By Peter Macfarlane for The
Q Wealth Report
"Return of your money is more important than return on your money."
That is the first thing I tell my readers and clients who are seeking
financial freedom, or are thinking about investing offshore or
internationally for the first time. Many of these people may have gone
offshore to begin with for asset protection purposes (to protect against
lifechanging events like divorce or bankruptcy) or to reduce taxes… but
once they see the opportunities out there they are attracted by the high
But even for the seasoned investor or financial professional, it's not
easy to tell the difference between genuine high return speculative
opportunities, and the sharks out there. And it's not just about scams,
either. With the way things are in the world today, even investment
managers with the best intentions can end up losing you big bucks, as we
have seen on Wall Street and beyond!
Let me say first of all that there are legitimate, genuine opportunities
to build wealth and make money offshore. Big investors do it all the time
- the forex markets and hedge funds are typical examples. As soon as you
factor out the tax man's share, you can immediately get ahead financially.
The profits compound as time passes. Lighter regulation typically means
lower costs, and these savings can be passed on in turn to the investors.
Many of the most stable financial institutions in the world offer their
best investments only to offshore clients such as sophisticated or
So, unlike some other business writers, my view of offshore investments
is generally positive. Globalization has opened up not just a wide range
of new investments, but also the opportunity for investors to seek out
more information on investments they are being offered, and the people
behind them. This in a perfect scenario allows a free open market
transaction with due diligence conducted and all the facts known to the
More and more people around the world are achieving impressively high
returns on offshore investments of all types. But of course, you don't
normally hear about them, because they are quietly watching their money
grow. One of the reasons they typically went offshore in the first place
was to stop other people finding out about their assets, right? We call
this phenomenon "stealth wealth." So far, so good.
But there is a dark side to offshore investing too. I've been in the
international finance area for more than fifteen years and have seen
everything. I've talked to people who have been victims of share and bond
pushers, boiler room operations, fraudulent offshore investment salesmen
who don't even have title to the land or real estate they are selling,
internet hyipers, unregulated Cayman Island hedge funds and just simple
confidence tricksters or conmen who lie through their teeth. The latter
spend their days dreaming up impressive-sounding but meaningless
terminology like living, pure or commonlaw trusts, prime bank guarantees,
standby letters of credit, underwiter liabilities or bank debenture
programs. If you hear these words bandied around, beware! Most likely
what you are really dealing with is a simple ponzi scheme where money
flowing in and the top is used to pay out returns to investors at the
bottom - until the whole scheme blows up.
Before I go on, and because we are talking about checking the source of
information, maybe I should tell you a word or two about who I am. Why am
I qualified to write about this subject?
My name is Peter Macfarlane. I'm 38 years old. I grew up in the South of
England, studied in London for a while, then straight afterwards I left
the UK. Since then I've lived and done business in at least ten different
countries including Panama, Switzerland, Hungary and the Bahamas. Without
exception, all of this business has been what you could term "offshore."
And for much of that time I've been writing articles on offshore
investments and banking for The Q Wealth Report. You can verify this by
just doing a Google search on my name, and you'll see articles I have
written for various sites over a long period of time.
I'm a very discreet and private person - something you need to look for
in a due diligence expert. That's why I don't put my photo here, for
example. It's not that I'm ugly! (Diehard computer geeks might, however,
catch a glimpse of my lifestyle by
reading my tweets.)
So please feel free to continue reading. I would genuinely be delighted
if after reading this article you would send me an email to let me know
what you think of it, to ask questions, and to expand on these ideas. My
email address is at the bottom of the page. If you don't like my ideas,
you will have lost ten minutes. If you do, who knows what you stand to
gain? Or what losses I can save you.
Got your cup of coffee? Then sit down, relax and open your mind…
How Scammers Play with Reality
Scammers typically play on world events like the real estate crisis,
turmoil in financial markets, or the increases in commodity and oil
prices which are bringing on line a whole new range of inventive scams
related to gold or silver mining, oil exploration in hitherto unknown
parts, and the like. Financial scams, meanwhile, frequently play on an
impliedconnection with Switzerland, due to its sterling reputation and
its being known for secrecy.
There are dishonest people everywhere - but these undesirable types
thrive in the culture of secrecy which surrounds the offshore world,
knowing that their crimes will most likely go unreported… especially if
they are successful in stealing untaxed or 'black' money that investors
have squirreled away outside their home countries.
Sadly, I've talked to many people whose lives have been destroyed by
investment scammers. People who have mortgaged their homes to the hilt
and been left with nothing after the scammer ran off with their money.
People who could no longer bear the feeling of guilt after they
introduced friends and family members to schemes which went belly-up. The
losses and damage caused in these cases often go far beyond just money.
So how do you tell a scam or HYIP ("High yield investment program") from
a real, genuine offshore investment opportunity? Here's the answer!
Peter Macfarlane's Offshore Due Diligence Checklist
Offshore investing is not such a minefield as it sounds - if you have a
decent guide or roadmap. Really there are a few simple ground rules to
avoid being scammed, and if you follow these guidelines you will almost
eliminate the risk of losing your cash. Here are those rules, in my
simple five-step due diligence checklist:
Follow your instincts
Invest smart - use your instinct. We've been conditioned by society to
surpress our instincts. This is wrong. If it doesn't feel 100% right,
don't do it. If you have the slightest doubt, write it off. Try to meet
the investment promoter in person, or at least talk on the phone. Ask
pertinent questions. Doesn't matter (in fact it's better) if you already
know the correct answers to the questions they are asking - you want to
judge how they respond, not just what they say.
Another great deal will be just around the corner and you will save
yourself a lot of stress. If this rule sounds simplistic it is - but
sometimes the simple strategies are the best. Instinctive investing works.
If it sounds too good to be true…
If it sounds too good to be true, in 99.9% of cases it is too good to be
true. There's not much more I can say about this - it's just another
simple rule on the offshore due diligence checklist.
For example: if the return you are being offered by an investment manager
is much higher than the typical average, you know something must be amiss.
Think seriously: if a bank is supposedly trading millions "off balance
sheet," then why would they need your measly $10,000 or $100,000?
Don't be pressured
Scammers often want you to act fast, because they know that if you go
away and think about their proposition, or talk to other people about it,
you'll most likely change your mind. If they want your money right away,
or if the opportunity is just closing tonight, walk away.
Beware of Secrecy and Illegal Activity
Sometimes, an investment 'opportunity' just has a scammy feel to it. For
example, you are offered the chance to participate in a money laundering
transaction. That is the basis of the typical Nigerian email scam (also
known as 419 fraud) for example. An amazing number of people fall for
this scam every year. Don't you become on of those victims!
Likewise, if you are asked to invest in something but keep it secret - or
even more freaky, if you are asked to invest in something but that
something is too secret for you to be told about - run, don't walk, away!
Run it by a Due Diligence expert
One of the services we have offered here at Q Wealth ever since day one,
is that subscribers can email or fax over copies of investment proposals
they have received, and we will give an informal expert opinion on the
spot. Most scams we can spot immediately. Over the years, we have seen
literally thousands of rip-offs. This is just one of the services
available absolutely free to our subscribers.
Subscriptions cost under a
hundred bucks, but we can say with certainty that we have saved readers
millions of dollars over the years by warning them away from scams. It's
not so much a matter of whether you can afford to subscribe - it's a
matter of whether you can afford not to!
For the very, very few cases that we can't immediately decide on, we can
refer you through to discreet due diligence specialists who are Swiss
licensed private investigators and can carry out more in-depth risk
management analysis on companies, businesses and individuals worldwide.
We have several such people on our panel of Q Experts. This could help
you to determine the true facts -not just what the promoter wants you
What if the worst has already happened?
What if you are reading this article because you didn't do your 'due
diligence?' You are coming to terms with the realisation that you have
been defrauded? Unfortunately, the prospects are not good. But, time is
of the essence and if you act quickly sometimes you can get all or part
of your investment back. There are legal tools at your disposal, such as
emergency injunctions to block scammers' bank accounts. This is not
something your local lawyer will know much about, but our network of
contacts can sometimes assist. Knowing the right people to call, rather
than having to spend days or weeks searching them out, can make the
difference between success and failure. We do have experience of this
Then, there are the non-legal means. I don't mean illegal, because I
would never recommend clients to break the law, or to do anything
unethical like sending in the mob. But sometimes a consultant who is
experienced in such matters can find one or more of psychological or
logistical weak points in the scammer's armory. This is sometimes done by
the technique known as "social engineering". Because he wants to sleep
easy at night, sometimes a scammer will choose to admit defeat and pay
off one or two investors who can show they know how to play the scammer's
own game. We can also refer our members to people who can help in such
cases. Please feel free to contact us
Further research: This article is provided as a free service to the
public, with the intention of introducing you to the wide range of
services offered by membership of The Q Wealth Report. You are invited to
join our community of intelligent investors. If you have any feedback
about this article, please contact the author, Peter Macfarlane,
directly: firstname.lastname@example.org Peter is joint editor and a founding