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- Jan 16, 2024
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- Twilight Zone
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- Bronco Big Bend Mid
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- Big Bend
Kinda like Social Security. Take the money. Piss away the money. The scare everyone by telling them the money is all gone so they need to pay more money to get 10% of their money back.I'm not going to claim this is a fraudulent scheme (I just don't know), but in a ponzi scheme, the scheme itself eventually runs out of cash paying money back to customers. Generally, it's based on unrealistic or even impossible returns on investment, but also includes returning money invested or provided for services to prevent drawing attention.
In a payment scheme, the assumption is money is being spent (whether on running the company or extracting fraudulent income), so eventually the money to return cash can no longer be sustained. Bernie Madoff, for example, was caught when he could no longer make payments when the markets tanked and there was a run on his scheme. He also did return a lot of early investors money, some of which got clawed back by the bankruptcy courts.
So returning money is not indicative of lack of a scheme, and not necessarily that it's going to go badly when they don't make payments at some point. The point is, paying off the early investors or customers comes at the expense of the later ones, and it behooves a fraud scheme to placate those early investors/customers so that they don't raise an alarm and pull the scheme down.
If ADV never makes good on delivering enough of these tops to counterbalance the carry costs and other manufacturing/business costs, they could run out of funds to return. The question is, at what point and who decides it was a fraudulent scheme if that occurs?
If you live that long.
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