After BYU student David Luker saw a flyer handed out on campus describing how easy it is to make a lot of money by surfing the Internet, he decided to e-mail the address on the flier. Surprisingly, he received a response openly admitting that the program, 12dailypro, is a ponzi scheme.

The 12dailypro program, which has been advertised on campus, promises a 12 percent daily return of money after 12 days by simply surfing the Internet and investing a minimum of $6. The email stated that the program is legal because it is based out of Singapore where ponzi schemes are legal.

Ponzi schemes are a get-rich-quick fraud program that is mathematically doomed to fail. The schemes promise an unrealistic return on money invested, but the method of returning the money is by taking it from new investors to pay off the old investors. Eventually there will not be enough new investors to pay off the money that has already been invested, so the people running the scheme will take the funds and run.

Besides the fact that ponzi schemes are illegal in the United States, people are still making money. Josh Vancott, a senior at the Marriott School of Business from Orem decided to invest some money in the 12dailypro after six of his friends and associates told him about it.

"Since I signed up I have met two people who have made about $40,000 since November," Vancott said.

People may be making lots of money, but that doesn't make it ethical or legal, said Mark Zimbelman, BYU associate professor of accounting.

"You're just taking money from someone else," Zimbelman said. "It's not a legal business. It bothers me knowing that people are doing it even knowing that it is a ponzi scheme."

Vancott said he was not sure what the program was when he signed up. He was told that the money was made by the advertisements seen while surfing the Web. Now that he knows what it is he said he doesn't see himself making a career out of it because any money he will make in the future will come from someone else.

The best way to detect a ponzi scheme is, if it's too good to be true then it probably is, said Bob Wright, FBI spokesman.

Historically, people in Utah are more involved in the get-rich-quick programs because they are more prone to believe in people who tell them something, Wright said.

"It's almost as if people's common sense goes out the window," Wright said. "Even if your stake president or bishop tells you it is a great thing, they may even be tricked. If there are unbelievable returns in money it is illegal, or else everyone would be investing, even banks."

Copyright Brigham Young University 30 Jan 2006