PPP offering: REAL OR NO?

Stock and Bond Fraud, including Boiler Rooms / Pump and Dump Schemes, Mutual Fund & Hedge Fund Fraud, FOREX scams, plus Churning, Private Placements, Venture and Bridge Funding, IPOs, Viaticals Fraud, HYIP and Prime Bank scams, MTNs, Historical Notes, Recovery Schemes, etc. Includes the Jim Norman Project and the Michael Dotson Project and similar HYIP scams.

PPP offering: REAL OR NO?

Post by wondering99 » Thu Feb 19, 2009 6:39 pm

I am going to post (in separate posts) descriptions of Private placement programs (Trade Platforms) offering the land of milk and honey. Tell me what you think and how they could get your money...this one is the easiest to see...on most of the others though they do NOT require you to give your money to anyone...you keep your money in your own bank account at all times....anyway here is the 1st...


[CONFIDENTIAL - For description purposes only – Not an offer]

1) Investor submits an Investor Information Sheet (CIS), Passport or State ID (Driver License) and Proof of Funds (current bank statement, no acct #), and Corporate Resolution (if investing entity is a corporation).

2) Reservation Form issued to the Investor upon company approval (within days). AAA rated securities backing the Investor's desired level of funding are set aside into a sub-account at the bank where housed (JP Morgan Chase, NYC). The ISIN and CUSIP #s for the AAA securities backing the FINANCIAL GUARANTEE are provided to the Investor on the Reservation Form. Note that the AAA securities back the Investor's funds 100% for principal. FINANCIAL GUARANTEE is issued for 10x amount of Investor deposit; i.e. $100K deposit buys $1M FINANCIAL GUARANTEE, $10M buys $100M FINANCIAL GUARANTEE, etc (MINIMUM INVESTMENT: $100K up to ~$50M)

3) Investor is offered a contract defining the FINANCIAL GUARANTEE program, reviews it with a principal of the company and upon mutual approval, executes the contract and deposits the agreed upon funds into a joint signatory account with the principal at JP Morgan Chase, NYC, where the AAA securities are held. The contract is lodged with the bank.

The Investor is named as a joint signatory with PFS and beneficiary of the account where the AAA securities are on deposit. The contract again identifies the AAA securities by their ISIN #s and CUSIP #s, as listed on the reservation form and segregated for the Investor's transaction.

4) Investor approves purchase of the Financial Guarantee (backed by the AAA securities).

5) The Financial Guarantee is issued to the Investor for 10X the amount of the original deposit; i.e. Assume $100K deposit X10 = $1M FINANCIAL GUARANTEE

The contract names the Investor as beneficiary of the account where the AAA securities are deposited, the Investor is added to the account statement and the Investor, to the extent of his/her investment, has the right to ownership of those AAA securities should the program not perform as per the contract

6) A loan for 50% - 90% of the amount of the FINANCIAL GUARANTEE is made to the Investor (7-10 day time frame) from a lender using the FINANCIAL GUARANTEE as collateral; i.e. $1M, assuming 80% LTV loan = $800K. Investor may choose to take back the original $100K deposit so that the net equity on deposit would now be $700K.

7) The loan proceeds are used to repeat the process. The goal is for the Investor to exceed $500M ASAP so assume the Investor keeps all the rest of the money in the program. (The Investor may choose to take an agreed-on amount of the loan and put that cash in their pocket.) Round two: The $700K X 10 = $7M FINANCIAL GUARANTEE and at 80% LTV loan yields $5.6M. The 1st loan of $1M would be paid off, leaving a balance of $4.6M equity in the account.

8) Investor may now take all of part of the $4.6M and purchase another FINANCIAL GUARANTEE. Round three: Assume all $4.6M X10 = $46M FINANCIAL GUARANTEE X 80% LTV loan = $36.8M less the previous loan of $5.6M = $31.2M. Round four: $31.2M X10 = $312M X 80% LTV loan = $249.6M less the previous loan of $36.8M = $212.8M. Round five: $212.8M X10 = $2.128B. Process stops here since the figure is over $500M.

9) Investor is now eligible to enter a private program with a special Trader who will offer the Investor various options depending on what programs are available at the time. The Investor determines which Pay Out option is best and the Trader issues an addendum to Investor's contract to stipulate what the projected payout will be.
(ANOTHER SCENARIO FOR ILLUSTRATION PURPOSES ONLY: Assume 70% LTV: Investor invests $100K. From proceeds of first loan ($700K) Investor recoups his $100K and invests remaining $600K in second round. Investor is now working on "house money". He repeats the process and, by the fifth round, Investor holds $1.1B in Treasuries which Trader could offer to Buy Out @ 3X1 after so many days or enter Investor in a 40-week program at X % per week)



Re: PPP offering: REAL OR NO?

Post by wondering99 » Thu Feb 19, 2009 8:21 pm

I love these replies keep'em coming.