Is Genneva Gold Sdn Bhd Malaysia and Singapore a Ponzi Scheme Scam?

Updated: August 18, 2014 / Home » Business and Invest

Is Genneva Gold Sdn Bhd Malaysia and Singapore a Ponzi Scheme Scam?

I think I know how this Genneva Gold ponzi scam thing works. Assuming that 1 gram of gold is RM100.

  • 1. Five ‘buyers’ buy 1 gram of gold at RM120/g (20% above market price)
  • 2. Genneva collects a total of RM600, bought 6 grams of gold, distributes the other 5, keep 1 gram for themselves.
  • 3. After 1 year, assuming that gold price goes up by 50%, they will then sell the 1 gram of gold to a new buyer for RM180 (market price RM150, marked up 20%).
  • 4. Genneva make a gross profit of RM80. The net profit will probably be 5 buyer x RM2.40 hibah x 6 months (based on contract) = RM72, leaving RM8 for commision, rent, etc.
  • 5. Their prediction is Gold will explode in value, and as long as gold price goes up 50% every year, they will make money or break even.
  • 6. Unfortunately, gold price remained stagnant for almost 1 year. This explains why the pyramid is collapsing and it took them 3 months or more to deliver the gold.

The answer is yes, 100% yes. Genneva Gold ‘investment’ is a Ponzi scheme, also known as a pyramid scheme. To understand how a Ponzi Scheme works, you have to think small, not big. Ask yourself, if you are the founder of Genneva, how do you make money by selling gold at 20 – 30% above market price and continue to give ‘hibah’ up to 1.5 to 5%? It doesn’t make any business sense.

Is Genneva Gold Sdn Bhd Malaysia and Singapore a Ponzi Scheme Scam?

  • The name ‘Genneva’ is already skeptical, it is like buying a BMV or BMMW car or Merdedez-Benc. Geneva (only 1 n, is a famous city in Switzerland, known for their gold watches).
  • If the founder is that good at generating 20 – 30% return per year just by investing gold, BNM should invest the entire country’s wealth with his company and in a few short years time all Malaysians can retire. Every single race will be rich, no more fighting over who is richer.
  • Hopefully EPF will buy gold from Genneva. Then we don’t have measly 5% return every year. Can have 24% return. Then Malaysia will have at least 50% millionaire by 2050 when people retired.
  • Genneva 20 – 30% return outperform every single fund in the world, even Warren Buffett. How is that even remotely possible?

If it is too good to be true, chances are, it is. Common sense tells us that this Genneva is nothing more than a Ponzi Scheme. Putting capital appreciation aside and assumed that you have invested RM100,000 in Genneva Gold. How are they able to pay you the ‘hibah’ on the 2nd year? The capital appreciation is yours to keep, they’ve already return you the 20-25% marked up price when you purchase the gold, therefore the only way for them to continue paying you is none other than to recruit new ‘investors’.

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Is Genneva Gold Sdn Bhd Malaysia and Singapore a Ponzi Scheme Scam?

As much as they want to twist the hibah or interest or investor or buyer word, a pyramid scheme is a pyramid scheme regardless of how it is sold to the victims.

World’s Strongest compressed wood table

This is definitely a compressed wood table, and amazingly it hold so many gold bars without collapsing. I am assuming those are 1kg gold bars.

  • (estimate) 21 columns x 30 bars x 1kg = 630kg.
  • Honda City – 1,155 kg

200kg seized gold bullion

Yup, according to Genneva World, BNM seized 200kg gold bullion, to put things into perspective. 200kg is 0.2 tons of gold.

  • Hong Kong Special Administrative Region – 2.1 tons gold
  • Republic of Fiji – 0.2 tons gold

That is 200kg gold in GennevaWorld office, how about those who brought back their physical gold instead of keeping it in their office? Genneva has more gold in their office than many other nations, perhaps even more gold than Maybank, CIMB, Public Bank, Kuwait Financial House and UOB. http://en.wikipedia.org/wiki/Gold_reserve

Playing with words

Genneva agents will try to convince you their system works by using bombastic words like ‘revolutionary’ or ‘blue ocean’ or ‘new business model’ etc, the best part is they can’t explain how it generates money. Their mother of all stories is Gold price will always go up and even if Genneva collapsed, they have nothing to fear because the Gold bar is in their hand, that is if they did not leave it with Genneva for safe keeping in exchange for a higher 4-5% hibah per month as oppose to taking 1.5 – 2% hibah for bringing back the gold.

The reason why this pyramid scheme collapse is because Gold price has been stagnant for almost 1 year, it hardly moves up.

Genneva Singapore Doesn’t Pay Their Customer

Probably the market in Singapore has saturated and the pyramid is collapsing or collapsed. Watch the news, if this is not the case of cheating, I am speechless. This is part 2, Youtube for part 1 and 3.

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