Is SwissCash for real?

This was a old post, but I reposted this now that more ponzi schemes are in Singapore. Also see Kinlian blog.


I first heard of this new investment scheme call SwissCash from Tim. At that time, its 300% profit over 27 months claim sound just too incredible to believe and I left it to one side. Later on, I have old friends calling me who also told me about SwissCash. Not only were they investors, some were also referrers (those who earns a commission by getting others to invest). It peaked my interest because my friends were reaping quite healthy profits from it either being an investor and/or a referrer. Of course, the catch here is that SwissCash is an offshore investment scheme, you basically have to trust your money with the referrer.

Now a quick search in the internet will reveal that a lot of people are calling SwissCash a scam. In Malaysia, some prominent people has been charge with running SwissCash. Now is SwissCash really a scam?

Well, it depends on how you look at it. Most of us would define a scam as some scheme that make your part with your money. However, I do know of many SwissCash investors who have been getting the promised returns monthly. In a way, to these people, it cannot be a scam. Yet there have been reports of referrers running away with the money. Now that is a scam, to those victims. Thus, in such cases, whether it becomes a scam or not depends on the referrers’ honesty to return you the money and profits on time and so on down the pyramid chain. The problem with this is that once someone up the pryramid decides to run away with the money, it will effect everyone else down the line, very risky indeed.

If you question it from a business entity point of view, there are a lot of questions waiting to be answered.

The foremost would be “What are their investment portfolio like?” A detailed look at the SwissCash website tells you that they invests in the money in various places like equities, forex and hedging amongst others. That is so much details you will know from the website. If you ask any of their referrers, you may probably only hear as much if not less. To be fair, how many of us really bother about what companies do with our money as long as we get the returns? Do you know in details exactly where your, e.g. AIG insurance investment funds are going? I don’t. However, they do send you their portfolio of their investments and profit and loss in an annual booklet. Can SwissCash produce the same on demand? Have you seen it?

Now, it tries very hard to make itself sound legitimate with the “swiss” brand, when it is neither a swiss company nor does it operate in Switzerland. In fact, the company is registered in the Dominican Republic with a PO box address and have an office address in New York, which looks like a small suite rather than a $9 billion company.

Google Answers have a good breakdown investigation of this issue.

Barclay’s Bank is named as the beneficiary bank… sound legit right? Actually, this is no more than telling me that POSB is the beneficiary bank. You open an account there, its becomes beneficiary bank simple as that. Interestingly, SwissCash does not hold an account there, another company called SMF International Limited does. Its registered in the Bahamas. Hmmm…

We have not even talked about its claim of being a $9 billion company, a CEO that nobody has heard of or even seen, its cheapo looking website and if SwissCash investments really works, why aren’t other investment banks doing the same?

If it is a scam, how could people be actually be earning profits from their investments? Shouldn’t scams be taking money away from people and, like, disappearing?

How SwissCash most likely operates is through a Ponzi Scheme. Organisations operating such schemes does not invest your money anywhere. How investors can keep getting their profits is through reinvestments by others and the continual introduction of new investors. In other words, the profits earned from investments is actually some other person’s investments or reinvestments. However, once the investors starts to slow down and people are cashing out their investment, it will collapse. Those who are referring at the early stages of the scheme will benefit the most as they are at the top of the pyramid.

What do I think about this? As the saying goes, “If $1 million drop down on your laps, wouldn’t you want to take it?” SwissCash is still in its early stages, if I really need that extra buck and I know I will get the promised returns at this stage why not? However, I don’t really need that extra buck at the moment. Even then, knowing how some (or a lot of) people may loose a lots of money when the scheme finally collapse, I wouldn’t like it knowing that their money was in my pocket, even though it may be 5 years down the road.

I think people genuinely believe that SwissCash work for them and that they are helping themselves and their investors. There is a magic to it that makes you want to believe that it works and the magic is the high and quick turnover of your investments, totally against what other greedy investments banks have been trying to make you believe about investments, with their puny and tiny returns. Down with those greedy CEOs, their big houses and their expensive sports cars!

If you really want to be an investor, well, as in all financial advise, always invest your spare cash, not the money you really need to use. So that if anything goes wrong, you don’t have to jump into an oncoming train.

If you are referrer now, my advise is to get out within the 2 years after you have earned enough. And for the next few years, try to distance yourself from the scheme and the people who have invested through you. Unfortunately, some of them will be your good friends and relatives.

I hope that I am not making a moral judgement here, my own decision not to be an investor or referrer in SwissCash has more to do with selfish self-preservation then moral righteousness. As a Buddhist, I (simplistically speaking) believe it earning good Karma credits and I certainly don’t want to know that I am getting bad brownie points for this and neither do I want people chasing me for their money in the next life.

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