MPF Death Slide

Here is a relatively simple pictogram of the elaborate quasi ponzi scheme Drake engineered, ASIC ignored, the accountants facilitated, the auditors covered up and the salesmen, blinded by greed, swallowed and sold to innocent retail investors across the world.

Notes:

Beginning at the left column above, apply the notes below to understand how the absence of a genuine core value enhancement program drove the MPF into an accelerating death slide.

• 1. LMIM committed a return of 8% on 1 year term (in 2009).

     1. It is not unrealistic to consider the 4 year pattern above to be across the years 2009 - 2012 inclusive.

  2. Salesmen were paid a minimum of 3% of amount invested.

  3. LM Administration were paid up to 7.5% of amount invested. A conservative figure of 4% is applied in the demonstration above.

  4. Korda Mentha (KM) loan value segmentation data is described on page 1 of KM's seventh update to investors.

     1. KM loan value segmentation data shows 80% of monies ‘invested’ in development properties that by March 2013 only one had begun construction!

     2. KM loan value segmentation data shows 4 of 10 loans making up this sector as being in default as of March 2013. In the short term the £186 has to earn the £150 required to return £930 to £1080 in a 12 month.

     3. Assume Drake had negotiated a superb average return of 20% per annum on mortgage and development loans from the fund. The £186 would only have returned £37 (before impact of loans in default), leaving a minimum £113 shortfall in growth required to bring the investment value to £1080 in a 12 month. The £113 shortfall can only be made up by new investors monies and is shown in green as a deduction from year 2 principal.

  5. The pictogram uses a repeating annual investment of £1000 to keep numbers relatively simple. Whether the amount is £1000 or £1m the same effect and end result occurs.

  6. Temporary liquidity is derived from year on year growth of new investors but as soon as this falters the nihilistic absence of a genuine value enhancement program brings the structure to a devastating collapse. The heavy dependence on new investors monies defines, in-arguably, the structure as a Ponzi scheme.

  7. The illustration begs the question of how such a scheme managed to attract investors. That very question demonstrates the massive fraud that four to five years of sales and marketing documents accessible here (also see References below) portray and why the perpetrators must be pursued as criminals.

  8. The absence of a genuine value enhancement core to LMIM activity is demonstrated by the FMIF fund failure in 2009. A catastrophic affair of immense proportion to the Australian domestic investor population. A red flag event of such grave alarm that the Australian regulator has absolutely no excuse for not investigating thoroughly, discovering everything that is illustrated above, closing LMIM down and preventing the misery and devastation of the MPF.

References:

• 1. A number of MPF marketing documents have been annotated to illustrate the heavily fraudulent nature of LM's ruthless marketing campaign. Those annotated documents are available in this folder. To properly see the annotations the documents require to be downloaded and read with a capable pdf reader such as adobe acrobat. All of these documents were made available to ASIC via email between the 26th January 2015 and the 17th February 2015.