Mortgage my home to invest in Harlequin? Let me think about that Mr. Ames…

“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)

Dear BFP,

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.

Yours truly,

Mr. and Mrs. Curious and Curiouser
Birmingham

14 Comments

Filed under Barbados, Barbados Tourism, Business & Banking, Offshore Investments

14 responses to “Mortgage my home to invest in Harlequin? Let me think about that Mr. Ames…

  1. sean chandler

    if it walks like a duck, and quacks like a duck…..

  2. St George's Dragon

    It’s interesting to take stock of what Mr Ames said in this video from January 2010.
    Oasis will operate the hotel, a huge advantage over a normal hotel management company because of their travel agents and airline – Nope, its Harlequin Hotels who operate it, that hotel management company that you have never heard of before with no travel agents or planes.
    Trader Vics will be opening at there – the Buccament Bay website says it will open during 2012. Trader Vics has no mention of a future opening there. They do mention Barbados as a future restaurant, presumably Merricks. I bet money we never see that.
    Mai-Tai lounge will be opening there – Apparently not any more. No sign of them on the Buccament Bay website apart from a Mai-Tai cocktail to be served at Trader Vics if it ever opens. Again the Mai-Tai lounge is slated to be coming to Barbados according to the Trader Vics website, of which it is part. Promises, promises.
    Senor Picos will be opening there – Again, not according to either the Buccament Bay or Trader Vics websites.
    Ginger & Co will be opening – Yawn- due to open 2012. Where have we heard that before.
    Arlecchino will be opening – not until 2012 now apparently, if you believe Harlequin.

  3. Ponzeeee!

    When I buy condos
    I want to see a physical tangible condo.

    Before signing, I want to be able to walk in the door, switch the lights on,
    flush the toilet, see that it all works…
    THEN and only then do we sign!

    The ludicrous idea that one should “invest in” a condo yet to be built
    is clearly for folks willing to lose that money: it’s a GAMBLE..

    Yours Truly,

    Phineas Taylor Barnum
    for Harlequin, Inc.

  4. Anonymous

    Something smells fishy, and I am not talking about the contents of Baldric’s apple crumble.

    Very obvious ponzi scheme, amazing it is still being allowed to go on.

  5. St George's Dragon

    Sorry, I have misled you badly.
    Harlequin does have a chain of travel agents. You can see all seven of them in the picture here:
    http://www.harlequinhotelsandresorts.com/news/e_newsletters/oct11/e_news_oct11_issue2.asp
    Their website does not work:
    http://www.harlequintravel.net/
    They also have a plane. Its a secondhand small aircraft and is not yet flying and can also be seen on their newsletter linked above..
    All in the interest of fairness.

  6. 231

    The message was unbelievable!!!

  7. yatinkiteasy

    I dont know if its just me , but this Ames guy sounds like a complete ignoramus . Poor grammar, not able to properly express himself, etc.
    Besides, he has lied about many “attractions” , such as the 5 star Oasis Brand, Trader Vic, investors not having to pay for their mortgage because of cash flows from rentals , etc..Its only a matter of time before this house of cards falls….I would bet money on it.

  8. Anonymous

    It’s not just you. He really does sound like he has no idea what he is saying, and when you meet him, it is abundantly clear he understands less than nothing about the resort industry. Managed to convince many he does though incredibly.

  9. Antz

    Snake oil anyone, 3 for a tenner, 2 for twenty and todays special, 1 for a hundred. Genuine snake oil, old recipe handed down generation to generation over the years.

  10. Sally

    Why are all these comments from the same ip address? — Me smells something fishy about this whole post and the comments and personal attacks to this company.

  11. BFP

    Hello Sally,

    You have no idea if these comments are coming from the same IP. They are not, but that means that you are a troll. bye!

  12. anon

    If this mess goes tits up in 3 weeks, will Mr Ames still get his £10,000 per month from the freezing order as well as guardian etc getting millions per year in fees from us?

  13. Paddy and his missing plane

    Poor paddy

  14. Filthy place

    Not only does Ames not own the beach its full of wild dogs and shit. The locals run wild in the beach learing at the wealthy tourists, it makes you feel uncomfortable for the unfortunates.