A well-respected financier, Bernie Madoff convinced thousands of investors to hand over their savings, falsely promising consistent profits in return. He was caught in December 2008 and charged with 11 counts of fraud, money laundering, perjury, and theft.

Here's how Madoff conned his investors out of $65 billion and went undetected for decades:

Madoff used a so-called Ponzi scheme, which lures investors in by guaranteeing unusually high returns.

Ponzi schemes are run by a central operator, who uses the money from new, incoming investors to pay off the promised returns to older ones. This makes the operation seem profitable and legitimate, even though no actual profit is being made. Meanwhile, the person behind the scheme pockets the extra money or uses it to expand the operation.

To avoid having too many investors reclaim their "profits," Ponzi schemes encourage them to stay in the game and earn even more money. The "investing strategies" used are vague and/or secretive, which schemers claim is to protect their business. Then all they need to do is tell investors how much they are making periodically, without actually providing any real returns.

Ponzi schemes aren't usually very sustainable. The setup eventually falls apart after:

(1) The operator takes the remaining investment money and runs.
(2) New investors become harder to find, meaning the flow of cash dies out.
(3) Too many current investors begin to pull out and request their returns.

In Madoff's case, things began to deteriorate after clients requested a total of $7 billion back in returns. Unfortunately for Madoff, he only had $200 million to $300 million left to give.

Another reason Madoff managed to fly under the radar for so long (despite multiple reports to the SEC about suspicions of a Ponzi scheme), is because Madoff was a well-versed and active member of the financial industry. He started his own market maker firm in 1960 and helped launch the Nasdaq stock market. He sat on the board of National Association of Securities Dealers and advised the Securities and Exchange Commission on trading securities. It was easy to believe this 70-year-old industry veteran knew exactly what he was doing.

Madoff really only made off with $20 billion, even though on paper he cheated clients out of $65 billion,

Horton

Help us understand. Since you have dealt with them. You might actually help us understand...


Have you invested and what was your rate of return?

Let's start with that question then we move on step by step.

If you have the balls that is.

Question 1..What was your rate of return? We'd be happy if you kept it monthly, quarterly and yearly. Then year to date.

@rollout did u jus " roll out a joint" before u said that? ( see what i did there?!?! ) LOL my credentials are very well know by a lot of wazuans....ask sparkly I aint no Dande

Hi@Alma thanks for asking a valid question,
1)I have shares i bought in the PPM, bought at 10, currently 60- i thought I mentioned that several times before?.(bought as a group)
2)I have invested in their CMS- rate 18%, interest paid monthly, after tax, roughly 16.5% its really quite straight forward, I needed some cash somewhere in Jan and I just filled out a withdrawal slip and money was wired to my account the day after without deductions no questions asked.
3) i have bought the alma, off plan, it started off at 4.675m, currently at 5.8m, we have a payment plan (bought as a group)
@impunity, thats just ridiculous, I'm not going to post my details here.

@tom boy, why the excitement? please tell me what you find "suspicious" don't give me the duck theory, something tangible would be nice from you and your friend paul for a change.BTW all these years i have seen bad banks, ponds come and go.... i see those a mile away ;) A lion can be seen and the dangers are quite apparent; carnivorous cat, attacks when threatened, however in this case I see no claws or canines, just an investment opportunity. I will take my chances here, odds look pretty good in my favour. Thanks for your concern but it is clearly without validity.

@murchr, Bernie Madoff, was a man respected by all in the industry, was a long time player, giving very AVERAGE returns...not spectacular returns. He did no marketing (unlike Cytonn), for those of you who don't like reading there is a brief documentary somewhere on how he did business. Simply put His sons Mark & Andrew and his brother, Peter who ran the fronting company, did not even have a clue of the delivery room fraud!! Great read it was ,"Wizard of Lies" is the name of the book for all who care for a read.

In summation, Investing is always a risk, and its how u mitigate your risks by doing your own homework. I acquit confident that my homework has been done properly. Having been in this market for 16years now, I think I have a pretty good idea that this is a home run FOR ME. We are always learning. Remember, all these are my views and I bare responsibility for no one.(thats me stating the obvious)

"When you deal with people’s money, as I did for all my life, you realize how strange they are; it’s all like, ‘What have you done for me lately?’ If you made money for me, I was smart... and if you lose money, then it’s all your fault. So you become somewhat callous about people lying."

“They were all told by me, ‘Don’t invest any more money than you could afford to lose. This is the stock market. There’s always stuff that can happen. Brokerage firms can fail. I could go crazy and do something stupid. If you want a [safe thing], put your money in government bonds. So everybody understood this."

“Everyone was greedy. I just went along.".........................
"Their friends had told them, ‘How can you be making 15 or 18 percent when everyone is making less money? Believe me, if you don’t think they had doubts, they had doubts … I would say, certainly, by the mid-to-late nineties."

Just so that we dont loose track on this one I will list down the MDs comments






ON ACHIEVEMENTS





All the best to you Cynton and investors. May we meet in the future.

Cytonn Investments has repaid a KES 220 million or approximately $2.1 million structured real estate loan provided by Taaleritehdas Private Equity, an arm of a Finnish Wealth Management company. The note had been structured at the market rate cost of funds of 18% plus participation in the capital appreciation achieved during the period of the note, delivering the Helsinki-headquartered investor an annualized return of 54%.

The biggest redflag I had earlier posted on Cytonn was this:



Annualized return of 54%? Phew!

Sources:

http://africacapitaldige...onn-repays-2-1mln-note/

http://www.capitalfm.co....ote-with-taaleritehdas/

http://www.businessdaily...2/-/fxi08a/-/index.html



For whatever it's worth, here are a few picture from Amara Ridge (grabbed from Skyscrapercity):


How did the capital appreciate?

I spent 20 min on Cynton website and It made me uncomfortable. the 5 billion they've raised goes into 3 project.

*10 crazy looking mansions investment total, Ksh 625M or kshs 62.5m each
** Crazy/Hollywood kind mansions total, kshs 3.05B

*** Overpriced flats( 1 bedroom ~kshs 5M) total price kshs 1.6b

Make your judgement

Those who want to exit, what are you exiting from? the houses are not done, there is currently no underlying asset tied to your investment, the only way to exit is if they pay you off other people's capital.