“People are still investing every week with Harlequin throughout the Caribbean” (Harlequin Chairman David Ames)
This differs from a “Ponzi” scheme in what way?
(Mr. and Mrs. Curious and Curiouser, Birmingham)
We used to think that Harlequin “investors” were big shot rich people. After watching Harlequin Chairman David Ames in this video we’re sure that a good portion of them are ordinary retirees who worked hard and were persuaded to mortgage their home to ‘invest’ in a dream. We hope they get out what they put in.
When we watch this video it is difficult not to think of the word “PONZI” as Mr. Ames launches a convoluted explanation of how this business model is “very affordable”. (“Very affordable for whom?” we have to ask Mr. Ames.)
We think what he’s doing is paying the “investors” so he can use their good names to obtain funds for building, but if no profits are coming in, aren’t the first “investors” being paid with money coming in from later investors?
How is an “investor” different than a “partner”? Mr. Ames says the “investors” are “partners”. Does that mean that their “deposit” is not in escrow because it is an “investment”?
After watching the video three times, we swear we can’t figure out exactly what the “investment” model is all about. It could be that we’re just too stupid to appreciate the business model and benefits for two retired teachers from Birmingham.
Harlequin Chairman David Ames Posted on YouTube January 16, 2010…
“People are still investing every week with us throughout the Caribbean”
(Starting at about 1:15 in the YouTube video…)
“What happens is, we ask our investors to raise 30% of the property price. Let’s just say they invest a hundred thousand pounds, what we look for them to do is to raise 30% of that which is thirty thousand pounds. Now let’s just say that cost them in a mortgage or a loan, let’s just say two hundred and fifty pounds a month. Well, what we then do… we actually pay that money back to the investor so the time during the build, it doesn’t actually cost them a penny out of their own bank. We’re actually, the project, the resort, is paying for those payments for them.
And why would we do that? If you think about it, that Harlequin is a partner with our investor because Harlequin actually owns the resort. So what happens is, when we’re letting out their room – renting their room, we actually share the percentage of the money from that room.
So for example with our investors they receive fifty percent of the room rate after the second year. So what happens, for every hundred pounds our investor gets fifty and the resort gets fifty…”
That sounds wonderful to us Mr. Ames, but we still have this question:
If there are no rooms yet built, and there are no room rental revenues: where is Harlequin getting the money to “pay that money back to the investor so the time during the build, it doesn’t actually cost them a penny out of their own bank.” as Mr. Ames says?
Is the money coming from new investors, and always more and more investors are required to keep the pot large enough to “pay that money back to the investor so the time during the build, it doesn’t actually cost them a penny out of their own bank.” ????
This differs from a “Ponzi” scheme in what way? We’re not making a statement. We’re asking a question and we can’t figure it out.
Mr. and Mrs. Curious and Curiouser