites on an automatically rotating basis.
TOTALLY legitimate, right?
My first investment I purchased 16 shares ($96), I watched the twelve ads per day and twelve days later, I sitting on $139.24. Wow, “this is real”, I thought. Now time for round 2: this time I purchased 41 shares ($246), twelve days later $354.24 was returned to my account. I thought I had found a magical cash cow. Time to up the ante, I purchased 75 shares ($450) and let the magic happen. While waiting for my “return” a thought came across my mind: “what if I got a credit card and bought the maximum shares?” Making an easy $2,640 in twelve days… can you say gullible?
Before I could count my profits, BOOM, the site shuts down and surprise, surprise, it turns out 12DailyPro was a Ponzi scheme. Charis Johnson, the founder was running this entire operation from her apartment in North Carolina, 300,000 members later and she had swindled investors out of approximately $50 million in less than nine months. As it turns out the SEC stepped in and shut the site down. It determined the sale of the membership units were fraudulent and unregistered sale of securities. Eventually, Johnson would settled the charges without admitting or denying guilt.
While my loss was nominal compared to other investors who lost thousands and tens of thousands, this experience taught me several valuable lessons that I carry with me to this day:
- Do not think that you’re so smart that you can’t get got.
- If it’s too good to be true, it probably is. This “magical cash cow” like tricks, was just an illusion.
- Work. It’s the only surefire money making scheme there is.
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A great reminder to us all. When it seems too good to be true, it usually is.
Ponzi schemes are such a classic way to get duped. If they would be a little less obscene, I think they might be much more difficult to catch.
It could be that some of my P2P investments are Ponzi schemes, too. When they’re not regulated, new investors might be used to cover for losses. Need to watch out for that.
100% agree. It sounds obvious and no one ever thinks they’ll fall victim to a scheme but “when it seems too good to be true, it usually is.”