Fraud Risk Assessment: New Generation Export

New Generation Export
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  • New Generation Export
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  • Last modified: November 25, 2015
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New Generation Export (NG Export) & subsidiary NG Milk (ng-export.com & ng-milk.com) were launched in 2015 as investment services. The company’s legitimacy has been evaluated based on the items listed below. Every individual item has been checked for the presence of obvious red flags or warning signals. If these are present, an explanation detailing what triggered them has been included. A detailed description of the reasons to evaluate each of the included items can be found below the table.

Persuasion
Total Flags: 15 (3 Warnings = 1 Flag)
Phantom Richesflag-iconIt is advertised that the "investment plan allows you to earn a lot of money in the short term."
Scarcitythumb-up-iconN/A
Source Credibilityflag-iconIt is mentioned that NG Export has been "cooperating with China for 3 years" but this is a clear lie in an attempt to build credibility. First there is the website that wasn't created until June 2015, but more importantly the official Federal Tax Service documents featured on the website show that an ID was first assigned in July 2015. Lastly, it is also mentioned that "each member of our staff - is the best of the best, an expert in that business", which is an unverifiable claim that is also intended to add credibility.
Social Proofflag-iconA bonus of 10 percent is offered to users who record a video review, which is a combination of social proof and reciprocity in order to get users to persuade others to join. On top of that affiliate can earn up to a staggering 20 percent referral bonus (meaning that it would practically be giving away any profit margin).
Reciprocityflag-iconSee Social Proof
Products
Guaranteed Returnflag-iconThe company explicitly offers guaranteed returns, because the terms state " the company is obliged to calculate and pay the profit in accordance with the investment plan provided by the Company".
High Return / Low Riskflag-iconWith a return of 2% on weekdays and 0.02% on weekend one can easily calculate this implies an unrealistic and unsustainable return of more than 17,000% per annum.
Overly Consistent, Positive Returnsflag-iconSomehow the investment plans return a perfectly steady income percentage regardless of any external variable such as price inflation, Western sanctions against Russia and the economic downturn in China.
External Risk Insurancethumb-up-iconN/A
Secretive or Complex Trading Strategyflag-iconThe main strategy is to buy food (on the Russian market) and export it to China. It should be noted that Vladimir Putin's sanctions against food imports from the West have caused food shortages in Russia and prices to spike. Second, the Chinese are experiencing an economic downturn. NG Export does not explain how it is able to function properly despite these conditions. At the very least this should cause variation in income (see Overly Consistent, Positive Returns).
Service
Website Availablethumb-up-iconYes
Website Registration Detailsexclamation_warningThe main website has a relatively short lifespan as it was registered June 6 2015. It has been registered for a period of 3 years. The subsidiary was not registered until October 31 2015.
Website Designthumb-up-iconGood
Grammar on Websiteexclamation_warningThe website was put through Google translate at best. The English version of the website is an amateurish disasters in terms of language used.
Payments Optionsexclamation_warningMultiple, but all of them (e.g. Bitcoin, Payeer, OKPAY) leave the recipient with some anonymity.
Service Disruptions & Unbusinesslike Conductflag-iconThe company did not bother properly translating its terms and conditions, which is the most important legal basis for doing business.
Contact Informationflag-iconOnly a phone number is listed, while the address is somewhat hidden (it is featured in the investment agreement) and likely fake (see Verified Address).
Business
Verified Addressflag-iconThe website has activated privacy protection, but the address listed on the Federal Tax Service website is:

Novoryazanskaya ul., 18, 7, Moskva, Russia, 107078

Russian:
107078,ГОРОД МОСКВА,,,,УЛИЦА НОВОРЯЗАНСКАЯ,18,7,,

This is not consistent with the address used in the official investment agreement on NG Export's website, which is:

Okeanskiy pr., 17, Vladivostok, Primorskiy kray, Russia, 690091, 7th floor

Russian:
Приморский край, г. Владивосток ул. Океанский Проспект 17, 7 этаж

For the record, the same BIN number 1157746655604 is referred to in both cases.

Then there are also at least two phone numbers. The first one is +7 - 92 - 99087634 which is a landline in Moscow.

The offical number on the website is 8-800-555-71-04, which is a toll free mobile enabled number in Russia.

The latter could indicate that at least the operation is being run from Moscow.

In any case, this company uses at least one fake address.
Verified Ownerflag-iconThe company has secretive owner with no online footprint. Given the previous (Verified Address) any identity is likely to be false.
Business Registrationflag-iconNG Export might have a Business Identification Number (see,Verified Address), but it is not included in the Russian exporters database.
Financial Regulator Registrationflag-iconNot found
Independent Auditsexclamation_warningNone

Note that items with a warning instead of a flag indicate that these could occur at a legitimate company. For example, legitimate companies will normally try to persuade you into buying their products. Multiple warnings will, however, still trigger a flag. A description for the listed items is provided below. This list is meant to assist with identifying obvious scams, and therefore does not provide any guarantees that a company is truly legitimate.

Phantom Riches
The most common tactic used by fraudsters is called “phantom riches”. By dangling the prospect of wealth such as “big payoffs”, the scam artist tries to get you to stop thinking logically.

Scarcity
Using the fear of missing out, fraudsters create a false sense of urgency with statements such as “last chance” or “only so few available”. This causes people to agree hastily, before even having the opportunity to think about what they’re doing.

Source Credibility
Persuasion is more likely when the source presents itself as being credible, expert and trustworthy. Common tactics used by scammers to make themselves look legitimate include using fake websites or hacked emails and pretending to be someone they are not. Alternatively, sources can also be external with claims such as “Warren Buffet has already invested in this”.

Social Proof
Fraudsters take advantage of herd behavior by creating the illusion of consensus or social proof that the investment is legitimate with claims that “everybody is already doing it”, or referral programs in which members encourage their friends and associates to invest as well. This automatically triggers something in the head that says: “if everybody [or someone from the inner circle] wants it, it must be good”.

Reciprocity
A business is likely to receive far more of our trust when it provides a lot of free value, because of the rule of reciprocity which causes us to tend to feel obligated to return favors after people do favors for us

Guaranteed Return
All investments carry some degree of risk, so a guaranteed profit is a clear red flag.

High Return / Low Risk
Like a guaranteed return, a high return / low risk investment opportunity also defies the common risk-return relationship. The best advice is an old one: “if it sounds too good to be true, it probably is”.

Overly Consistent, Positive Returns
Cryptocurrency markets are among the most volatile markets, hence the performance of any related product or service is also expected to fluctuate.

External Risk Insurance
The fraudster may present some external risk insurance for the investment in order to add to its credibility. In reality, insurance is only seldom acquired and guarantees typically lack substance. Dummy companies are often used to act as the guarantor or insurer.

Secretive or Complex Trading Strategy
Even in the world of cryptocurrencies one should be skeptical about special competitive advantages without any proper disclosure, or when the information is incomprehensible or incomplete. Too often only the positive elements are accentuated.

Website Available
Considering the importance of  domains and websites in the internet age, there is almost no reason for a legit company not to have one.

Website Registration Details
Very few scam websites survive longer than one year, so domains are generally registered for just one year unless otherwise required for the specific domain. For the same reason, websites created less than one year ago should be considered suspicious.

Website Design
Amateurish, cluttered and disorganized websites can point to a scam as many scam sites use text and images from legit websites and other sources which may not work together very well.

Grammar on Website
Many scammers have limited English proficiency.

Payments Options
Even though cryptocurrency payment options are logical for a cryptocurrency company, it is also very convenient for scammers as the recipient essentially remains anonymous. The same goes for services such as Western Union and Moneygram. Hence a lack of alternative payment options should still be considered a warning signal.

Service Disruptions &  Unbusinesslike Conduct
Especially Ponzi scheme promotors will encourage participants to “roll over” their investment. These schemes are not very fond of investors cashing out, which may lead to difficulties receiving payments and a non-responsive or difficult to reach customer service.

Contact Information
Legitimate companies have very little reason not to list their contact information.

Business Verification
First, you should never hand your hard-earned money over without knowing where it is going. Second, you should do a background check to avoid handing it to a known scammer. Be weary of people without an online identity. Scammers will typically try to hide their identity or conceal their true identity to avoid being easily discovered. Especially investment services are normally subject to strict regulatory oversight, so a registration should not be hard to find.

Independent Audits
Audits certainly do not root out every instance of fraud, but auditors do have a responsibility to detect errors or fraud in the company’s financial statements.

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