1. Initial Credibility: The person running the scheme usually is a person of some credibility who is able to convince the initial investors to trust him/her with their money.
2. Investors fail to refer to regulatory authorities to ascertain the genuineness of investment companies.
3. The offered deals are always too-good-to-be-true and the investors try to keep it secret from those who otherwise would have helped them discover the trick/fraud.

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