September 13, 2005
Tuesday

In the past three weeks I have received several dozen e-mails from Pipsters who have finally seen the light and realize they have been ripped off.  Just two soreheads in the bunch, and the primary question has been, "Can I get my money back from PIPS?"  In many instances you do have positive prospects in that regard.

As a statistical sample these e-mails present one somewhat disturbing aspect:  Very few people invested the minimum.  Most invested between $3000 and $10,000, and one individual invested $40,000.  The implication of this should be fairly obvious to law enforcement and business types.  If the average is as high as $5000 per head and the low-end number of 80,000 victims is correct, this is one whopper of a scam.

To date most commentaries or observations about PIPS originating with law enforcement or with the press have emphasized the fact that your money is basically gone, little or no chance of recovery.  I do not endorse that point of view because I do not believe it to be an accurate assessment of your options.  Basically, your prospect for financial recovery is contingent on how you got into PIPS, or perhaps more succinctly who else might have helped or encouraged you to get into PIPS. 
 
To start, however, you must discard two completely separate mindsets.   First, buck it up and face up to the fact it is difficult and embarrassing to admit a mistake.  It's embarrassing enough sitting by the side of the road while some cop writes you a speeding ticket; even more embarrassing if, as I did some years ago, you have to peal yourself out of a completely totaled car, then personally report the fact of your own one-car accident to the cops.  PIPS victims have been inundated with secret society and cult conduct, specifically intended to inculcate paranoia and an atmosphere of 'them and us.'  You have been conned; a good con leads you to con yourself.  There is no reason for embarrassment; they are masters at their craft.  Be mad that they have made you feel bad, even for a moment, about yourself.
 
Second, get this notion out of your noggin that Bryan Marsden, wifey-poo, and staff are the only criminals involved in this scam.  You have lots of targets.  Owen Platt has plenty of story from his point of view in the personal downfall of Bryan Marsden, but the Marsdens very well may not be the primary beneficiaries of this scam.  Platt has discovered that at the local level people who have been ripped off for a lot of money sometimes get real angry and actually on occasion make bombastic threats, and he is clearly quite squeamish about this.  I, on the other hand, find that pretty ordinary conduct given the circumstances.  A lot of the money ripped off in PIPS' name did not go very far and instead ended up in one of your neighbor's hands.  The incredible number of local grifters who have come out of the woodwork, in combination with previously honest individuals who decided that stealing from their neighbors was OK, makes the many local stories about PIPS ultimately far more interesting, and probably more volatile, than the fate of a couple of sleazemeisters in Malaysia.  
 
Finally, do not regress in any sense.  Despite a lot of misinformation to this day, PIPS is dead.  It is not coming back, and the evidence is strong that the Marsdens will not be able to buy their way out of their current dilemma.  They have been very deftly boxed in.  A number of people have asked why mainstream national and international media have never carried this story.  I can assure you many serious-minded people are curious about that.  There have in fact been many efforts on the part of numerous individuals to bring this to the attention of national and international media.  One response I have specifically received is that this is happening in Malaysia, and it is not worth the effort to get the information from Malaysia because of the lack of local significance.  I present the hypothesis that the media is a product of the intelligentsia, and PIPS is as anti-intellectual as you can get.  The media just cannot take it seriously, and, if you think about it, that might be an understandable point of view.  Turning $1500 in five years by giving it to Bryan Marsden into an $87,000 lump-sum payment plus $9300 a month for life is ridiculous.  End of story, what's the problem?   Mainstream media will report the story when the trials are concluded; there are many more interesting things in the world for the mainstream media to be concerned about right now. 
 
Can you get your money back if you sent your money straight to PIPS in Malaysia?  NO.  The probability of recovery if you dealt with Malaysia directly is painfully low. 
 
Can you get your money back if you gave your money to a local intermediary who then sent all of your money to Malaysia?  YES.  Sue the SOB that took your money; that individual has little defense against a civil action.  He is acting as an agent in the furtherance of a criminal activity.  Whether he or she profits directly thereby or not is immaterial.  It depends on the jurisdiction and the laws in other countries, but it is also highly probable such an intermediary has engaged in felonious conduct and can be criminally charged.  Be pissed, file a complaint.  Local law enforcement may not want to proceed with such a case, but once a complaint is filed, they don't have much choice.  You'll have to watchdog 'em and kick 'em every step of the way, that's all.  These are the kinds of cases that sit on the corners of desks for a long time unless someone agitates.
 
Can you get your money back if you gave your money to a local individual who pocketed your cash and sent PicPay to Malaysia?  YES.  In most respects see the preceding paragraph.  This is also essentially 'prima facie' evidence of blatant theft, larceny, etc.; a good detective could come up with a laundry list of serious charges against such an individual.  The incentive for a quicker and more complete recovery of lost funds is optimal with this option.  The more complete the recovery, the shorter the time in prison to be served.
 
Can you get your money back by going after someone else?  MAYBE.  There are a fair number of internet sites like 'Talkgold' and the 'HYIP Forum' that make a lot of money by advertising and promoting these scams.  I have also seen these ads on Google and MSN.  Is there culpability here?  The mantra of business is to do anything that is legal, thus by this very limited standard it is presently legal to advertise and promote criminal frauds.  The apparent assumption by these organizations is that they can get away with this without any legal consequence.  That is not a bet that I would make.  PIPS, for example, is used as the number one come-on to the 'Talkgold' site.  The attraction to 'Talkgold' advertisers, therefore, is that the PIPS forum on 'Talkgold' attracts a lot of ready-made and well-trained suckers, what we more simply called 'fruitflies' in a less relativistic time.  I believe a sharp lawyer could easily argue that constitutes a business plan, if not a business model.  In such case I think you could prove culpability if you could prove you were in fact influenced to blow your dough by these ads.  Not impossible, but certainly more complicated to do that.

There are also those many individuals who have boasted on the internet that they are "in profit" from this activity.  None of them are as anonymous as they believe; they can be tracked right to their individual computers.  These people are all thieves, and they have next to no defense in civil court.  The worst of them can potentially face serious criminal charges as well.  
 
Anything you do is an uphill fight.  You first have to overcome inertia created by your own embarrassment.  You then have to motivate and keep motivated law enforcement assets to resolve your case.  You may need an attorney.  Each individual must decide for themselves how much their money is worth to them, how much their pride and dignity is worth to them, and then determine how far they want to go in seeking justice and retribution.  Obviously, if a small quantity of money is involved, file a complaint, and otherwise forget it. 
 
You also may have an edge if you are a member of a group of PIPSters left out in the cold.  Law enforcement in at least one jurisdiction has recommended the pooling of resources to take action.  This opportunity is clearly much more prospective than multiple, isolated individual actions. 
 
There is also the question of tax consequences, and in the USA that subject is direct and simple:

1) Capital gain and loss rules do not apply.  PIPS income is ordinary income.
2) PIPS is a criminal enterprise, specified as such by the FBI and by numerous other actions. 
3) All gains from a criminal enterprise are taxable as ordinary income.
4) All losses from a criminal enterprise are not allowable in computing taxable income.

I encourage all of you who have lost substantial sums to PIPS to take prompt and vigorous action.  Good luck in your endeavors. 

David G. Hanger
Ketchikan, AK - USA

 

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