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High yield investment programs or HYIP scams are a type of securities fraud where investors are promised very high rates of returns for fraudulent investment programs. With HYIP, the fraudsters have no intention of ever paying back their victims. Just like Ponzi schemes (which are closely related to HYIP), victims of this fraud are often left holding worthless pieces of paper having lost their life savings. If you have been the victim of a HYIP scam, talk to Weltz Law. We are the leading securities litigation law firm and we have helped many Americans recover funds that they have lost through HYIP scams.
High Yield Investment Program Scams
HYIP scams closely resemble Ponzi schemes and they involve fraudsters offering very attractive investment returns that are often based on fictitious securities. Here, money from new investors is used to pay off old investors and there is little to no trading or genuine investment activity by the investors. Eventually, as new member enrollment tapers off, the money to pay old investors reduces, and the whole model comes crashing down. Investors that then left without their money and with limited options on how to recover it.
Proving High Yield Investment Program Scams
When it comes to HYIP scams, there are many ways in which investors can prove that they are victims of fraud. The most obvious is when the company offering the HYIP is unable to pay back investors. Even though most of these schemes will pay off some investors at the beginning in order to build legitimacy, eventually, most investors end up losing their money. Even those who are paid at the beginning are often encouraged to re-invest so as to increase their earnings.
Another telltale sign of a HYIP scam is when the firm is very opaque about its investment activities. Investors are often told that they are part of an exclusive group and encouraged to stay silent about the HYIP.
Recovering Damages from High Yield Investment Program Scams
When it comes to recovering funds lost through a HYIP scam, it often proves very difficult to do so without help from experienced securities lawyers. Fraudsters who perpetrate HYIP scams are very good at hiding their proceeds and often, it takes a determined effort to recover any assets. With a good lawyer at your side, there is a good chance of recovering your money through ensuring legal processes.