Suggestion: Why don't all those who owe Citibank via personal or business loans or credit cards write or call them and explain that, as gun owners and shooting enthusiasts, they will be only too happy to blacklist Citibank and not pay back their loans. Also, ring them up from a payphone and ask whether their security guards are going to stop carrying firearms, and ask if they can find out when this policy is going to take effect, because you and some friends are quite interested. Incidentally, this example of a classic real-life HYIP/Ponzi is worth a peruse http://www.smh.com.au/news/0105/18/pageone/pageone7.html I post stories like this every day to my weblog http://leviathan.weblogs.com For those interested. Text: Steiner school families lose millions to shady investor When Peter Krack, the man in the white shoes, spun his tales of huge profits, some people believed him. Now they have lost everything, writes Paul Barry. A group of Australian investors has lost millions of dollars by sending money offshore to a man promising returns of up to 1200 per cent a year. The self-styled investment guru Peter Krack vowed he would make them rich, solve their financial problems and bring them freedom. Instead, he appears to have wiped out their life savings. People in the United States, Germany, Holland and Switzerland have also lost millions of dollars in what looks like a huge financial scam. Almost all the Australian investors met Krack through the Rudolf Steiner movement, which has some 40 schools in Australia and about 800 worldwide. Many went to seminars he gave at Steiner House in Sydney or Samford Valley School in Brisbane in 1995 and 1998. The rest heard about Krack through friends in the Steiner movement, even though it did not officially sanction him, and trusted him because of it. It is not clear how many people sent Krack their hard-earned money, but one Brisbane family will lose at least $450,000 if their investment is not repaid. Another family in northern NSW is facing a loss of $350,000, and a German investor has waved goodbye to more than $US600,000 ($1.1 million). In addition, the Herald understands that three Swiss investors have lost between 50,000 ($55,000) and several million Swiss francs. Ms Sally Wilson, a Sydney nurse who sent Krack $150,000 in October 1997 on the promise of a more modest 24 per cent annual return, did not meet the man who calls himself an international financial investment adviser until two months after she had parted with her money. "If I'd seen him first, I would never have invested," she said this week. "He had white shoes and a white suit, and I knew at once that I didn't like him." But invest she did, along with many others. A fax from Peter Krack assured her that it was a "good, immediate and secured investment". And since her friend Ms Diane Watkin, who runs the Michael School in Leichhardt, was already an enthusiastic supporter of Krack's, she decided to risk it for three months. She had just sold her home in Balgowlah and converted all her worldly goods into cash. On Krack's instructions, Ms Wilson sent $150,000 - almost everything she had - to an account at the Bank Romania in Bucharest. It was the last she ever saw of it. In February 1998, when she tried to get the money back, all she got from Krack was excuses. Three years later, she still hasn't received a cent, she is living in rented accommodation, and rues her mistake: It sounded good to be true, and it was. Ms Wilson has complained to the Australian Securities and Investments Commission and the NSW Fraud Squad, but both have told her they can do nothing. Another Sydney woman who entrusted her savings to Krack sent $10,000 offshore in two separate transfers - the first in 1996 to an account at a bank in Monaco, the second in 1998 to a bank in Liechtenstein. She, too, has been unable to get it back. Three times, Krack has promised her a payment.Three times his promises have come to nothing. "I guess I was naive and gullible, but I thought I might make $30,000 and I really needed the money," she said. Peter Krack first came to Australia in August 1995 with glowing tributes from a Hungarian author, Georg Kuhlewind, a highly respected figure in the Steiner movement, which believes in bio-dynamic farming and an arts-centred, nature-based, curative education. Potential investors in Australia were told that Krack had solved the financial problems of Hungary's Waldorf schools by using his investment skills to make millions. Here, it was promised, he could do the same, and make money for cash-strapped parents, too. He would be their "Robin Hood, stealing from the rich to give to the poor". And he would help them do good, because part of their profits would go to Steiner schools. In Sydney, about 50 people turned up to hear him speak. In Brisbane, he attracted a similar crowd. Newsletters followed from local enthusiasts, giving glowing accounts of his talk. One woman gave him $100,000 of her daughter's compensation money. Others scraped together $2,000 or $3,000 to pool their funds so they could reach the $10,000 minimum investment. In the beginning, some did get paid, though only in small amounts and only after making a fuss. The Samford Valley School in Brisbane received $29,000 from Krack as a dividend. But before long, investors found it was impossible to get their money out. There were delays, hitches, snags. Throughout autumn 1998 Sally Wilson called or faxed Krack in Switzerland almost daily. Finally, in April, he revealed that her money wasn't in Romania after all. Instead, it had been passed to a financial consultant in California called J.C. Jeffers, who had placed it in a number of unlikely sounding pooled investments. Faxes from Krack, with addresses in Mexico, Switzerland and Canada, then arrived for his Australian investors, offering explanations. The letters were "dictated by J.C. Jeffers" or "From the Desk of Peter Krack". None of them made sense. First there was "the $5 billion Malaysian deal"; then "the New York program"; then "the UN and Washington transactions"; then the "Chase invoice" and the "World Bank placement"; then there was the "two $10- millions" and "the $100 million". And finally there was "Eltrade", which divided into the "Original Eltrade Transaction", "Secondary Eltrade Transaction" and "Secondary Eltrade Program". According to Jeffers and Krack, there were glitches with all of these, but all were just about to come good - as soon as Washington's power brokers, the FBI or the Federal Reserve Bank gave approval, or Scotland Yard allowed the release of funds. Three years later, the same tired excuses are still on offer. J.C. Jeffers told the Herald this week: "I believe the resolution of this matter is at hand. Earnings from the original program are now in private hands for the first time in over three years - the expectation is that these funds will reach our control in the next few days." There is no doubt that many Australian investors still cling to the belief that they will get their money back. But this is a common feature in financial scams in the US, which typically promise incredibly high returns. Many have targeted Christian communities because they have such faith in the unprovable. These investors have continued to trust people who have taken their money, even after they have been convicted of fraud, because a good Christian has recommended them. The Steiner community, with its high ideals, is arguably as vulnerable. Diane Watkin, told the Herald this week: "Peter Krack is a man of the highest integrity. He has been relentless in his attempts to get our money back." Ms Watkin is convinced that investors will be paid. "Nobody's lost a penny. It's just that one contract has been delayed. Peter got a letter last week from the president of the bank in Switzerland to say that the money was on its way." Which bank? the Herald asked. "I don't know," Ms Watkin replied. "I wasn't told. Peter says you have to retain confidentiality." Back in September 1998, Peter Krack promised Australian investors he would take legal action against Jeffers if funds were not returned immediately. But this is another promise he has failed to keep. Instead, he and Jeffers are now being pursued by angry investors. Last month in the US Federal Court in California a German investor, Markus Wulfing, won a $US1.2 million damages award against Jeffers and Krack, in a case that alleged the duo conspired to defraud him of his investment. Meanwhile, a class action against Jeffers is being contemplated by investors in Australia and the US. One investor in Pasadena, California, has lost $US500,000. Another in Georgia has dropped $US400,000. Internet bulletin boards make it clear that scores more have plunged their money, via Jeffers, into Eltrade. Sally Wilson, for her part, is suing Krack and Jeffers in a case that is soon to come to trial in California. Krack has neither filed a defence nor answered the summons, while Jeffers did not show up for the last pre-trial hearing. Since the mid-1980s there have been more than a dozen civil claims against Jeffers in the California courts alone. His company's name also appears on Internet blacklists of people to avoid. But so far, investigators have refused to act on complaints from investors. The Swiss Federal Banking Commission told Sally Wilson in 1998 that they couldn't help because Krack was a Canadian citizen. The British Columbia Securities Commission told her that it wasn't their affair either. Krack, meanwhile, remains open for business, despite telling the Herald that he was no longer accepting people's money. His March 2001 newsletter tells Australian clients that new investors are pouring in. Their money, he says, will enable him to pay back existing clients by (illegally) diverting new investors' funds. Last month, a Brisbane woman contacted Krack to tell him she had a property settlement she wanted to invest. Krack e-mailed her back to say: "From [$US5,000] upward we have two functioning placements - one with payouts in July and January, the other every three months. "Profits are negotiable with me. Capital has to be entrusted to a company via myself. Profits between 20% and 30% per annum. We have a $US300,000 and up placement for much higher returns." There was no mention of Krack's past disasters or losses. Furthermore, the prospective investor was asked to sign a two-page agreement affirming "under penalty of perjury" that Krack had not solicited her money. The agreement,which was clearly designed to protect Krack from prosecution by US authorities, asked her to acknowledge that he was not licensed under the US Securities Act of 1933. The woman refused to sign, and did not hand over her money. New Books at Discount Prices --- Send the right message --- + Today freemail + Get your free, private email address at http://www.today.com.au --- You are currently subscribed to e-gold-list as: archive@jab.org To unsubscribe send a blank email to [EMAIL PROTECTED]
