True Story of Financial Fraud - What a scam looks like

If I could tell you the number of stories from women (and men) that come to me after they have lost tens of thousands of dollars to a scam/fraud or similar set up... oooooof. I think it would actually now total in the millions. 

This one story is an epic tale, and now it's ready to be told publicly so you know some of the behind the scenes of what happens with an actual financial scam operation. 

This is one of the reasons I am so passionate about teaching ACTUAL knowledge of how to build financial wealth yourself (rather than handing money over to someone else). To learn more about Investing Bootcamp, head to: www.investingbabe.com

xo
Simone

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Coupons earn more and make more money you're in the right place. I spent over 10 years learning from the most brilliant minds in money, wealth, and investing to take myself from 20 K in debt to a seven figure investment portfolio. Join in. As I share the secrets towards more growth, money investing and ultimately freedom. My name is Simone, miss Huggins, and welcome to ms. Wealthy's kissed my money podcast.

Okay,

Welcome back to another episode of the kiss, my money podcast. Hey guys, I'm Simone. It's been a couple of weeks since I've last recorded an episode, and I know that there are a bunch of new followers and listeners here on the podcast, and I wanted to say welcome. Welcome. I am so sorry that it's been a little bit. I there's always something. There's always something I've actually been focusing a fair bit on abundance aligned, um, changing the format of investing bootcamp, which is really exciting and also away at the moment, which has just been a breath of fresh air to get out of the hub of being in the office while the home office in the home, particularly because I know it's so many people are feeling the effects right now with cabin fever and regardless of where you are in the world, I mean, there isn't a single person that isn't affected by COVID right.

Oh, so just know too, on a total side note that honestly it's totally okay to feel all of the emotions that come up with times like this in Australia, we have had, you know, ups and downs. We've had different States close different borders. We've had different States totally go into a lockdown that we haven't seen before. And I know that other countries and States and other in other countries around the world are also experiencing or have experienced the same thing. And Hey, I just, I get it. I know, I know what it's like. And I know collectively that we are all, you know, facing really new times right now, you know? And I just want you to know that you can always reach out to me or the team if you are really struggling with really anything, if you just need someone to talk to, because I really feel like that's kind of not said enough at the moment that is okay to be feeling or struggling in a certain way around everything that's going on.

You know, it's okay to feel down or depressed or just really like, Oh my God, is that so normal right now? Oh, okay. That was a slight segue. So today I want to talk to you about a story that has really been progressed over the last, over the last number of months. And unfortunately it's not an uncommon story. It's also not the first time I have heard a financial scam story or a story where, you know, people have come to me and gone, I've just, I've literally lost $10,000. I've lost $50,000. I've lost $80,000. I've lost $120,000. And what do I do? How did this happen? I feel so stupid. And it's so interesting that it's not interesting, but recently, particularly as we're looking at scaling ms. Wealthy in different ways, and I'm really stepping into how can I lead this movement and what is the next phase for the company.

And as we're kind of growing and, you know, we are hearing from the community and the team hears from the community and a couple of things that have been coming up as consistent themes is this idea of, is this a scam, meaning ms. Wealthy as a company, uh, or, you know, comments like I'm really starting to, like, I really don't know how to trust this. Are you a registered company? Um, how do I know that you're real, you know, like the word scam is actually often brought up and I totally get it. I totally get it. The first time it kind of was approached or suggested or said to me, I was definitely triggered, but I was kind of, you know, I was new to the, to the game, essentially the business game, this is years ago. And now when I hear it, I just, there is no trigger.

There is no alarm because I totally understand. Unfortunately, the financial industry is full of them. It is known to be an area where it's completely rough and where we have situations like the Royal commission that investigates literally the leading companies, the leading companies, you guys, that we are meant to entrust everything with. And then the government has to investigate them for internal fraud for misconduct misconduct. Like, you know, the idea that you can't trust these enterprises, these financial companies, these institutions is not unfounded. And I totally understand where the skepticism comes from. Like boy, do I understand? And I really, really don't think that really anyone hasn't heard some form of a story, whether it's scam or fraud. I mean, I couldn't count the number of stories really on two hands and yes, sure. You know, being in the position I'm in now, people do come to me now at this, with this stuff, I kind of hear so much about it.

And it really, it really saddens me because, you know, I just, it, it is really actually quite difficult to explain which you will see through the story I'm telling you. I'm about to tell you today that it is actually really hard to determine if a company is legitimate and real and if they have their best interest, you know, if they have your best interests at heart hot. And, and so yeah, if you've ever gone through it before, if you've ever experienced it, if you know someone that has experienced, I just want you to know you are not stupid. Okay. If you've ever, I've gone through something before where you've lost money, you are not stupid. And just remember that we weren't handed like a financial handbook. We weren't handed the keys to how to build wealth and unlock the code to the investing game during school.

But, you know, I mean, we learned about how to sect a frog, but that was super useful, right? I mean, the things that really need to be in the education system, even though the education system is messed up as it is, Oh enough, I'm not going to go there. Um, so just, you know, just know, like to give yourself a break, if you've ever been through this before and know that a healthy amount of sketches skepticism is, you know, it's, it's good. It's good to have that particularly in the industry where fraud and misconduct is so rife and there does come a point where you have to really just step out and go, okay, what am I I do about it? You know? And at least get the knowledge. And that is honestly, it's a really large part of why investing bootcamp exists, because it is about putting the financial power, the financial knowledge in your hands, so that you know exactly how the game works.

And even if you do choose to use someone else, which I don't really know, actually, anyone that has come through bootcamp that has chosen to go to a planner to control or manage their money. Uh, everyone that has come through has con has the control and manages their investment portfolio themselves. Uh, but even if you do choose, then at least you the background of what to actually know about how the game works and the ins and outs and the actual knowledge, so that you're empowered enough to have the confidence about your long-term wealth creation and what is actually happening with your money. Right? So this story I'm going to tell you today is honestly, it's, it's pretty unbelievable when I have told it before to people that are close to me. And by the way, yes, I have got permission to tell his story. I am changing the names though, to protect those involved.

Uh, when I have told this story before it, uh, my God, it really is it's, it's it be with a level of shock factor and jaw-dropping, and like, you know what, the Fox, a lot of those, and I'm going to do my best to tell it, answering all the questions that inevitably come up, because I've only ever told this in the way of telling someone else whether then respond with questions about what happened and how'd that work. And I understand him, so I'm going to do my best, and then anything that's left out, because I want you to know all the ins and outs you guys can write in just like DM ms. Wealthy on Instagram or whatever, and shoot me your questions so that I can answer them in an upcoming episode. Yeah. Because this story is, yeah, it's a bit shocking. So let's dive in Joey.

This story started actually a number of months ago and it was, it was initially, you know, I mean, now I look back on the events that unfolded and now I can kind of look back on the very first thing, the very first precursor to this all unfolding and all happening. And now I can kind of really look at the whole big picture, but at the time, you know, when, when certain things happen in your life and you really just don't think much of it, I certainly did. I certainly did not. When this woman, and for the sake of this episode, we are going to call her Sarah. When Sarah came to me, she was kind of really initially excited about investing in IPO, investing in specifically Airbnb's IPO. And this was now we're in August, 2020. This was probably at the beginning of the year, actually, no, it was towards the end of last year.

She had put some money into the Airbnb IPO and she was kind of telling you about it. And I mean, full disclosure, I don't invest in IPO's personally. And I go through the whole raft of reasons, why that's the case and what to look out for with IPO's and why I don't do it inside investing boot camp, because there is actually a lot to know when a company is going public on the stock exchange. But Sarah was telling me about how she'd put some money into the Airbnb IPO and how it was really promising. You know, I mean, obviously hindsight right now, given everything that's happened with COVID and the bottom has fallen out of a lot of Airbnb properties. I know, um, who knows what the future holds and what the future looks like around that. But at the time, Airbnb was definitely an exciting potential IPO company that was upcoming.

And so, like I said, I didn't really think much of it until fast forward, really kind of a number of months. I think this was really recollecting my memory. This is towards the back end of 2019, fast forward a couple, you know, a few months. And then we're looking at early 2020, and we're seeing what we're seeing things start to move in the market around the volatility because of what was happening with COVID. And so this was kind of one we're seeing companies really shift, right? We're seeing a transition from particular sectors in the market, uh, particularly around medical and biotech, those that sector, uh, particularly individual companies and that within that sector, seriously soaring in terms of price, because, you know, they were pipped to be the leading, uh, in terms of testing. They were P you know, these are the companies that were picked also to be the leading companies that were developing, or at least trying to find a vaccine.

And as the world watched on, of course, the, these particular medical and biotech companies started storing. So Sarah started asking me questions, like, what do you think of this company? What do you think of this other company in, in the medical field in biotech? And she started asking about one company in particular, this one company being Madonna, Madonna health listed on pretty sure that it's the NASDAQ, it's the NASDAQ or the NYC. And so in the us, and, you know, pretty well-established company. And this is the early days really of what we were kind of starting to see in the field. You know, one company was being talked about as being, this is the leader to develop the vaccine, and then there was another company. And then, you know, you know, how the news goes, just, they're just reporting stuff that with often really nothing to massively back it up.

And so it was creating all this hype. So she kind of like started asking me about, Oh, that's my phone about this one particular company. And just as a side note, this happens a lot for me, people ask me about individual companies a lot, and sometimes I'll know about them sometimes I won't, but here's where it gets interesting, unless I actually have a deep dive on the fundamentals of that company and the actual values from particularly around all their ratios to actually know exactly how that company is positioned, whether it's undervalued or overvalued or not. I am not going to know there are literally hundreds of thousands of companies across all of the multiple markets around the world. So most of the time answer is I really don't know. Uh, also as a side to that side note, uh, in terms of actual fundamental analysis and value investing, it really is still very much open to interpretation.

Any two people can take any of the value ratios and any other fundamentals around, you know, individual stocks and take very different perspectives out of it, particularly when our biases and belief systems come into play, we don't realize it, but how our brain is wired is to look for patterns and it will look for patterns based on our beliefs, which is different for everyone. So everyone's reality and everyone's perception, even though numbers can paint a certain picture, uh, really can look very, very different despite the actual numbers being the same. This is actually why I specifically, uh, I'm a very big believer in technical analysis. And, and the reason for this is it's really no margin yeah. For our biases, which is the biggest, the number one determining factor of why you will fail as an investor because our biases and our belief system and our emotions and your irrational investing comes into play, which really sabotages our success as a long-term investor.

Anyway, coming back to the story, that was a short recess. So, uh, Sarah was asking me about this company, Madonna, I didn't know anything about them. Yes. It was very easy to kind of look at this company and, you know, look at their numbers, look at where they're at and watch them the next day, the next day, the next day, as this unfolded of literally seeing the price of this company go up and up and up and up and in this space. So probably really about a week from the conversation of when Sarah had mentioned Madonna to when she started to seriously talk about investing in this one particular stock Madrona, it was really quite a short space of time. And what had transpired over this time was Sarah was in conversation with this same company it's called SPK partners, the same company that is essentially a fund manager, let's call it.

And they were the fund manager that was holding [inaudible] the RPO or Airbnb. So she had already invested in this company and she had already put money into the IPO for Airbnb. Now, think of now where we're at, right? In terms of the date, we're looking at the first quarter of 20, 20, early 2020. And we're seeing things start to move in the market and we're starting to see like massive, big trends, really start to come into reality. This is all happening at a time where really no one knew what was going to happen. We were only starting to see lockdowns. This was all very new to the public. I mean, now we know what we know, you know, but as it was kind of transpiring at the time, what kind of really, no one knew it was going to look like how it looks now.

And so I alarm bells to me started going off at this point because, eh, I knew that the Airbnb IPO was put on hold. It was postponed, which is very common. It happens a lot for new companies. It happened recently for a, we work for example, which is a massive global coworking space that, you know, as soon as a complete company goes from a private company, which has no responsibility to open their books except to their private, like venture cap investors when they open their books. For example, because they have to, if they want to IPO on the stock market, because it becomes a publicly listed company, IPO stands for initial public offering, and that is their debut onto the stock market. So they have to open their books. And this happened with, we will, um, it was catastrophic really. We work with one of those companies that was just like, everyone loves them.

They really just thought it, you know, they just kept soaring and soaring soaring. And then when they open their books, it was like, Oh my God, you were in so much debt. It doesn't stack up. How could you possibly keep running? There was like this one Chinese investor that put a ton of money that it kept backing. We work to really just, I guess, hoping maybe they, maybe they will turn around. Maybe they will become whatever the next Google who knows at this point. But this one Chinese investor was putting literally billions. There is a really, there's a sh very short doco on, um, the fail of the, we work IPO. Uh, and it's really quite interesting. And when they, their books, it was like, wow, you can't actually run a successful company. And so the IPO got pushed back and it wasn't the same reason for Airbnb.

There's always complications when IPOing, uh, but what meant, what happened was it was pushed back. And so there was technically no IPO. There was technically nothing to actually physically invest in when it came to this Airbnb IPO. So that was the first initial red flag to me because I was kind of like, well, hold up a minute, Sarah. And she was, you know, bear in mind, Teresa was not, is not, and was not a client. So I had no in-depth knowledge. I wasn't talking her through the process. I hadn't, you know, she didn't have the knowledge for example, that you get an investing bootcamp, which had she, it would be a very different story. But, uh, at this point I was kind of really just getting the information that she was telling me. And so that was the first red flag. And I had asked some questions at this point of kind of like, hold out, like what's happening with the, that I-beam that Airbnb IPO, where is that money being held?

The IPO has been pushed back. That doesn't make any sense. How could you have anything invested? And her response was well, they're actually warrants. And that is true to a point, but when there's still, no, I figured that actually exists. The warrant can't exist. Anyway, a warrant is a relatively complex financial instrument that comes into play around specific shares, but it can't exist if there's nothing to actually have that warrant on, there's no basis. Right. So that was the first, that was the first what's going on here. And then kind of over that week, I started hearing more. So Sarah started to coming, coming to me and Sarah is a neighbor. So this is why the proximity was there. And she was kind of telling me, you know, we'd see each other outside when she was gardening, always see each other. When I was taking Holly, my pug out for a walk or welcome home.

And we were coming home, you know, particularly at the time when really everyone was living at home and the only social exposure we were getting at the time, cause we were in, I think a stage three lockdown potentially at that point, uh, was you literally could only see the people around you. You can only get takeaway. There was nothing open. And so we're seeing Sarah, you know, a relatively fair amount. So I was getting these updates and I was definitely interested, uh, as well, because I was just out of interest watching the Madonna price kind of go up as well. And I was interested in, in her investment and what she was doing and, and stuff like. So she started telling me the next day she was like, so what do you actually think? Did you, did you check out this company that I was telling you about SPK partners?

They are the fund manager. Uh, did you check out at Madrona and blah, blah, blah. And I explained that, you know, I'm not a value investor. I don't look at particular like fundamentals of a company. That's an I don't stock pick. That's not how I invest. I look at technicals and that's how I teach everyone in investing bootcamp. And it's a much more reliable method. At least that's my view. Everyone else has a different view. Um, but I know the numbers back it up. Hallelujah. They back it up, particularly when we look at the actual success rate of value investors, AKA stock pickers, AA, AKA, uh, fundamental analysis investors is that only 4%, 4%, you guys, four per cent beat the market 4%. And these are tall. I'm talking about like professionals who do it for a full time job. Only 4% beat the market.

Hmm. Well, they sink in for a minute, like the numbers back up. Why I just people lose money and the biases around it, uh, most people were kind of don't look at how their money would have performed if they invested at a different way because our belief system is no, we're fine. We're doing great work, greener, great investors. Most people. In fact, I never actually met anyone except for those in my, in my network. Would that look into technical analysis around stocks actually compare their performance. If they stock pick against the market, I've never met anyone literally. And this is why people think that they are great investors. They don't actually realize that they're not doing so well in terms of performance. How many tangents am I going on in this episode? There's a lot to cover you guys. Okay. So at this point I'm kind of like looking at it.

So I explained to explain, you know, I don't stock people, blah, blah, blah, but I didn't look at the company. Cool. And obviously there's also a lot of hype at this point around the company, right. Which can drive the stock process up. That doesn't mean the value of the company goes up. And so an initial price surge can just be very temporary. This happens. This has happened in the past a lot with Tesla, um, which is a total other different side tangent. I'm not going to go into now at this point, Madonna is maybe going up 20% in the space of a week, which is a lot that's a lot. And even as a seasoned investor, even as someone that teaches and really goes on about the mindset piece, being so important around investing, even I was like, whew, getting a bit of FOMO here, like, you know, could really invest in this company.

Totally irrational emotion-based decision with nothing to back it up, you know, thinking, wow, it's really soaring. Like, wow. You know, there's all these news articles about how Madrona is like tipped to be one of the leading and the vaccine creator or the, or the 15 minute test on COVID. You know, like I did not, I did not. Don't worry. I did not, uh, fall into the trap of following on following through on any of that emotion based decision-making I didn't did not invest in Madonna, but I was looking at it. I was like, Oh, this is interesting. Cool. And so Sarah was, you know, asking me this opinion. And then she was asking my opinion of SPK partners. And I was like, look, I didn't really look into them like a whole lot. I saw they had a website, but I didn't really see anything about the people that run it or like, I don't know them.

Um, and then it's revealed at this point that Sarah had already actually invested with them and put a large amount of money into Madonna. So when I say a large amount of money, I'm talking $80,000, $80,000 into one company. And for anyone listening right now, not in investing bootcamp, which I know I have a bunch of podcast cost listeners that aren't yet in that program or that haven't joined, or maybe, you know, maybe you never will. It really doesn't matter, but you need to hear this. Everyone needs to hear this when we think about, and when we look at diversification and say, you just have whatever, a hundred thousand dollars, $200,000, and it doesn't really matter that, you know what, starting with that, that's not the point. Even if you have a thousand dollars, the idea is with diversification, you wouldn't put everything in to one company on a hunch with no actual in-depth research.

And so really at this point I was thinking that the conversation was a discussion about an opinion, you know, and I was going to elaborate, but I didn't realize at this point, she'd already dived headfirst with both feet in to invest $80,000 into one company, one, you guys, this is in addition to $40,000 that was put into the Airbnb IPO, into the warrants on that IPO with remember an IPO that doesn't exist. So now I'm like, Holy . What, what, and I'm kind of relatively shell shocked. I mean, you know, I said at the beginning that I've heard a lot of stories, a lot, a lot, a lot tens of thousands of dollars, particularly around Bitcoin and cryptocurrency and definitely around mining. Uh, and also in Forex those two, um, those two industries specifically, uh, pretty rife with fraud. Um, and I've heard a lot of stories, really, most of the money being lost coming from both of those two industries, cryptocurrency and Forex.

And there was a lot to know around both of them as well. It's really quite complex, really quite in depth. And there are reasons as to why that happens. Again. I talk about that in investing very camp because there's a lot to know, and those industries are very different to the stock market cryptocurrency, very, very different because it's unregulated. Um, whereas the stock market is regulated. Okay. Coming back. So, uh, so now at this point I'm like, okay, well, Hey, it's not my decision. You know, she's made this decision, it's her life, it's her money. She's deciding what to do with it. Good for her. The price is going up. Like, you know, I wish her the best of luck. She's an amazing, beautiful, caring, stunning, just the biggest heart of anyone that you will ever meet. And she has the most amazing stories. Um, you know, just an incredible life. She's lived such a very, just amazing life. And she just, wow. She is so generous and full of life. And, you know, she's just like someone just like, you're just a really awesome person. So I genuinely was like, I just wishing the best of luck on this. Right.

Okay. So then maybe a week goes past or so. And you know, I see her again and we chat about how it's all going and I'm really happy for. And she tells me that her friend has also invested in to this as well. So then I'm thinking, okay, this is again, another pretty huge chunk of money. Just this one company. Um, I don't nothing about her friends investments. So maybe her investment of, I think it was from memory 20 or 30,000, uh, into this one company Medona as well was, you know, maybe that was a small portion of her investment portfolio at this point. I really don't know what the numbers are in terms of it being a percentage of their hope portfolio, because of course it's always a consideration, right. Um, and then another few days goes past and I see her again. And then she asks me

Again, The question of whether I had looked into this specific fund, this accompany, this fund manager, they were called SPK partners. And I said, no, like, I mean, I looked at them, I'd never heard of them, like remembering to, there are literally hundreds and hundreds of different fund managers. Some can be super small. Some can have hundreds of clients that have, you know, small portions of money. Some can have just a few clients that have millions or multi-millions, um, for each client. So really there were just so many fund managers and often people do ask me what I think of, you know, so-and-so fund manager. And most of the time, pretty much, I would say a hundred percent of the time. I have never heard of the fund manager that people are me about this. Actually as a side note, got asked as a question, insight, investing bootcamp, um, uh, the live QA group call last week, uh, about this.

And I ran through considerations about really what to understand when different fund managers put their returns on their website about how they performed against different indexes and benchmarks and, um, how what's the, what transparent they are about their fee structure and really what to know what you're looking at, uh, because it's not straightforward. And really all of this, the knowledge is just equipping you to be more confident, to be more in control, to have more power around what you're doing with your money. If, if, if you ever decide to hand your money over to someone, I don't ever make that a bad thing or a wrong thing, if that is the decision you want to make

The challenge, I see He is that so many people do it without the knowledge of what's actually being done without the knowledge of having a clear view of how everything works. So of course, how could you be confident? How could you stand in your power on that when someone else is managing your money or managing your investment portfolio for you. But obviously I always encourage people to do it their own because I show you that you really can be as good as the quote unquote experts. Okay. So

Anyway, she has Asked me about this company and I, you know, I had taken a brief look at, I'd never heard of them before, and I'd said no. And then she said, okay, well, my friend, uh, who also invested in the shares as well in Madonna has flagged something with me. She found an article on a blog person where about them being a scam.

And I was like, okay, is it legitimate? Is it, you know, obviously you can find a bunch of those threads where people have like discussion forums that are open, that you can see just because someone calls someone or something, a scam doesn't necessarily mean that it is planning. People use that term and throw it around Willy nilly and it have actually no basis or meaning. And it can be quite damaging when people do use it in, not in the correct context, turns out

This Context was true. So I don't know this person that posted on the discussion forum, their actual, um, their actual experience and whether they had invested money.

And they didn't say anything about that. But yeah,

At the very next day I see her she's at her car and she asks if she can come up and chat about some of some, some, some things that just don't seem right. I was like, yeah, of course come up. So we kind of like start looking at a couple of things. And at this point, I mean, obviously there were some red flags that I had seen, but it wasn't my portfolio. She was not a client. It wasn't something that I was managing, you know, so of course it wasn't something I was fully across. She comes out, we start looking at some, some things that is important to know when you have your money with someone else. Right. And so we started doing some digging, well, I started doing some digging on because I know how companies work, how you need to set up a company, how you need to register with the right financial regulations, what an actual receipt looks like in terms of you having a documentation around your specific shares, uh, what the background is like, what everything, and it's different regardless of where you are. So they're going to be called different things. If you're training in from the UK or the U S they're going to record the

Different, it'll

Have different terminology, but essentially regardless of where you are, every com, every country has regulation bodies. And we have obviously very specific stock exchanges in Australia. It's the ASX in the UK. It's the LSE, the London stock exchange in the U S it like you have to the NASDAQ and the NYC. And

Depending on where

You are, you get different things. So in Australia, you get what it's called, either a chest number or hidden number, a holder identification number. And really these are just, it's just a record for you to go, yes, I'm a holder of now shares listed on the exchange. Now, when we started looking at a couple of things, in terms of her receipt of record, when she had deposited this money, this is when red flags started going off like tenfold. And I inherited some amazing skills from my mother who I swear to God should have been a private detective, because she is so good at asking and digging into the minutia of detail on things. And fortunately for me, I know what to look for because I know this industry in and out, right? So I looked at a couple of things, a firstly, they had an ABN, they also had an ACN, which is your Australian business number or your Australian company number that, that register also registered addresses, which when you registered address, you also have to list the directors of the company.

So at this point, I'm thinking, okay, well we have listed company directors. That's a good thing. Then we look at the address that is listed on their website. It's a physical, it's a real address. And we go one step further. And I tell her to call the building manager of this company. That's based in Melbourne, uh, in Melbourne CBD and ask them who was, um, who is the tenant on that floor? We call them, um, and they have no list of tenant under this name of SPK partners, obviously red flag, a couple of other things start happening. We look at the director of the company as who they are listed. And none of the directors that are listed that names is anyone that she's spoken to. So the names that she has that she's spoken to that claim to be part of this company, um, none of them match up.

So we started kind of going, obviously you can have staff, but they, these people that were part of SPK had already said that, Oh, you know, they, they run the company. So you, you know, you start to see things unravel pretty quick. The other thing that was also a red flag was obviously there was no actual IPO on the Airbnb portion. And we're looking at kind of what is happening with Madonna and there's no kind of record, so to speak. There's nothing actually listed. Obviously some, a donor is listed on. I'm pretty sure it's the NYC potentially even Azek. Uh, but it's not ASX, but there's no record. There's really nothing. She had asked them. Um, a few days prior after she got a little bit worried about her because her friend had flying this, you know, discussion forum and ask them for a receipt of records just to, to, you know, solidify essentially her investment. And they did send something through. Here's the thing. It is so easy to make up something in a word document and create a PDF. Anyone can do that, put a little header, um, create it and look like it's an invoice created and put a couple of special things on it. Like it doesn't actually mean anything. It has no meaning. And it's so interesting because when I had retold this story the first time, and I think it was to my mom, that I retold the story too, because she had, um,

Matt, you know, Matt,

Yeah. This woman as well. And so she kind of knew that she was partially part of my life in some way. And, and I was retelling it and some, in some Mamba asking me, she was like, well, so what do you look for? Like, how do you know then? And this is the point that I, it dawned on me that it's so hard. It is so hard. You guys, they have a registered company that have registered directors of that company that have a listed address. Okay, sure. It's fake. But unless you actually call a building manager, that's way that the company is and ask who the tenants are, you're not going to know that their company is fake. They have a website, they created a PDF that looked like a record of holdings. Like there is no way that you would actually ever question it until you got to the point of wanting to go and take out your money. Right. So I'm kind of explaining this and going actually, how would you know, it's just that, because I know the smaller things to look out for, because they're not the smaller things of like what an actual record,

You know, particularly, even

With a broker, for example, um, of, of what it looks like. I know about hidden, hidden numbers and chest numbers. And I know that you should have a record, at least if it's listed on the NASDAQ or the NYC, I know that the IPO doesn't exist. And so how could they have a record or something that isn't actually in existence? So it's the really small things that started adding up. And what I realized is this is can only really come from someone that genuinely knows the industry inside out. So a couple of other things happen, and this is where SPK partners got pretty. I'm going to say, I'm going to use the word sophisticated, but that's kind of a stretch in this scenario. It kind of is. So what they had done was they registered their company as being, as it being cold, a variety of partners.

So the backing company was right as partners. And this is very common too. You can have a backing company name that is like the proprietary limited company. And then have like a, the actual name that you named the business from a public standpoint, doesn't necessarily have to always match up with what you've registered the as. But so they've listed the backing company as being breath, as partners, that company had a different ACN. So this is where it starts to go, what is going on? Right? Um, but this is where it kind of gets a little bit sophisticated sort of, whereas as partners that ACN, they also are registered as a financial services company. So they, you have to have a financial services license, okay. To sell financial products and they have a financial services license. You go to you type in that financial services license, and that ACN, and it comes out with VRF has capital website.

His, the small difference, what they had used was varieties, capital, an international fund. I'd never, again, I'd never heard of them before, but they're a legitimate company that an international base, they have an Australian arm, uh, and their financial services license was listed against breath. Has partners ever IFE has capital, but they had named their company breath as partners. Just same first name, [inaudible] different, last name, capital, best partners. Can people do this enlist, a company name in that way? Yes, it's totally possible. This is where it's like, Oh, it kind of gets messy. Right? And so they were listing this information as being theirs, even though it wasn't now at this point, I didn't know this at this moment, this comes later. But at this point, what SPK partners had actually done is one they'd entered into a well a scam, right? So it's financial fraud anyway, because you are selling people, financial product without literally actually having that financial product.

But then two, it's a complete different criminal act when you start pretending to be some another company. So at this point, and we found that found this out later, because at this point I'm looking at varieties, capital, the true and real company. And I'm looking at who they're listed as the actual unit company name, um, and who the head of the, uh, the directors are and everything. And, and I, and I say to her, I was like, give them a call. Let's give this company a call. If they're the holding company and SBK partners are a subsidiary, you know, uh, the company within that company, then they will obviously know, and they can just sort this out and you can put everything to rest in the back of my mind, I am at this point 95 to 99% that this is a scam. I also have to be sure before I'm presenting this as an option, because if anyone has put it, well, this is what happened.

She'd put in $120,000 and her friend of another 20 or so thousand dollars into this company, I have to inform her lightly, but also firmly that she's just putting collectively over $150,000 into a scam. And it's unlikely to ever see that again, it's unlikely to ever get that back. So this is kind of simultaneously dawning on me, the seriousness of . This is actually a very real or actually a not real thing. Um, and that I have to be the one to tell her because I'm uncovering all of this deep stuff. Right? The other thing that this company had gone to the lengths of was calling that called himself the last name of the last name of the director, of the real company. Like just small things like that, even though that person didn't exist, they made up that name. So it's small things that even if you did at surface level, look into their company, you could go, Oh, it's the same last name.

They must be the family. They must be like part of, you know, the same, it's the same arm. So you wouldn't question it. So they done certain things at least enough to have the illusion of them being real. Then as you know, small other things as well, like the testimonials on their website were completely made up. And when you, you can Google image, search and image, just, you know, quick little tech hack for anyone out there. Um, if you ever want to know what image comes from, you can literally put an image into Google search and it will search that image. When you put that testimonial images from their website into a Google image search, it comes up with this random person. One of them was like some, I don't know, congressmen in the us, um, that obviously had a different name to the name they'd listed on the website.

So they just ripped someone's photo off the internet and created this fake testimonial. So again, you can create the illusion of having credibility when really it's completely made up. So it was just, it was a bunch of these little things that just kept being flagged the building, you know, th the tenant listing, they didn't exist in that building. They had never existed in that building. We called the company who were really listed in the building that they listed as the address. And they're like, no, we've been here five years. We take up the entire floor. No one's ever, no one else has ever existed on this floor. We are not a financial services company. So they were just making up left, right. And center. So I say to Sarah, is that my calling, is that her name that I made out or coworker Sarah?

I actually can't remember now got she's Sarah from neuron. Um, I said, is Eric give riotous capital is real company and a call and let's track to them. She does. She calls them. Um, no one picks up leaves a message gets over the phone. We start chatting. Uh, we're looking into a couple of other things at this point, my husband, who was working from home obviously, cause of COVID, uh, also comes out and he starts kind of helping as well. Uh, and he's a management consultant. So he has a little background of really like digging deep into companies as well. So he has enough of a, a base knowledge of like what to look for and stuff. And obviously knowing that my entire background is investing in trading, you know, he gets it. So he's kind of helping and looking into some other stuff as well.

In the meantime, maybe an hour goes by and Sarah's phone rings and it's a woman from varieties, capital, the real company. And we start chatting to her and she goes, Hey, I just happened to be head of legal. There's no one in the office right now, you know, because of COVID. And, um, I just came in, I saw your message and the head of our company, uh, is in meetings like it's not available, but what can I help you with? She happens to be head of legal, perfect person to be talking to. Right. So Sarah kind of briefly explained that she had invested in SPK partners and invest in Madonna and blah, blah, blah. Um, that you're listed as the, that the AFL number, the Australian financial services, license number, uh, and your it's it's called for [inaudible]. And you know, it all seems to be matching up and she goes, no, that's not us.

I have never heard of that company. We don't specifically, uh, help you invest in Madonna. Um, we also don't do IPO's in Airbnb, so no, that's, that's not us and word for word, that doesn't sound right to me, that sounds like a scam. So basically the bomb was dropped at that point and everything became a hundred percent, a hundred percent certain. And from that, this is very much a complete and utter fraud. I wouldn't say it is, it's not a Ponzi scheme. And if you don't know what a Ponzi scheme, it's basically where, you know, um, uh, if you have heard of what is the movie, I think it was it's the matter of Brian. No, Brian went off Bernie Madoff, Bernie Madoff, anyway, Ponzi scheme is, uh, were you invested in a fund and your money kind of goes in and that's the state, you know, they get 10 new clients and they put a bunch of money in it.

Anyone that wants to exit the fond or, you know, pull their money out that have been, say invested for five or 10 or whatever years, they basically just take the money from the new people that have put money into it. And at any point they want, people want to exit that is try and get a new client to then give the money to the people. And they make up these fake returns. And part of the reason Ponzi schemes is, you know, they became, I mean, they still happen. They still happen. But they, it was, it was a lot bigger kind of in the eighties and nineties. Uh, part of the reason that they're kind of super popular, so to speak is because they make up fake returns of like being, you know, this good, like, this is how good they are. That'd be, they beat the market by like three, four, five, six, 7% or, you know, or they double returns and people like, I didn't even know how this covers this company doing this.

Like how would they that good. And like that gives developed so much hype that people want to be invested in it. Cause they're the best. And then it turns out that it's all fake. So they're not part onesy scheme because this was literally just a scam, meaning they convince you to invest in a company, have a, have a entire front of business front. And that money just goes into something that is completely fake. It doesn't exist. So how it came about was Sarah had initially, um, gone, you know, search for Airbnb IPO and that she found this company that had listed SBK partners had listed a bunch of IPO's including Airbnb on their website as being like, yep, we can invest in this for you, contact us. And that's how it all happened. So the, you know, the question around, how did they get her information?

Did they just cold call her or no, it came from that, but it's just that what it came from was actually fake. It was completely made up and conversations pretty much just started from this. So the other things that it kind of was just weird, where they would only ever call her kind of after work hours, like at six or 7:00 PM, that would speak to her on the weekend, which I don't know of any fund honestly, or, you know, fund manager or financial institution that would speak to you, like on the phone, on a weekend. Um, other things where like, they weren't clear about their fees. I didn't. And when I asked Sarah about like, how did their fee structure work? What commission do they take? Why are they selling? You shares at a certain price when they bought, if they bought in wholesale. And that was their whole claim cause said, well, why don't you just, if you want to invest in this company, why don't you just invest directly into this company with your broker?

And her response was like, Oh, that they had bought it at a certain price and they've locked it in at a certain price, which can happen if you buy wholesale shares. And then, um, you on-sell it, if you are a financial provider, but obviously they're not. Um, and the other thing is, well, even if that does happen, once you take into account fees and what is also called a spread like a buy sell spread, which is basically the difference between what you want to buy it for, versus what someone has to sell it for which it's, it's usually a percentage. Once you take in all of that, into consideration, often any discount that you get, that they might buy it at wholesale, for meaning a quote unquote discounted price is often pretty much negated because you have to pay them fees. And I'm like, well, if you're investing in one company, one company, it's not like that creating like this elaborate complex, um, you know, specific tailored individualized portfolio to meet a certain objective.

It's just one company. What are you paying fees for? Right. Um, so it, nothing was clear about that. There was no contract, particularly around financial firms and financial products, so much of what they do, um, which I know drives me crazy financial advisors and planners, um, and money managers and fund providers. It drives them crazy actually how much paperwork they have to do. So even to do kind of like one small thing, it's like 12 pages of legal documents that you have to sign. It doesn't even cover them legal in legally. And anyway, which is insane because it, I mean, it, it should. And anyway, so there was none of that. There was no paperwork, there was no contract, there was no fee information. There was no PDs guide, meaning a product disclosure statement. There was none of that listed on their website. That was just, there was just nothing.

And it was a complete absence of anything. The other thing, red flag was they from private numbers, it was like blocked numbers. They had one mobile number, which they always called from, and there was no other number when you called that mobile number and they didn't pick up and it went to a message bank. It wasn't like a company name. It was like some other name you couldn't hear. It was just, it was just thing after thing after thing. And they seem like the smallest, tiny minute things that you wouldn't normally question, but you add all of them up and you just do any digging beyond surface level. Yeah.

Yeah. Turns out it's a scam. So what has happened since that point? Well, that was a Friday when all of that unraveled. And I remember so clearly because it had been a couple of hours that I had been helping Sarah on the couch. I was on my computer. She was on the phone, you know, we were calling different who was doing this deep, digging on these different companies and finding out this information. And I needed like an energetic, like release, cause it was so intense that I was like, look, I've got to, I've got to psych Holly, my pug, um, to the, to the dog park. Like I just need to, like, there's also nothing we can do at this point. Um, we're waiting for, uh, waiting for this woman who was at the head of the real company for her partner to just doubled, like triple confirm that, um, that he, you know, didn't have some other side company that wasn't part of that whole scheme.

Um, and then the other thing was we kind of didn't really have anything that we could go well, so that Sarah could technically report on. Right? So aside from the actual names that was listed against the company of this fake company that was registered, but we had to get everything in line before you go after them. The other thing is you don't want to call these people and then flag them as being scammed and then they go dark and then you don't get anything back. Like, I mean, I guess the question is at this point, how do you handle something like this? Right. Anyway, I needed to kind of just get out and go to the park. And my husband came and went for a walk and I was like, what, what, you know, realizing this is all kind of daunting and realizing that it was just 120 K probably gone to some offshore offshore scam that has a bunch of different arms turns out since then.

And this kind of evolved over the weekend and across Monday and Tuesday and the following weeks was yes, of course, I'm telling you the story now and probably gathering, worked it out that yes, they were a hundred percent of the scam, uh, the head of the real company, because it had become an actual criminal act that they had. Um, what's the word impersonated, this real company, therefore, you know, in terms of criminal charges, that that's become a whole new thing. So they were reported, um, their accounts were blocked because Sarah had deposited the money via, via Australian bank accounts, but each bank account was different. Each time those bank accounts were blocked. And this can only happen because the head of the real company actually obviously has a lot of different strong contacts. They had a legal firm that represents them internationally that got involved to help Sarah, because this is the other thing that Sarah had alerted this real company that this fake company was impo impersonating them well, using the information and pretending to be fake.

Now, if the real company ever got reported, um, and made claims against them, then their license would be suspended. And, um, their insurance, which is huge, would go through the absolute roof and literally make it pretty much not viable for them to operate, even though the report against them was fake because the true report is actually against a fake company. So this is where it actually gets kind of like really convoluted because really the head of the real company was like, I just want to say, thank you for alerting this to me so we could get on top of this. Because if I didn't know, then we could be in a position where we couldn't even run as a viable company, because we would have had reports if they kept going down this line. So he used his legal firm that, you know, that represents them as a company to help Sarah, to craft a couple of letters, to put, um, pressure on the right people kind of internally within. And then there was, there's a bunch of different levels that you can go in internally. Here's the kicker though. It's the kicker. Nothing happened from on the police side. Nothing. No, I really want to say that again. It really lends nothing which really still blows my mind that you can have $120,000 as a scam. And these people registered as being the cause. You have to register real names against the company.

You have the addresses because you have to list addresses. So then the question is like, how big do things have to get before the police even can vote and give a ? This is what's nuts. My only assumption is is that the federal police? Well, it's not, I mean, it's not actually a local police matter, but I mean, the only assumption is the federal place would own the ever get involved because they're actually trying to track down the head of, because really the likelihood is of these two kids. And I say that literally because they were two guys, I think there was one was 22 and one was 27. That was like the people that were talking Sarah that was running the scam from the Australian side, 22 and 27. They probably don't even know who the people are that run the scam from a top line level.

And so sure the police can go after them, but they can probably claim that they know nothing. They can probably claim that they didn't know that it was part of a scam. They could probably claim that they were just following orders. So since everything has happened, it's turned out that the scam is actually, uh, it's pretty big. Um, and it's, uh, the amount of money that has been lost is I think it's close to a million, um, in this one scan run from this one company they're based in the Philippines, um, money is all siphoned directly through there. And yeah, basically they just have a bunch of these fake websites up that are pretty much clones of the SPK partners. One, I think the SBK partners one has now since been taken down, but they did. There's just, whatever, another one we'll just pop up.

You can pretty easily create a fake website. It's not that hard. Um, and so, yeah, it's, it's basically, it's just money in the wind gone to some probably big run organization that, uh, just, I mean, they know what they're doing, right. They know what they're doing from a, we know how to just siphon money off and use little people as pawns to play out game. Now, where are the people that from the Australian and these fake guys, um, they're based in Melbourne, they actually had, so it's turn, it turned out. Um, they had really like real jobs. I think one was a plumber and one wasn't an electrician, no one was a tattoo artist. That's right. One was a tattoo artist. One was like, I don't know, a plumber and electrician or something. And so they had full-time jobs. And so they were just doing this on the side, which is why they would do calls in the evening or on weekends because they had an actual job.

They also, they, I mean, they did know what they were doing because when they were threatened with legal letters because they had emails, but the emails were obviously to this fake website. So if they weren't there really, and I was like, but they had real addresses. Um, and when you Google map their addresses, it's just some random address in that was really in the sticks of, in the, in the country of Melbourne, like, uh, in the countryside of Melbourne, outside of Melbourne. So, uh, they did know what they were doing because when the legal letters were actually sent through to them, they got really cocky. They got aggressive, they got, they turn into absolute . Their true nature was totally revealed. And they were just basically like, you, if you keep reporting us and you block out accounts, then we can't get your money back, which is obviously because of course, then we're not going to send money back.

Um, but you know, at that point, they're preying on whatever hope is left in, in anyone. And obviously Sarah had at this point may and the real companies, legal firm and the head of the real company, um, to kind of help her out that knows the industry in and out as well. So to kind of say to her, look now, what is the truth? Now, if you go to ASIC's website, which is the Australian securities and investment commissions website, what you will find is pretty much the first sentence that they say on the website. If you have been involved in a scan, the likelihood that you will get anything back or refund back, anything back is printed. She much zero. So yeah, the website says that I really want to like, let that sink in for a minute, which is horrible. I know it's horrible, but it's actually truth.

Okay. Um, so at this point, yeah. Like, I mean the hope is gone. Yeah. Like these fake people to this fake company offshore to these bank accounts, the banks can't get involved because what do they say? We can't reveal personal information about someone else's account. Like if you're not the account holder, so then it just becomes this like chicken and egg chasing your tail when, and what do you do now because contacts and, uh, just knowing people in the industry, what you, and is she got in touch. Sarah got in touch with a financial fraud investigator, essentially, who knows kind of the ins and outs of who's who, um, pretty well, even this guy's an absolute Dick, but, um, uh, that's a whole other story I'm not going to go into. But, uh, anyway, it turns out that he knew about this very same scam that was happening and the bank had already been flooded, uh, in, I think it was maybe like February of this year.

So one of the banks that he knew money was going through, um, with the same like Philippines company that had these other shell companies, um, he'd already alerted the bank. Now, when that, something like that happens, then the bank is then responsible because they've been alerted of something that is very real and true. And if they don't do anything about it, then they are actually liable. If something like that doesn't happen. And there is a scam in existence and they're buying stored noise. Then the banks will just say, well, we didn't know that the money was coming through and being siphoned through us. It's not, it's our responsibility that you sent money to someone that you didn't know that you didn't do your due diligence on. You know, it's not our responsibility to give you that money back. Like, we've the, money's not with us anymore.

So, but because just divine, thank God this happened. Um, I think it was back in maybe February, they were alerted, which it was just lucky that Sarah found out this information, otherwise she would never have known that, that the banks did or this one bank did know. Um, since then, and this guys, this has literally been months, this happened a week ago or two weeks, weeks ago. Um, Sarah found out that she is actually getting a thousand dollars back from one of the banks only because they knew about this, this specific scam. And they didn't do anything about it. Um, otherwise if that didn't happen, then it would have been zero. It was, it was a hundred, it was completely, it was zero. You're not getting anything back, basically. Um, asset can't do anything. Frederick police can't do anything. Financial investigator can't do anything. You can't go off to these individual people like you, you get nothing back.

It's gone dead in the water. So only because that happened, um, she got $80,000 back in her friend got her full amount back because they invested that amount of money after the date in which the banks knew about the scam, the, the other $40,000 that was invested in the Airbnb IPO. She doesn't get that back. So that's gone, she's lost it. Um, so this is, this is that and convoluted and detailed and scammy, and just the lengths that literally the lengths that people go to to create these fake funds and how very real it is and possible is that this can actually happen as well. And I know what I don't want to happen is for you to now feel like, Oh my God, I can't trust anyone. That is not my intention telling you this story genuinely. My intention is just to give you more knowledge, just to educate you more.

So, you know, you know, what is out there, what is possible, what does happen? What is real, and hopefully to inspire you to get the knowledge, to get the confidence, to get the inside of him first, so that you have everything that you need to invest either yourself or be confident in who you're investing with. If you want someone else to manage your money for you. Now, I know there was a lot and I don't want to like freak you out, but I would not be doing my job if I didn't tell you exactly like what does happen in this world. And unfortunately it does. And unfortunately it exists. It's means that you can do something about it. And if anything, it means that it's even more reason for you to handle and control and really just have the power over your investment portfolio, your financial future, your financial freedom, and know really like the ins and outs of how it works and it's, and that it's not complicated.

It's genuinely not complicated when you do manage everything and have everything yourself. Uh, it, it, it's so easy. It's so easy once, once, you know, you're like, how did I, how, why was I so scared of this? Why, why was I scared? So scared of just not starting? Why was I stopping myself? And I know all the reasons because you've been conditioned. You think that it's, it's hard because you've been told that it's hard from the industry that has complex and confusing jargon. And Oh, can I just tell you, but everyone that comes through investing bootcamp is one thing at the end, genuinely what they say is like, Holy crap, I didn't actually realize it could be this easy. Like, is this all I have to do now? Yes. Yes. And that's always a lesson. Money gets to be easy. It gets to be easy.

You get to choose it. Ah, so I really have no idea if I've missed out, missed out details of this story, because I've actually recorded this podcast over like two different weeks, because it's such a long episode. Um, and I got halfway through and then I was, I had to go and do something else and I've just come back to it. So if I missed out details, I would be more than happy to tell you, but I hopefully I've told this story in re we collecting it in the, in the most succinct way possible. Um, and I just want you to know that it's totally safe. It's okay. You are totally safe in investing and scams exist out there. And it's just a great lesson to us, you know, to create awareness around, you know, what do I want to be informed about? What, what knowledge do I want to hear?

Hmm. Okay. A big one. I'm going to leave it there. I hope you have loved this episode. And I hope you have had loved this story, just hearing it of like the ups and the downs and like the journey that happened. Um, and I will see you in another episode. All right. Thank you so much for tuning in today. Rave. If you have loved this episode, be sure to drop a review on iTunes and make sure you screenshot it and send it through to me so I can keep sending you and keep giving you more podcasts and keep sharing the love. Also, if you haven't connected with me yet on social media, make sure you follow me on Instagram at ms. Wealthy, official, even more content. I love connecting with my babes there. Otherwise I will see you next week on another app.