The following is a personal story involving a series of unfortunate events which took place three years earlier.
It is example of Danger #8 of the Ten Dangers of Investing.
These events partly gave rise to the development of a much needed platform focused on providing financial honestly. Thus, Money Uncensored was born.
Looking back, here’s what happened.
I wrote an article on behalf of the investors of a reputable lending company New Solutions Financial. These investors were looking for answers as to why their monthly interest payments had suddenly stopped after 13 years of no issues.
In the article, I politely asked some direct questions including the reason for the interest payment stoppage and a bunch of other questions important to confirming the sanctity of the lending company’s business model.
I also contacted the lending company for feedback on the article. After all, this investment was absolutely rock solid and I was just asking some basic questions. It should have been impossible to collapse…unless there was something going on we didn’t know of.
The article went viral to all the right people. Almost immediately, investors notified a securities commission and a national paper about the article. They both tracked me down to get more information.
Looking back, I realize now that I wrote an article which greatly assisted in exposing massive investor misinformation.
An investigation led to discovering a major circumvention of the investment business model and an illegal $200 Million+ laundering scheme.
Allegedly, this is how they got away with it.
The scheme surrounded the claims that the reputable lending company was using investor money for “Factoring Loans” to vetted companies.
In return, the investors received between 7% and 12% annually in monthly installments. Each factoring loan had creditor insurance in case any loans were not repaid. The factoring company was also supposed to have about $2 in collateral for every $1 they lent out. Like I said, this was a rock solid investment…unless there was something going on we didn’t know of.
During the last years of the investment, hardly any factoring was done and hardly any real assets were pledged against the loans. This rendered the creditor insurance useless. In reality the majority of the funds were “loaned” to companies the leader of the lending company controlled.
INTERNAL FRAUD ALERTS claims.
The leader utilized several shell companies. He loaned the money to himself and then consequently bankrupted the borrowing company leaving him with an enormous amount of stolen money, which he allegedly laundered and hid. In order to continue perpetuating this scheme the investors received monthly payments until three years ago when apparently the new investor money coming in was no longer enough to keep the scheme going.
Three years later, two provincial securities commissions have banned the company, its subsidiaries and its primary owner from selling securities. And there are bankruptcy proceedings in process for these defunct companies. Investors have received 3% of their investment funds back…and that’s pretty much it.
Everyone on the ownership, auditor and media side seems to have “moved on” with investors still being confused victims.
So basically one or a group of people committed large scale fraud and simply walked away with $200 Million+ and didn’t properly explain in simple English to the investors where the rest of the money was laundered to. So where has all the money gone? Who else helped perpetuate the situation and why haven’t they been named?
There comes a point when the answer to these question may be “I don’t want to know”.
Sadly, this is not the only case I know of like this. Money talks and it can buy you a lot of time and legal obstacles for the legal world to cut through.
The above article is a personal story involving a series of unfortunate events which took place years earlier. It is one of several stories which gave rise to the creation of the original Money Uncensored series of lectures, strategies and articles.