Canadian securities regulator issues Pay Diamond Ponzi warning
Following reports of local recruitment activity, on April 12th Canada’s Manitoba Securities Commission issued a Ponzi warning for Pay Diamond.
BehindMLM reviewed Pay Diamond last month and concluded the 5% weekly ROI was likely being generated via Ponzi fraud.
Upon review of Pay Diamond’s business model, The Manitoba Securities Commissions has drawn the same conclusion.
The Manitoba Securities Commission (MSC) and the Winkler Police Service are issuing a joint warning to Manitobans about PayDiamond.
Evidence indicates the company may be operating a so-called Pyramid scheme, which has cropped up in Manitoba.
In a Pyramid or Ponzi scheme, investors are promised high returns. They operate by paying interest to investors with money brought in by new investors.
“There is a heavy emphasis on recruiting new investors,” says Len Terlinski, MSC investigator, “An ‘affiliate’ is paid based on the amount invested by people he or she recruits. This is a red flag.
Additionally, the ‘affiliate memberships’ maybe be considered a trade in a security, and PayDiamond is not registered to sell securities in Manitoba.”
Authorities are tracking one Winkler resident who has recruited at least five family and friend into the scheme.
This individual has convinced friends and family to invest in PayDiamond, and has profited through recruitment fees. This is a classic Pyramid/Ponzi scheme model.
Whether any further action will be taken against the affiliate is unclear.