I just read Investlah forum's discussion and found 2 loopholes:
1. Genneva sells at a premium vs open market rate, and only offers to buy back at a discount. Unless gold price goes up a lot in the contract period, you lose. Gold price goes down, you lose even more. 
2. Genneva has an escape clause. If you don't sell back, the contract expires, and you're stuck with the overpriced gold. 

If these are the actual contract terms, I really have no idea how they managed to get 65,000 people to buy such overpriced gold... OMG

Aspenvit « Reply #383 on: October 07, 2012, 11:28:42 PM »
Looking at genneva business model, it is not a ponzi scheme. It is a scheme whereby genneva will always make money and will not collapse if managed properly, even if the gold price goes down.

In gold price goes down, genneva lose nothing. For example:

Genneva sell a customer 10g a gold worth rm 1000,contracts 3 months, it earns rm 300 (spot price rm 700), it pays hibah of 2% for 3 months, ie 6% total = rm 60. So net profit rm 240 for genneva.
3 months later, gold spot price dropped to rm 600, if customer no sell back, contract expires. If customer sell back, he gets rm 600 from genneva. Genneva lost money? No, it buy cheap back from customer, and yet holding the prevous rm 240 profit.

I opened a random youtube of Genneva supporter (I think it was #3) where the consultant was clarifying the hibah - reporter asked if hibah is paid out in 3 months time, and consultant said, "no no it's not fixed... it depends... on market conditions, etc."

I think I just found loophole #3. even the hibah is fudgy.

So far only investors and UMNO do the talking.
Where are those GM top management? If this is legit business why still silence?  Isn't it their responsible to say something?

And now highroller troll it in Facebook  :-

I agree. More people kena. More people will learn. All hail Bank Negara Malaysia. 

Jack Wang: The question is, how does one give such high returns on just gold trading?
October 4 at 10:07pm · Like

Raj Sami Many people have tried to explain this but sadly no one is listening.
What Genneva pays you (as monthly installments) is not a "return"
because you have not made an "investment" with them. You have
merely bought gold from a Trader (in this gase Genneva).
So what is it then? It is really the discount applied to your purchase
and paid to you after the purchase. You may call it what you like
but Genneva calls it a gift or hibah but it is a token of appreciation
for trading with them. Every trader in town gives you a gift when you
buy something that is on offer. So then, you have merely purchased
goods (gold) for a discounted price. Genneva further agrees to buy
back your gold after an agreed period of time for the same price you
had paid. If you choose not to sell to them you can sell it in the open
market. No one has lost money here: so where is the "ponzi"?
October 5 at 5:54am · Like

Jack Wang Well, no one lost money in Madoff's investment company until some 40+ years later when the amount was too huge to hide. The gold is sold at a premium and is re-assessed at the end of the contract. My view is that the investor base has to keep growing for this to be sustained. This "gifting" has been used in another scheme, a pyramid where you send invite letters to 6 of your friends and then make a "gift" to the name on top of the list. So by giving a gift of say 1,000, you will get a gift in return of 6 times the value, assuming the chain is not broken. Anyway, be very careful because there is no such thing as a free lunch. And when something sounds too good to be true, it usually is. When Madoff collapsed in 2008, the SEC was questioned why they did not investigate when the complaint was made in 1999.
October 5 at 6:49am · Like

Raj Sami Well... driving on the roads is risky... and yet there are traffic jams everywhere. If 80000 have taken the risk, what is going to stop the next wave of customers? Let's not be too quick to call every thing a scam or ponzi until proven. BN may have other issues with Genneva that we do not know and might never know. No risk no gain... so good luck with your gold purchase folks... lol. End of discussion.

MAS and BNM directors are currently on a trip to Italy and South Africa ? 

Why MAS also haven't charged Genneva in court after 14 day of investigation ? 

In 2009 BNM charged a director of Asia Ceramic sdn Bhd for similar scam. Commodity was not gold but ceramic. same modus operandi as GM. Deposit taking disguised as trading, buying and selling of ceramic sets with buyback plus reward. Cas is up for hearing this month.

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Added on October 16, 2012, 7:13 pmLook at the time line for Asia Ceramics. Investigation started July 2009. Charged in court 13 Oct 2010.
Lim Long Yew and Leong Guan Yeu, the directors of Asia Ceramic Marketing Sdn. Bhd. were charged at Kuala Lumpur Sessions Court for an offence under Section 25(1) of the Banking and Financial Institutions Act (BAFIA) 1989 and Section 4(1) of the Anti-Money Laundering and Anti-Terrorism Financing Act 2001 (AMLATFA).
GM will take at least the same time for charges to be filed.

1.) to avoid being prosecuted as illegal deposit taking
2.) to avoid being prosecuted as illegal deposit taking

Ie. in black and white......no record.....in actual practice........still have 2% return + guarantee buy back.......without these........customer run away........with these.......kena prosecuted.......so......here comes the Genneva's "unwritten rules" 

still in denial stage...