Unbelievable Investment Fraud Opportunities
This Deal Won't Fly
There tends to be a cyclical surge in illicit investment schemes involving exotic livestock (such as ostriches and emus).
The ostrich deals are usually packaged as partnerships in which investors pay several thousand dollars or more for shares in "breeder pairs" of the animals, which are then raised on ranches, usually in the Southwest U.S.
The ostriches are touted as being the next non fat, low-calorie, food item fad headed for the dinner table of every American household.
One ostrich farm investment scheme advertises that you can get profits of 20-300% almost immediately.
Investors are told that ostriches comprise the "agricultural industry of the century in a fully insured investment that has been called the cash crop of the decade."
Investors are solicited to be "general partners" in the raising of $60,000 to purchase and maintain two breeder birds.
No mention is made of the extremely risky nature of the ostrich farming business, including breeding difficulties, disease problems, and an uncertain commercial market.
In fact, the existing market for the exotic livestock is so far extremely limited and uncertain.
In addition, a number of the touted ostrich and emu ranches have been found to be either imaginary or vastly overblown in terms of size.
As many as 10,000 people lost money to promoters who charged $40 for packages of milk culture under the name of Culture Farms.
The promoters stated that they planned to produce Cleopatra's Secret, a major new perfume that used the milk product as an ingredient.
Investors were told to grow the milk culture in their kitchen refrigerators and then to present the containers for repurchase by Culture Farms at a guaranteed price.
Before investors figured out that something smelled wrong, the investment soured, and more than $100 million in hard-earned savings were gone.
The perfume never materialized in this ponzi scheme which initially shipped some repurchased materials from initial investors to new participants so as to create the illusion of a successful business model.
One stock promoter "invented" a process for growing plants using sound waves and special fertilizers.
He claimed that his process caused plants to grow faster and healthier than with conventional growing methods.
He called it "Biosonics" and applied for a patent. Bio-Sonics International was formed to promote and sell this invention.
He began selling stock in early 1996 to finance the construction of a large demonstration greenhouse.
He told others that multinational corporations and foreign governments had expressed an interest in using Biosonics to produce food and that they would invest large sums of money if the project succeeded.
He approached individual investors and urged them to tell their friends, families, and business associates about the stock offering.
He later gave presentations to groups of potential investors.
The stock initially ranged from two cents to fifty cents per share and it was increased to one dollar per share in later transactions.
Investors were not informed that the price was chosen arbitrarily by him and that no actual market existed for the stock.
Investors would receive preprinted stock certificates indicating the number of shares purchased.
About thirty people purchased these shares from him for around $1,600,000.
He did not disclose his prior business failures or that he had twice filed for bankruptcy, nor did he tell investors that all of the rights to the Biosonics patent had been previously assigned to a third party.
He did however send a letter telling shareholders that he had met with the managing director of The Mitsubishi Group and that final commitments had been made for Mitsubishi to provide $10 million dollars in financing to Bio-Sonics.
In addition, he claimed that agents of Bio-Sonics had met with the royal family of Saudi Arabia and that they were also prepared to provide $10 million dollars.
He recommended that shareholders increase their respective investments in order to take advantage of potentially favorable stock transfer ratios and values in a buy back offer.
Shortly thereafter he appeared before the Securities Division and testified under oath that all funds raised in connection with the unregulated stock offering had been spent, but insisted that a buy-back offer was soon to be funded by an unidentified group of offshore investors.
State Official Warns of Worm Farm Scam
12/25/03 - Hundreds of people, including several Connecticut residents, have lost money to an Oklahoma promoter of worm farms, he said.
B&B Worm Farms of Meeker, Okla., promises in ads to supply initial worms and supplies, then to buy back worms produced by contract farmers and sell them to gardening firms and nurseries.
At first the company pays for the worms, but eventually the company resells the worms to new contract farmers, rather than reselling them for a profit.
This is known as a Ponzi, or pyramid, scheme.