Genneva Gold Scam Explained!!

GennevaOn the 1st of October 2012, Genneva Gold raided by both the authorities in Malaysia and Singapore for suspected offences including illegal deposit taking, money laundering, tax evasion and avoidance, false description (misrepresentations), appointment of agents without licence, and failing to lodge statutory documents.

Soon after, there are a lot of comments and denial by Genneva Gold customers & consultants (agents), and they start to blame the authorities. They are even set up Genneva Support Group on Facebook. In the group, there was a comment made by Richard Chew who clearly explained the scam and the flaw on Genneva business. Unfortunately, the comment was deleted within a few minutes.

I like to share his comment so that everyone understands the reason why Genneve Gold is indeed a scam. Read on his comments below,

“I can understand all the frustration that is being aired here. And it appears Genneva has been deliverying what they promised but forced to freeze their activities. .

However let me explain my view on the technical flaw in this scheme that warrants BNM to take such drastic action. My intention of giving my view is to help enlightened and hopefully will help many here to ask the right questions and direct it to the right party.

In any trading; there must be willing buyer & seller for a transaction to take place at a price agreeable by both parties. The seller will profit from the transaction and the buyer will receive the goods / service. Very clear cut exchange.

However in this scheme, technically the seller do not ‘realized’ its profit yet from the transaction because there is a contractual obligation that a monthly ‘gift’ of 2-3% is given to the buyer and the buyer has the option to sell back the gold at the original purchased price. In this aspect, the seller’s obligations to the buyer becomes a Liability to the seller. To put it in another words, it is the buyer that will receive the profits rather than the seller in this transaction scheme.

Therefore technically this transaction scheme cannot be deemed as trading because the seller doesn’t profit from the goods sold. If it is not trading then where does this lead to?

My next statement may sound absurd and may anger many of you here but please bear with me. My intention is to explain so we can have better judgement & help us understand why Bank Negara has to step in and take drastic measure.

I am saying this scheme is not trading because it is more inclined to money lending business which must be regulated under our Malaysia law. Yes, I just said it; this Genneva scheme is basically a money lending scheme misrepresented as gold trading scheme.

How can this be? You may say there is a sales purchase agreement and gold transacted then how can this be money lending? If its money lending scheme then who is lending to who?

In this scheme, you are the lender. Genneva is the borrower. You bear the financial risk, in return Genneva pays you the monthly interest as we know it as Hibah. At the end of the loan contract, Genneva returns the money to you. During the contract, you keep the gold bar as your collateral if in the event Genneva fails to pay; you don’t loose the full amount lent to Genneva.

If the deal is purely buy & sell with no contractual obligation; then it is clear curlt trading because seller profits and buyer keep the goods. But if there is a contractual obligations for monthly interest & buy back then it is surely money lending, the gold serves as the collateral; the lender profits and the borrower bears the liability.

This issuance of collateral gold is somewhat similar to companies issuing bonds to raise fund from the public. Bonds are meticulously regulated by Securities Commission & Bank Negara because it has to be secured against the company assets such as properties and etc.

The problem with Genneva is that they are not regulated and when they have more buyers (lenders) they are actually increasing the liabilities of the company while profit is not realized yet.

For a typical trading company, the more customers; the more goods trade out, the more profits realized. Clear cut profit realization. For example RM 1 billion of gold sold would generate certain amount of profit based on the profit margin.

However Genneva’s scheme, the more gold sold the more liability it creates for the company because of the obligations to buy back and pay the monthly gift. Therefore Bank Negara had to step in to ensure things are in order and to prevent it to get out of control. A small complaint would suffice to fuel the urgency for drastic action.

It is harsh but neccesary.”

89 comments… add one
  • Very good explanation.

  • Thanks for the analysis. Good illustration using the lender-collateral analogy.

  • Here is an interesting video explaining ponzi scheme:

  • great explanation on the scheme .
    I am still puzzle as to how Genneva generate such huge profit for pay for the monthly “interest” payment ….appreciate you view on this


    • YH, that money come from the 20% premium on top of gold price that new investor pay. This is what we call ponzi scheme. See youtube video on the comment by Daniel Foo above.

      • ponzi scheme is a ponzi scheme ….Gold bar in your hand is not a ponzi scheme. When the value of Gold goes up you generate income, if not you wait for it to go up and Gold has never fail so far ! Point me some place where I could buy gold for cheap – anyone ? 2% or not

        • Let me guess, you must be one of Genneva Gold agent or employees. Stop dreaming & lets face the reality.

          • You guess wrong ! I am here because I am wondering what is the Bank Negara up to after they themselves got screwed up in forex and lost billions. Now they think they are smarter that Genneva just like some folk or this 1-million-dollar-blog.
            Your lender and borrower theory sucks and that is what the BNM people are thinking. You will probably fail in forex too !
            Sorry about that.
            Just because we do not know how they make money does not meant they are in ponzi scheme.
            Gold for the last 10 year had shot up 500% and to give you 24 % a year is what ?

          • Michael, you still fail to see where Genneva get the money to pay 2-3% monthly gift, don’t you. It is not from gold appreciation nor profit from the business. It simply from the 20+% premium that investor or new investor pay. And you also fail to read that this theory was not written by me. Open up your mind.

            Even if Genneva pays monthly gift from gold appreciation. Genneva don’t start 10 years ago but only 1-2 years ago. During this period, gold price appreciate < 40%, means that <20% per year. Is that enough for the scheme to sustain?

          • 1-million-dollar-blog ….do you know when you purchase Gold from the bank, they don’t sent you the Gold which is why it is cheaper. But when you buy physical gold, someone got to mold it, sent it, pay insurance for it and so on, .. so where did your 20% mark up came from ???
            The bottom line is the bank uses your money or deposits and Genneva uses their own fund !!!
            How they do it …. I don’t know but who cares but they don’t necessary have to wait for the gold to appreciate. They may have made some money up the highlands gambling at the slot machine ! who knows ….. Maybe they are doing money laundering. Even Hongkong bank admits that but do they froze their account ? NO!
            you see …BNM has no rights to take their customer’s gold ! They should actually be making sure Genneva gave their customer their gold and regulate the gold price

          • Come on Michael, why 20% margin? Other gold trader just take 6% only. Some bank also allow depositor to take gold bar & the margin not that high.

            Why you & all other victims don’t want to know how do they manage to pay monthly gift? This is when all of them get cheated.

            The raid not only in Malaysia, Genneva Singapore also raided. BNM only freeze the assets temporarily, at the end of the day they will distribute what left to the eligible investor. Don’t worry!!

        • michael

          you can buy cheap gold at the bank or gold retailers or see it appreciates instead of mark-up 25% premium with genneva and take risk wondering if will get the 2% hiba and also wondering if genneva is going to buy back your gold at the price you bought as per the SnP. . by cheap i meant cheaper than what genneva sold you la….

          • Show me a bank in Malaysia that would sell 25% cheaper than genneva. Sure there are cheaper Gold price. It get cheaper when the gold bar get bigger. If Genneva is selling over price gold bullion, you think you are the only one smart enough to know about it ?

          • Omg Michael. Genneva gold is already 20% higher than market price (ALL the banks and gold sellers like poh kong). What is the price for 1kg genneva gold? Let me know and I will do the calculation for you.

            In fact, it is 40% higher than the spot price.

            If you buy gold from Genneva, right from the beginning you’re making a loss for buying overpriced items. Got it? If you hold the gold bar in your hand, consider yourself lucky as you didn’t lose all your money.

        • If the gold bar is already in your hand…then why need to protest and do all that stuff?
          It is like you buy a proton car, got the proton car, then government closed down proton..and you come screaming…

      • People like to think that they knew everything but actually they don’t. This is totally bull-shit analysis of lender-collateral analogy. It is like comparing an apple to pineapple. In all business, we buy and get the thing we buy. The seller use the money to buy more thing. It is common sense. Same thing when we buy house. The developer use our money to build more house in the future. Bank Negara never report that Genneva becoming/using lender-collateral analogy in their business. Genneva will gladly apply for finance license from BNM if they want to operate their business that way. No sweat, just simply apply the license. Only stupid people will assume that Genneva is a ponzi scheme. Because they don’t know the meaning of Ponzi. What about China? are they too stupid for allowing Genneva to operate in their big city? or is it you the one?

        • Let me guess, you must be connected to Genneva Gold like Michael. My advice to you, stop cheating people.

        • Common man! I believe you must have been one of the buyer in this scheme. Now all things fall apart. I understand your frustration. Ponzi scheme or not, it is truly a non trusted bussiness. It is the same as currently other scheme like VGMC, RGFX, last time cacing scheme, ikan, worldshoppers, etc2…Why people still being cheated?. I understand some of them know that this bis kind of vague. But what the heck. Untung besarrr…so kenala hahahah

        • It is a ponzi. You are blinded by greed. But if you have the gold bars with you, then you should not be angry. I believed you asked Genneva to keep the gold in their safe. Who knows, Genneva could have sold you gold bars to new investors. Now, you angry.

      • LOL”DON’T WORRY”1-million-dollar-blog, so you are actually from BNM ! Don’t bullshit about the 20% or 6%. markup. We are talking about buying physical Gold bullion not investing into your paper Gold from the bank ! Pure buyer and seller… Who is cheating who ?

  • but bank negara shouldn’t get involved in beginning.

    • after the lengthy explanation above about the ‘scam’, you still do not understand the issue.

    • BNM SHOULD get involved, they look after Rakyat welfare. Stop Rakyat from being cheated by Ponzi scheme.

  • Nice explanation. But to call it leading companies or ponzi scheme is laughable and to justify a harsh action by Bank Negara is horse shit and not thinking out of d box. You see Gold value goes up and down. If the gold bar in your hand cost 200/g and gold price hit roof top at 250/g, you don’t sell back at 200/g unless you are a fool. So you see your explanation of Gold as the collateral miss the point simply because Gold value is not fixed. You take risk like any stock exchange. You pay a mark up price for the gold like a commission to the agents at the stock exchange. Perhaps you should ask BN to classify the stock exchange as money lending business where nothing happened but just an agreement or perhaps you could ask BN to think out of the box….

    • Actually I don’t really understand your argument…
      If u said gold value goes up and down. Y don’t u go buy gold at a market price or slight cheaper than the market rate at a normal jewelry store like DeGem and wait for gold price to increase?
      U rather pay 20% premium and earn the 2-3% monthly gift and sell it back to Genneva upon maturity. If they actually buy it back from you la….but according to their official webpage under the FAQ it said there is no a buy back guarantee but rather Genneva have a discretion to buy back at a mutually agreed price NOT the original purchase price.

      So where does that leave u? Overprice gold bar waiting to earn from the increase of gold value? Or selling this scheme to anyone or everyone u can find and earn frm the commission which they will be providing until the ponzi scheme go kaboom? Just a simple case of when…

      • “….but according to their official webpage under the FAQ it said there is no a buy back guarantee but rather Genneva have a discretion to buy back at a mutually agreed price NOT the original purchase price.”

        Meaning this blog writer is spinning and lying! LOL! Try to present opinion as fact, didn’t you? Caught with pants down!

        • Now, who’s pants is down? I think it is the people who trust their money to the scammer. 🙂

  • 1-million-dollar-blog advice to Azmi is so true! Most people are simple selfish (and greedy), they don’t care about other people, in fact, they may secretly wish more fools will join the scheme, they only care whether they can make profit. Great Advice – STOP CHEATING PEOPLE.

  • Guys , everyone will have its point of view cos for now those that in the scheme will felt BNM is doing them wrong and BN our government for the day is the one doing all this. Those on the other side of the fence will surely think why all this people are so naive to believe in this unregulated system.

    Anyhow we should think clearly and be sensible the investors are not wrong in believing in this system , this is a time we should all come together even if we are not investing in trying to help those got hurt by this incidence , we support them to get back their hard earned money. BNM nor the government is wrong in this case they are merely doing their job in safe keeping the public money. This scheme can hurt alot of people if anything goes wrong , gold can keep rising but it could also tank . What if it tank , who guarantees your money ? can Genneva promised in the event of price drop we pay for the difference ?

    hence thats why we need it to be regulated not matter what. else we could simply do anything we like.

    Lastly , i would rather trade in GOLD shares on the regulated world market by myself . All in my control , i make or lose its my own problem. Never ever jump in on investment deals or products that we dont fully understand. JUST my 2 cents worth…

  • UPDATE – From thestar

    Investigations into the accounts of the recently-raided gold trading firms reveals that the amount of assets and monies held by these companies do not match the amount collected from their investors.

    The schemes offered by the firms were, therefore, unsustainable, said Bank Negara, the Attorney General’s Chambers and the police in a joint press release on Wednesday to give an update on the matter.

    “Based on surveillance and examination conducted on these companies, it has been discovered that these companies are operating schemes that are believed to be not sustainable to provide the promised high monthly returns, nor would they be able to provide the buy back guarantee of gold.

    “Such schemes are not sustainable because the returns promised are not funded through gold trading, but from the monies invested into such schemes.

    “Prior to the joint raids, it has been noticed that these companies had delayed returning gold or money to the investors within the promised stipulated time.

    “Such signs are early warning indications prior to the collapse of such schemes that would result in significant losses to investors.

    “These raids were conducted in the interest of protecting the investors as well as the public at large from falling victim to illegal schemes,” the statement said.

  • I wish this scam can be called a spade a spade, a ponzi a ponzi. However today our society has become more sophisticated and more advanced, therefore a scam can appear legitimate but not necessarily viable. Otherwise how can they lure people into this scheme if it is not convincing enough? High returns & comply to the law; how wrong can that be? Surely this raid is resultant of conspiracy from higher authorities to bring this business down because of competition? Or is it possible that it is a scam?

    The safest way is that we do our due diligence before investing or engaging into any scheme. You can take responsibility of your own decision. Don’t let others influence you.

    The following are some suggestions, if these questions are not answered with clarity, then better not venture into this scheme.

    1) How to know it is Ponzi?
    In this scheme, there is no way you can tell it is ponzi from the outset UNLESS you scrutinize into their accounts.
    Some other questions to ponder – how do the company generate profits? How does the company create wealth from the buying & selling? We know gold’s value doesn’t diminish; it is quite stable & reliable commodity. But in this scheme the physical gold is at the hands of the buyer; therefore the company holds the ‘paper gold’ so to speak. The next question is if Genneva has your cash so how can the company create wealth from your cash? It has been reported that estimate of RM4 billion traded, so if you reflect the balance sheet of the company, the company would have created RM 4 billion liabilities, supposed to capped to RM 4 billion of assets whether in liquid cash or in gold. On top of that it has to cover monthly 2% gift which is added liabilities to the balance sheet.

    In order to confirm it is Ponzi scheme, the company’s accounts has to be audited to confirm the balance sheet. BNM raided Genneva on the grounds of tax evasion & avoidance and failure to submit statutory documents; suggest to me that the company has not been transparent with their accounts.

    When any of us ask to reveal their books, they may say that it is due to company’s trade secret or they may say that it is their right not to reveal because they are not public company; which is a reasonable reason. But that doesn’t mean we can jump into their scheme. Be patience; try other ways to conduct your due diligence.

    You see Ponzi scheme cannot show real profits to investors. Successful Ponzi will hitch on ‘make believe’ profits such as customer testimomies, impressive office, grand opening ceremony, anything that can convince you that they are making legit money other than revealing their actual books. They will use external fasad to show that the business is profitable; but when it comes to the books; they will give excuses why it cannot be revealed.

    You need to be prudent and wise not to fall into this trick.

    So back to the original question, how to know it is Ponzi scheme if you can’t access their books? Ask them how they make the profit, make them illustrate in a diagram. Make them explain how they create wealth from the buying & selling concept. If its profit sharing which is you & Genneva share profit; ask them who will be the client. Typical trading – seller profits, buyer keep the goods. If you and Genneva is profit sharing; somebody have to be a client. If that client is also enjoying the same benefts as you then it is Ponzi.

    If the client is external; in other words not part of Genneva’s client base, then how is wealth created? How does it create more wealth with your participation for joint profit sharing?

    Profit is derived from the value you create for the client, if the company says that it derives profit from trading gold by buying low & selling high, then what ‘joint profit’ value do you contribute in this scheme? Ask them to present in diagram how you value add because if they can make profit by themselves by trading gold then why would they want to include you for profit share. If they can’t answer you, it is a scam to get your money.

    If they tell you their reason is to share this benefit with you and others, make it clear to them, if they can’t explain why your contribution can make the difference; you walk away. No expert trader will share their profits with you if they can take the full profit for themselves with the same dollar.

    If they can’t convince you, they may tell you the benefits of gold; they will quote reputable people or organisation in gold trading, the weakness in our current financial systems and etc; all of what they present may be true and credible BUT if they can’t provide explanation on the original question how the company create wealth; it is very likely a scam. Walk away!

  • dear 1-million-dollar -blog

    i salute you for your stand on this issue.

    just remind the unbelievers about Bestino – the RM400 m gold investment scheme…please post this story.

    i have seen one gold investment scheme similar to genneva n bestino first hand…how i wish i could put it into their heads that the monies they received monthly 3-4% are the monies that they had invested earlier. See, the companies budgeted of paying out maybe 50% from the amount invested and the balance they will pocket it. Then, at certain point in the future they close shop with tons of cash in hand.

    Try to contact or recover your money. Try running to your MPs, police, BNM.
    Good luck.

    • Dear lin,

      It is a well thought off plan of the corrupted.
      It was allowed to ballooned into a certain size, thereafter Genneva ask BNM to raid the company and freeze asset.

      Later, BNM says all asset are freeze and lost in the thin air. Days after, behind the closed doors Genneva directors and BNM top people start negotiating on how to share the cake.

      Please don’t get sore, it is just a conspiracy theory and fictional assumption for entertainment purpose. Well, it is not going to happen, not in a thousand years. Right?

  • I just buy gold from banking institution under Gold investment account. Just have a passbook and no physical gold. Not much return as compare to Genneva Gold .

    To all Genneva Gold investors, I feel sorry for you all. If the gold bars with you, you can sell to gold shop at a discount, or keep it until the price higher than what you’ve paid so make some profits. You can kiss the- 2%- per- month- for- six- months- with-option- to- re-purchased -after- 6- months schemes-that-you-used-the-money-to pay-children-education-lah-blah-blah-blah good bye.

    If you don’t keep the gold, let this be a lesson; an expensive lesson to some. There is no easy way to make return on investment of 24% per year.

    Even if BNM did not raid and freezed the business of Genneva Gold, it will collapse on its own sooner or later.

    Don’t blame others if you lose money, lots of money.

    • roslaom

      I can’t help but feeling you’re sort of jealous to Genneva’s gold buyers for receiving 2% hibah, and having gold bar in hand. 😀

      For you information, commercial bank may bankrupt too. If it happens, you the customer will only guaranteed with max 25% by the bank’s insurance, and I wish you won’t be so naive to lean on Bank Negara to pay you back the balance 75%.

      And you don’t even have any physical gold for reselling, do you?

      May God bless you.

      • You are comparing Genneva gold to a commercial bank? How shallow is that??!

  • In my opinion do not enter any scheme that guaranteed you the return more than PNB.. If the any parties that can give return more than PNB watchout by PNB. something goes wrong. just my view.

  • dear blogger, nice analogy but to me the program is just a straight forward ponzi scheme veiled under the trading of gold.

    Like roslaom, I bought gold from a bank, namely, KFH. Unlike roslaom i get the option to bring home my gold if I want. (since KFH group owns a gold mint in Turkey, they have a loads of gold in their safe locally). Bought last year and sold mid this year (bad timing) I lost money on it. My point is, like any other INVESTMENT gold comes with risk if you dont have holding power boleh rugi jugak byk sbb sell and buy diff.. But it is a good solid long term investment nonetheless.

    It is impossible for this ayam company to be giving out 2% per month constantly there is no practical answer balik2 cerita historical prices… mcm la director genneva created gold.

    Like my nenek cakap “if it’s too good to be true….. (fill in blank pls michael from genneva)”

    I think parliament should approve ROTAN for ponzi originators. Kesian org kene tipu some out of their life savings. It saddens me.

  • no point to argue, let BNM be the judge, if they free this company after their investigation then it should be ok to invest. Just my observation, and I am looking for the result of investigation

  • kesian tengok michael dan azmi masih di dalam state of denial.
    kena tipu hidup2 pun masih tak tahu.

  • 1-million-dollar-blog
    One thing I don’t understand is, why is the victims so panic. Even if their money is gone, they still hold the physical gold on hand, isn’t it?

    • Tiffa,

      Not all lah… Some are conned into leaving their gold bar with the company for safe keeping with higher interest. Others just find it too heavy to carry around. If you put one bar into each pocket, your pants might just drop, you will accidentally land yourself as a flasher.

      The same kind of “accident” happen to Rose Chan and intended “accident” by Janet Jackson.

  • tiffa, the reason investors are so panic, because many of them do not hold the gold themselves. either they “trust” geNNeva to hold the money for them or the=y have reinvest all the golds and submit them to geNNeva for a new ponzi scheme that is reportedly can pay double at 4% per mth.

    since the gold bars are not with them that is why they are so worried.
    (geNNeva can resold their golds again and again and again as many times as geNNeva wants because in ponzi scheme, this is call the exit point where the crminal (geNNeva bosses) are preparing to ran away.

  • I fully understand the video presentation about ponzi scheme. But, as what I know, the physical gold bar that is sold to buyer at 2% – 3% mthly discount, the cost of the gold is quite low, because the gold bought by Genneva few years already. So, when do buy-sell trading, Genneva actually is already earning the “price gap”. So, very clear cut it is naturally a “comfirm profit” under dealing of “gold buy-sell trading”. So, the Genneva income already generated from the “gold selling transaction”, not generated by the later joined buyers. So, sd not under “Ponzi scheme”. After sold out the gold at mthly discount, the company can use the generated income to roll over or others operation expenses. So, within the 3 mths time, the company can use the income to produce more income. At the same time, gold price with go up naturally, fr time to time. So, this is also a reason that the company earning the “price gap”.

    • Try to do the debit & credit entry, according to what you said and also please include the hibah and also the buy back. After that do a balance sheet and see whether your accounts balance at the end of 3 months.

  • Also, how sure are you that the gold is actual gold and not some metal coated with gold.
    Has anyone assayed the sample? If so, which assayer did the test?
    Where was the gold procured? Who minted or made the gold bars?

    • They think they’re the smart investors, making 24% per annum returns. 2% per month. That’s a fantasy world. I can’t call them investors, because they don’t seem to understand the basics of investment at all. I’ll call them “investors”. They’re gold traders y’all. All these teachers, students, retirees, clerks suddenly they’re 1 rank above the investment bankers even.

      They trade gold in the most innovative way possible that no one else has ever thought of this before. They buy gold >> they get gold >> they get 2% return every month >> then they can sell back the gold at the price they purchased. Wow what is this?? Perfect. How do Genneva do this? If our government can do this, even the Opposition party would vote for the government.

      Why haven’t anyone think of this? Why don’t all banks do this if it’s so good? Why don’t all governments use this method? Why don’t our pension fund EPF use this????

      Because this is bullshit.

      And a bullshit, you can smell from miles away. And you should have stayed away (or at least you should have not stayed that long, be honest)

      I know it must be hard losing money. But it’s your money you should have used your head better.

      Dear “Investors”,

      Stop being in denial, and move on. There’s no investment without risks. This is your risk. It’s a huge one. You should have calculated that earlier.

    • Ben Chiew, comment with grounds bro haha
      its clear that you dont know, nobody tests gold, to actually test and be sure that it is real, u have to drill deep down in the center which OF COURSE renders the gold of no value after drilling

  • This regular bubble popping of gold investments has been occurring for years.

    Now, nobody would want to admit for the fear of being accused as idiot etc, the 1 million dollar (blog) question is, IS GOLD ITSELF A PONZI?

    Now, we can answer this mathematically, however our calculations are not yet completed. But our preliminary calculations confirmed that it is a Ponzi. Whenever we are finished, we will post it at our site.

    Now we said it. So good luck to gold holders everywhere.

    • I love to see the calculations 🙂

      • We have collaborated and completed the calculations!

        We summarized them in a nice presentation movie and will post it into our website in a few days time.

        In summary we sure nail it for good that gold itself is one big Ponzi and we advise all of you to stop buying and hoarding it. Use your hard earned money to generate real value, into things that the world really need, not into a piece of metal.

  • I would like to add its the same issue with the VGMC, now already collapsed, the big boss already gone, with the investors money, and now they even promote the platinum scheme… now, for RGCX, still operating and there is people promoting in malaysia..

    my advice to all, its not easy to become rich, better go for solid business, rather virtual which uncertain…

  • I like Azmi’s very logical reply. The Chinese government could not be that stupid so as to grant Genneva a 30-year license. This Richard Chew must be a moron with a world of his own making …

  • Few things i’d like to point out. I could be wrong… but what the heck…
    1. There’s no such thing as free/easy money in this world.
    2. Money are usually hard earned…
    3. Only greedy/stupid people fall for these schemes.
    4. Not my fault if others fell for it.(but i somehow pity them… WTF are they thinking??)
    5. My advise… keep your money and invest on other legal schemes or business. You can ignore my it… still none of my business. 😛

  • I don’t know what all these investors were thinking.
    Just pure greed.

    If you want gold bar, get it at Poh Kong or Bank Islam.

    If you want paper gold get it from Maybank.

    If you want to be lucky, start digging at your backyard.

    Please do not scam people on your Ponzi scheme.

  • ya when real thing ppl do not believe ppl tend to be lazy nowadays believe easy way to get money invest sit down then have money. this is all about speculation not based on fundamental. in fact today world economy is due to speculations!! the whole economy system have problem. need to refix and replant a new one. anyway i just to share as well. sunshine empire,swiss cash, bestino gold and so on…for me if i m the owner of genneva i will report to authorities for own raid to carry on. but the money had been transffered out of this country and if i m the owner then i will leave in a lavish lifestyle then.

  • Wrong, wrong, wrong. Your writer’s mind is so set on understanding how the Ponzi scheme works, like a text book. If it shows this , if this is how it works, this is the way to analyse the company…bla..bla..bla. If it follows this n that then it’s Ponzi. Ur mind is so dogmatic n just refuse to see/analyse case by case. It’s not one size fits all. You must be able to see how the trading co. (Genneva Malaysia Sdn Bhd) works. Get the working mechanism from GMSB not secondary source ( u will get wrong and distorted picture). Change ur mindset (jargon: paradigm shift) and see how innovative the trading is carried out. Bottomline is: u buy the gold and keep the bullions but have the choice either to keep or sell back, the choice is yours. Buying back the gold from the customers (buyers) is discretionary. Similiarly with Hibah, it is discretionary. NOTHING IS GUARANTEED be it buy back or hibah. All transactions are signed by buyers in accordance with the requirements by the co. Now with this scenario pl write another article n tell me is it a ponzi scheme? Look at a bigger picture rather than confine to standard texts and see how innovative it is n how it had expanded to other Asian countries. Even Warren Buffet never thought of this.

    • leongchye,

      1. you are saying that Genneva Malaysia business model works? then prove it mathematically on how it works. I will believe you if you can prove it.

      2. nobody will buy from Genneva if hibah & buy back is not guarantee. Remember, you are buying gold at inflated price.

      • 1-million-dollar-blog,

        Who said nobody will buy Genneva gold if hibah and buy back not guarantee, I did and 6Ok of us did. Whats the problem? the gold is in our hand we receive hibah for more than 2 years never failed and never fail to sell back to them on our wish at the purchased price .Why shld they prove how they make profit as long as they continue paying hibah. If they fail to pay we still got the gold in hand. Gold appreciate more than depreciate(universal knowledge). What scam? How they con us? We are not borrowing money them as mentioned by the writer, they use our money to buy the gold , yes maybe at inflated rate thats the profit they make to give us hibah. I think the banks are ponzi, you invest in cash and they give u a piece of paper or a book and take your money for laundering. I lost alot in the bank gold paper investment.
        As far as Genneva accounts is concerned we are not their liabilities bcos they dun owe us and the hibah are not guaranteed.
        Know the facts first before you fellows start making judgements. Its BNM that making a mess here without any evidence after 33 days of investigation causing miseries to many of us here. Why? becos most of us was about to collect our golds until BNM made this uncalled raid and cart away all the gold and the money in the bank accounts
        Be honest in you comments you gals over here. Your unfaired comments will ruin many innocent lives.

        • KK,

          1. 2 years of proven “hibah” and buy back from Genneva is nothing. Look at Madoff investment scam, it take more than a decade to collapse.

          2. then why so many Genneva “investors” crying when they don’t received the “hibah” and don’t have gold in hand.

          3. seem like you still not understand what is ponzi scheme. Read more here.

          4. BNM already state that cash & assets of Genneva is so much less than what so called “investors” pump in. There is simply not enough to return back to the “investors”.

          5. the persons who ruin innocent lives are Genneva owner & consultants. Go after them, they earn so much money/commision from you.

        • Investors,

          Without buy back ‘guarantee’ & ‘discretionary’ monthly hibah, puts you at a bigger disadvantage because you have permitted an easy ‘escape’ clause for the company. Well it isn’t a problem to you because the company has never failed in paying hibah. And I assume you willingly accepted this risk when you participated in this scheme and prepared for the worst. That’s your choice; nothing wrong with it.

          However if anything happens to the company, it reduces your bargaining power to sell unless gold prices increases dramatically by 20% or higher. I presume you were also very well aware of this risk and well prepared to accept the stake in the event something happens to the company. That is also nothing wrong. It’s your choice.

          Please note that Bank Negara didn’t raid the company to ‘interfere’ the risk you willingly embraced but it was on the basis of the company’s tax evasion and avoidance, failure to lodge statutory documents, illegal money deposit, money laundering and appointmet agents without license. All that the directors need to do is to clear the air by cooperating with Bank Negara in their investigations by providing evidence such as fully audited financial report, money trail, documents that support delivery of gold upon signing S&P (S&P alone is not enough because it only covers the terms; there must be proof of delivery otherwise it will be deemed as illegal deposit ). I suspect that they failed to respond to BNM, therefore the company remained frozen. I don’t believe Bank Negara has the authority to raid a company that is outside their jurisdiction . Yes they can’t. Even some scams are not necessarily always under Bank Negara, for example scams that violates consumer rights; ought to be under Consumer Rights agency oversights.

          Currently your position is very weak because you can’t sue the company; because you knowingly agreed the terms when you entered the scheme. You can’t sue Bank Negara because authority is vested on them unless there is evidence on abuse of power.

          However what you can do is to plea with the directors to quickly clear themselves of any wrong doing; which it is definitely within their control by providing whatever proofs such as their financials (to counter tax evasion), money trail (to counter money laundering), documents to support proof of delivery (to counter illegal deposit taking) and etc. These are basic responsibilities for any business operations; so it is at the hands of the director to clear things quickly to resume business. No need to wait for Bank Negara to regulate gold trading.

          On the flip side, I believe there is little incentive for directors to resume business . Why? Because to them it would be better to start a fresh new business on a clean sleigh. Resuming Genneva means the directors are to honour their obligations committed. Meaning they have to shoulder the ‘liabilities’ of 50,000 customers which estimated amount to over RM4billion. This is no small amount; will the directors put their hands to bear these liabilities to keep every customers happy?

          You may say that the directors have done all they could to defend their position; it’s Bank Negara that is playing hardball and ‘bullying’ Genneva. If you accept my money lending scheme analogy; then you will understand it is the investors that are at disadvantageous position (buyer’s loss). Try do your own SWOT analysis.

          But if you want to maintain that Genneva is purely gold trading model; then this raid should only affect the directors (seller’s loss). The raid shouldn’t affect the customers. For example I purhased gold from Poh Kong and assuming it was raided; it shouldn’t affect me because I have no stakes in the company. The affairs of the company is the responsibility of the directors not mine.

          However if I have some stakes in Poh Kong such as my money ‘lent’ to Poh Kong then I have some vested interest in the business. In certain capacity I own some stakes in the company, the directors are somewhat ‘stewards’ of the money lent to them.

          You have to decide which position you are in now. Are you a buyer with no strings attached? Or you have some form of vested interest in the company?

          It becomes clearer to me that it works against the Directors favour to resume Genneva because of the liabilities accounted for.

          In such scenario it is usually the lender who need to push for answer unless you are only a buyer.

          • I believe you are the same Richard Chew who originally wrote this post. TQ for clearly written comments. 🙂

  • wake up geneva ivestor!!!! open ur eyes and accept the failure.

  • my gold , my gold , my gold, is gone.

  • Update of investigations into companies suspected of conducting illegal investment schemes using gold

    Following recent raids on four companies suspected of operating illegal investment schemes using gold, the enforcement agencies would like to provide the following update.

    Investigations reveal that several of these companies have poor record keeping and failed to maintain accurate record of all business and financial transactions. These companies maintained different versions of financial records for different purposes. These companies have also failed to submit audited accounts with the Companies Commission of Malaysia for the last few years, as required by law. For businesses, especially those that involve large numbers of clients and monies, it is imperative to maintain accurate records of all business transactions to avoid financial mismanagement or misrepresentation of the true financial situation of the company.

    Seized records have revealed that a substantial number of investors had paid but had yet to receive any delivery of gold, prior to the raids. The period of non delivery have in some cases, exceeded five months. The total amount of gold seized during the raids from all the companies is approximately 142.7 kilogram, and monies in bank accounts and cash amounting to RM101.92 million.

    The enforcement agencies are aware of the plight facing affected investors and every effort is being made to determine the whereabouts of any monies and assets of the companies. A dedicated team has been established to track the movement of monies and other assets. International accounting firms have also been appointed on a full time basis to assist in the investigations. The scope of the investigation is international. In this connection, the enforcement agencies are actively collaborating with their foreign counterparts to obtain evidence in several other jurisdictions to assist in the investigations.

    Members of the public will be updated with further information in due course.

  • To michael, azmi and the other genneva investors,

    Hi i have some Yamashita’s gold that i would like to sell…if you guys interested pls contact me…haha

  • It is rather a good and interesting article. Say that you are correct, what happens to the gold and money held by the authorities? Will these be confiscated by the authorities? Will these be given back to those investors after their investigations? To me, they should be returned to the investors because those investors used their money to pay for the gold and some are awaiting for their money after they have surrendered the gold to the company. I also believe the distributions should be done under close supervision and monitoring of BNM personnel together with the company’s staff.

    • Steven, no doubt all gold & money that is confisticated will be distributed to those investors. But, it all takes a long time. The distribution method will be what has been approved by the court.

  • Hi 1 million dollar blog,

    Thank you for hosting this discussion.

    Below is some suggestions, hope it helps.

    If the purchaser already paid for the gold and was told to collect them but was confiscated on the very day he/she to pick up the gold; technically the gold confiscated belongs to the purchaser. That piece of gold doesn’t belong to Genneva as the purchaser already paid.

    So in this scenario, the buyer can sue Bank Negara for the loss suffer from the lengthy period of investigation. I don’t think they can sue Bank Negara for ‘robbing’ them unless they have evidence on abuse of power.

    If they use the law correctly they can put pressure on Bank Negara to hasten investigation so that any more delay will be charged to Bank Negara. The purchasers interest are to claim what is due to them, the tussle on business viability and legitimacy should be between Genneva and Bank Negara and not at buyers expense and suffering.

    I feel purchasers can exercise this right.

    And perhaps your next question is after investigation , the court ordered Bank Negara to return the gold but the investor only managed to recover partial ; so what can the customer do?

    The next possible action is to sue Genneva’s Directors to claim the remainder not recovered. And if Genneva Directors claim that the loss is resulted from Bank Negara’s action, still the investor should pursue the Directors because the purchase was made from Genneva.

    Instead Genneva can sue Bank Negara if they cry foul over the loses after the raid. Quite a twist, more like a triangle wrangle..

    If the Buyers do not push for claims for the loss suffered resulting from the lengthy investigation, the cost of delay is at buyers expense. I don’t know at what stage the investigation Bank Negara is now at. But if the buyers can pull resources together and pursue relentlessly, it would put pressure to Bank Negara to devote more resources to resolve the buyers plight than to crack the case to charge Genneva.

    • Hi richard and all other readers here.

      I believe those investors have a case against genneva. Notwithstanding the acceptance of terms & conditions, my lawyer advise me that those papers were signed over misrepresentation by genneva saying that it is syariah based complied in which case they are not.

      Every contract misrepresentally made is voidable at the aggrieved party’s own peril. Hence genneva have misrepresented the investors leading to them agreeing to sign the papers.

      I and many others are taking action against genneva. If you are minded to join too, i can recommend you one lawyer. He is our lawyer too that will help us take action against genneva. Call 03 5511 0890 and speak to Mr. Siddiq.

      My lawyer advised me that we cannot sue bank negara as they did what was needed and they have authority to do so. Same like police, you cant sue the police just because they raid rumah urut etc. now BNM is holding our money and gold on trust. Once we get the court order, we can straight away go to BNM and ask them to release our gold.

      Hope this helps.

  • It would be really interesting to see how they plan to redistribute the confiscated monies after the dust has settled. There’ll be unhappy parties however it is redistributed since it is reported that confiscated assets is only 1/10th of the amount owed.

    2) I do wonder if these “investors” are technically considered “creditors” and be given the first rights to liquidation spoils. And would the 2-3% “entitlement” be part of the monies owed equation or outright disregarded?

    3) Will there be criminal charges filed against the directors and owners of Genneva?

    4) Will the Genneva “investors” eventually get around to seeing reason and stop demonizing the wrong party? It’d serve them better to refocus their efforts on filing a civil claims suit against the true “dalang di sebalik batu”, that is, the directors and owners of Genneva for their personal assets. They have a strong case.

    These are interesting times indeed. Still, it’s sad to see so many people having to experience such loss to sophisticated con artists.

  • Very good blog. Sensible explanation of the Genneva SCAM. especially by Richard Chew. Pity the blind ones though.

    • The blind ones deserve it. Let them be…

    • These narrow minded investors jus failed to understand that Genneva is using the new investors’ money for rolling and paying the the hibah to existing investors. For instance, a new investor “purchase” RM200k gold investment from Genneva without holding a physical gold. With this proceeds, Genneva can service 1 month hibah (RM200k x 2% = RM4,000 per month) to 50 investors with RM200k investment each. Alternatively, Genneva can service hibah for 1 investor with RM200k investment up to 50 months!! That is why they never fail to service hibah to their investors as there is always new “SOHAI” donating/contributing money to the SCAM. They are cumulating the funds until it is big enough for them to runaway!!

  • Have any of you ACTUALLY been to Genneva office and read the contract? Advised that you do so before blogging about it. I have been to Genneva office, invested, and read the entire contract. It is very clear cut in the contract that it is an outright Sale & Purchase, willing seller/buyer, Hibah is not obligated or guaranteed (and therefore not a liability), and furthermore, there is no contract or obligation of them to “buy back” the gold. If a person wants to “sell back” the gold, they fill out a form at the time of sell back, and “request” for the company to buy it, but there is no obligation. Also, I have had the contracts looked at by top lawyers and it is clean and tight that Genneva carried no liability. Nonetheless, BNM did what they did and it is what it is. My point being, all of you should get your facts straight before adding onto a discussion that started with wrong facts to begin with.

    • understand the feeling of denial. It’s a clear cut ponzi scheme…

      I was approach by Genneva consultant about a year ago, put off by the wrong spelling of Geneva. If they spell it right, I might be in the same boat as all the investors. Sorry no technicalities here, say no to imitation.

      I bought my gold coin from UOB, paper gold from Public Bank and KFH. I don’t even trust Public Gold (this is just me).

  • I read that some people said Genneva is not a scam and challenged us to prove it mathematically. Yes we have done this.

    I will post together with my co author in our website in the next few days, a simple video presentation to explain why gold itself is a scam.

    And by the way, banks and paper money are not scams. We did the maths also.

  • I think Michael and Azmi are genneva consultants/agents with their bullshit crap arguments. BNM dah hentam your company, pergi tempat lain cari makan lah, dan ini nasihat saya, cari makan lah dgn jujur dan jgn aniya orang.

  • Mr richard Chew dah explain dgn penuh detail pun masih ramai yang menyokong genneva. Punya bodoh la lu orang. Mau tunggu warren Buffett explain dulu baru mau dgr cakap kah?

  • Gold by itself is not a scam. Buying gold is another way of saving ; infact a wise way to save. Because gold is ‘reliable’ commodity to preserve wealth. Money devalues over time for example roti canai cost abt RM0.60 20 years ago, today it cost RM1.20.

    Gold a precious metal retain its intrinsic value. It doesn’t appreciate in value that’s why I don’t understand why there are some people think of gold as some sort of investment. The appreciation in value that we see in the market simply means that the value of money has dropped.

    So that means you don’t get any richer when you own gold but you ‘preserve’ the value of your saving should the financial system collapse.

    I don’t believe by buying selling gold can make 30 to 40% profit annually; even if it does reflect profit it is likely offset by future value (FV) vs present value (PV). In that context the profit simply means hedging against devaluation of money. How traders can make money from willing buyer & seller is beyond me. If you mention Poh Kong, ok I can accept because they add in their design & workmanship so it is fair to include 30% margin.

    Is Bank Negara really against buying gold? I don’t think so. We experienced bad financial crises in 1998; and learned capital control is a way to insulate the financial system from speculators. We experienced a sudden drop in value of RM thus the government had to pegg to the US dollar and had to back the currency value by the gold reserves.

    So having physical gold is a way to preserve/ back the value of money. In this context I can understand why Tun Dr M is supportive of buying gold because he was instrumental to lead the country’s financial out of the doldrums; so I believe he meant well to encourage people to buy gold.

    So is Bank Negara against people buying gold. Again I repeat I don’t think so. What harm does it do the economy? Infact this practice encourage savings and control inflation.

    What I believe Bank Negara is against is nett money that flows out of the country. It is a cause of concern if the nett outflow of money is not matched by the gold that comes into the hands of customers. All the more if the flow of money involves billions.

    • The statement that gold preserves the value of one’s wealth is not accurate. We have debated this extensively with gold people and we challenged them to bring to us one item, just one item in this whole wide world, where its value never changes. They could not, and therefore gold itself could not preserve your wealth because gold itself is subject to heavy manipulation and other forces.
      We explained this thoroughly in our writings and in the future, we will publish a video on this Roti Canai or bread issue and show for good that this so call loss of value is not occurring at all.
      Also we explained thoroughly on financial system collapse, it is not as described by many people out there.
      Now we have completed our video presentation on why gold itself is a BIG PONZI. View them!
      Thank you

      • Sharif,

        Can you put your video link here. 🙂

  • Here is the link;

    There are two videos inside.

    Thank you

    • My partner has added a third video with mathematical calculations, so please enjoy!

      • TQ. Nice video presentation. Now I understand why you always say gold is Ponzi & bad investment. 🙂

  • How come Bank Negara can’t do much after all the consultant here think that G is illegal?

    Think, do u think BNM and MOF didn’t know about this trading where it involved 100 of millions?

    It’s grey area in Mal law lah.

    How many of u r lawyer here?

    I know it’s ponzi scheme here but you can’t do anything.

    Many public listed com in Mal r also borrowers lah

  • Hi there, thanks for illuminating this very shady transaction.


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