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Is Kuetzal a scam? Is Kuetzal a fraud?
These questions are often posted in many private forums and Facebook groups these days. I think it’s time to share my concerns about Kuetzal with my readers. EDIT: It’s not really a question anymore, it’s more a statement.
I have been investing with Kuetzal since 13.05.2019, so about 6 months. It’s a much shorter duration than many other platforms in my portfolio. Unfortunately, I keep finding things I don’t like.
I’ve discussed most of the issues with the former CEO Alberts, who have been giving his best explanation every time. There’s probably a logical explanation to some of the concerns, I just don’t see it! EDIT: There’s no logical explanation.
I will meet the new CEO Maksims on December 18th. I hop e he’ll be able to shed some light on the concerns I have listed below. EDIT: Maksims had not much value to share.
Before we get into the details
Despite the concerns listed below, keep these facts in mind as well:
- Most of the projects by Kuetzal seem legit. The concerns mentioned in this post are related to a few specific projects. EDIT: While most projects were “real”, the project owners didn’t know Kuetzal in most cases or there was no signed loan agreement!!
- Repayments from all projects are being paid back to investors according to schedule. EDIT: This is most likely because of the automated software, which doesn’t reflect real transactions.
- Withdrawing money from the platform seems to work, even though there are some delayes. EDIT: I have not heard of any successful withdrawals since medio December.
Concern no. 1: Trailer Trade
Before I made my first deposit on Kuetzal, they had a project called Trailer Trade. It was supposed to be a loan to a Danish company. Being Danish myself I got excited and called Trailer Trade to hear if they could confirm this project with Kuetzal.
Long story short, the CEO of the Danish company was very rude. He said they had talked with Kuetzal but there was no deal. When I confronted Kuetzal about it, they said there had been some misunderstandings but everything was sorted out now and I could invest in the project. I told Alberts that I had just been on the phone with Trailer Trade and there was definitely no deal.
A few days after, Alberts got back to me and apologized for the confusion. It should have been a 3-way deal but the Danish company had “backed out” of it. So Kuetzal had decided to close the project and pay the investors back.
A new project emerged called “VM Cargo – trailer and truck reseller”, without the Danish participation.
Due to the rude attitude of the Trailer Trade CEO, I gave Kuetzal the benefit of doubt in this case.
Concern no. 2: ALPA Büve
The former CEO, Alberts, told us that “The owner of SIA Alpa Büve is having issues with his company. For this reason, repayments will now be made from another company by the same borrower – SIA Alpa Building.“
However, I invested into the ALPA project on 13.05.2019, 23.05.2019 and 07.06.2019. According to the Latvian land register, the land plot was bought by AA development on 17.06.2019. Why does AA Development buy a property with funds raised by Alpa Büve? Is the owner of ALPA and AA Development the same?
I previously asked Alberts if Alpa Büve and AA Development was owned by the same person, because they had identical quotes to their pictures. He answered: “AA Developement (Eugene) and ALPA with (Aleksejs) are two different companies and are not connected at all. The case is that they are both running these constructions in Marupe region (and both building row houses), that is why quotes and market research is similar.”
Even if it’s the same owner, it still raises some legal questions. And I’m not sure why Alberts didn’t tell the truth, maybe he didn’t know any better. Lack of due dilligence perhaps?
The economy of the project doesn’t make sense
550.000€ was borrowed to fund the 4 row houses. At 21% interest 665.500€ must be paid back. However, the houses are for sale at 145.000€. 4 x 145.000€ is 580.000€, just enough to cover the 550.000€ loan but not enough to pay for the interest payments as well.
The row-houses are being built though. If you compare the pictures I took on September 19th with the pictures taken today, a lot of progress was made in those 2 months:
Mid September 2019:
Mid December 2019:
The case gets quite complicated because:
- It involves a suspended company which borrowed the money (Alpa Büve)
- According to Kuetzal, the loan is being paid back by another company by the same owner (Alpa Building).
- A 3rd company actually owns the plot according to the land register. (AA Development)
- The selling price of the houses doesn’t cover the principal + interest payments.
What’s going on here?
Concern no. 3: Marina Code
As stated in my Portfolio Update October 2019, one of my readers found some flaws with another borrower on Kuetzal, Marina Code SP. The company was using stock pictures for it’s employees. Kuetzal confronted the borrower immediately but Marina Code could not give a good explanation.
Due to lack of trust and violation of “ethical business conduct”, Kuetzal offered the borrower to close the project and pay back principal and interest to current date to investors. The borrower paid back all invested funds + interest to the investors.
The big question here is: How could Kuetzal get the money back from the borrower so quickly? If Marina Code had the liquidity to pay back the loan instantly, why did they take a loan in the first place? Those loans does not come cheap.
Concern no. 4: Alborg Petrol
This is the hot potato at the moment. Similar to Marina Code, Alborg Petrol have copied content and images from other sources and they might not who they say they are.
Read all the details in the post from Explore P2P.
UPDATE: Kuetzal decided to invite independent auditor, who would perform a company research on current and past operations of SIA Alborg Petrol. The main purpose is to establish a transparent process, where all the investors and other stakeholders will also be able to contact auditor directly.
Concern no. 5: New terms and conditions
As many readers have complained, the new terms and conditions are just horrible. First of all, if you don’t agree, there’s no option to deny.
Section 1.7 states: “The Portal Operator may make changes in the Portal and its functionality, including expanding, changing or removing its functions, at its own discretion at any time without asking permission of the Users for it or giving prior notice to the Users. Among other, the Portal Operator may terminate the operation of the Portal at its own discretion at any time.”
I’m not worried about section 1.7 but many people have mentioned it, so I’ll give you my take on it.
I guess this sentence is put here in order to be able to make platform upgrades (a service window, as we call it in the IT world). I could think of many other ways to say it, eg. Pause the operation, put the operation on hold, take the site down for maintenance etc. Terminate is not the right word to use here!
Section 5.6 states: “The decision as to whether or not to provide a loan to the Borrower is decided upon by each Lender at his or her own discretion. The Lender shall read the Risk Warning (_______) before lending any funds through the Portal. If the Lender requests more information about the Borrower or the Project, it shall contact directly the Borrower. The Portal Operator does not perform any due diligence of the Borrower or the Project.”
To say that they do no due dilligence at all is just horrible. If they don’t do any due dilligence I could just as well lend my money to uncle Phil or the homeless guy on the street.
Response from Kuetzal on Terms and Conditions:
Kuetzal informed all investors today by email:
“We have received a sufficient number of complains regarding new terms and conditions of the platform, especily point regarding due diligence of the project.
Kuetzal has performed it’s own analysis for all the projects on the platform, and so will continue furthermore.
We would like to inform you that terms on the platform will be updated soon, and therefore dispel doubts that have risen.”
Concern no. 6: New bank account
Kuetzal now uses a bank account in Malta. When I asked why they switched, Maksims said, “For us it’s more convenient to use another bank account, but our Estonian bank is still working and we still can accept transfers that are made to Estonian account.”
I have no data to back up this hunch; Is it a coincidence that Kuetzal have funded a project called “Impaya – payment solutions” and the name of the new bank is “Papaya LTD”?
Is it more convenient, because it’s easier to deal with AML procedures in Malta, especially if the payment provider is your friend? Why don’t they just live up to the AML procedures like all other platforms?
Concern no. 7: Lost or stolen ID of the Kuetzal owner
This is no longer a concern. Viktoria is definitely the owner of Kuetzal (at least on paper).
Concern no. 7: They didn’t show up to our second meeting
2 blog followers/investors and myself met Maksims on 18.12.2019. We asked if he could prove that Victoria is a real person, like simple proof of communication eg. mail, texts or anything from her.
Maksims said he met Viktoria one time and that was for the job interview in Tallinn 14 days ago. He said he also had email conversations but he couldn’t show it to us because he didn’t have work email on his phone. He only used PC.
Maksims assured us, he was going to Tallinn right after our meeting. Kuetzal’s bank was the reason of the slow withdrawals, because they had initiated some AML checks. Viktoria and Maksims had scheduled a meeting for the 19th at 8 AM, where they’d discuss how to fix the issues with their bank and problems with the projects mentioned above.
My friend/follower from Berlin asked if he could have breakfast with Maksims and Viktoria in Tallinn. He was going to be in Tallinn tomorrow anyway and would love to meet her. Maksims agreed to that and said he was welcome to join their meeting.
Despite several attempts to get in touch with Maksims, my friend did not hear much from Maksims again.
As we expected, neither Maksims nor Viktoria showed up.
Concern no. 8: Viktoria’s husband
Maybe Viktoria didn’t want to meet us, because she’s only the owner on paper? Viktoria’s husband, Andrei Korobeiko, could be in charge of Kuetzal. He was sentenced for money laundry in 2012 (which happened in 2010).
In 2017 he was involved in a minor criminal case, (which happened in 2015). Probably a bar fight or something. (I’m not worried about that one, this happens all the time.)
Even though this is a new concern to add to the list, I’m happy to find out that Kuetzal was not created from a stolen ID. A stolen ID would have indicated clear intentions of fraud, which is much worse than a husband with a less attractive background!
As it is now, Viktoria is actually risking her future if Kuetzal is involved in fraud. If I was a criminal, would I risk putting my wife’s future at risk? Definitely not!
Update: Maybe Andrei is Viktorias ex-husband? He’s single according to his facebook profile.
Concern no. 9: SIA AA Development
The founder of SIA AA Development is Alberts Cevers wife Evelina Milus, not Eugene Koshakov:
Concern no. 10
Project “Anniņmuižas bulvāris” was financed by EstateGuru, NOT Kuetzal. Someone called borrower and asked about the situation. The borrower told that they had discussions with Kuetzal, but thats all.. They haven’t got any money and there’s no agreement.
Same story with Project “Velox”: “Thanks for your inquiry! I’m the director of a company SIA Velox Latvija, but this is the first time I’ve seen these companies and announcements! We are not familiar with companies Kuetzal or AA Development. I’ll try to figure out tomorrow what it is! But it looks like some kind of fraud!”
I and two other investors met Maksims today. He started in Kuetzal less than 14 days ago and didn’t know all details about the projects yet. We were not impressed by his answers.
One thing he did say was, that the Latvian employees of Kuetzal followed Alberts to his new job. So Kuetzal will move their office to Tallinn now, to be closer to the owner, Viktoria Gortsak.
He agreed to a second meeting with the owner of Kuetzal tomorrow morning in Tallinn. She knows more about the projects and should provide better answers. Unfortunately, I am not able to attend the meeting but I have have a good friend who is going for me.
He’ll report back to me tomorrow. I’ll let you know when we know more.
Concern no. 7 added to the list.
Maksims response to our questions was too weak for us to trust him.
The fact that he couldn’t live up to his promise to us and show that Viktoria is real is the nail in the coffin for me.
On top of that, rumors are flowing in Riga about who the real people behind Kuetzal are. I don’t know if the rumors are true, I like to stick to facts only. However, I’ve heard the rumors from different independent sources and I don’t like what I hear.
Kuetzal might keep paying everyone for a while, or maybe forever, I’m not sure.
Something smells very fishy and I only want to do business or invest with honest transparent people who keep their promises. In my book, Kuetzal failed this task and I have zero trust in them anymore.
Renamed Concern no. 7 from “Lost or stolen ID of the Kuetzal owner” to “They didn’t show up to our second meeting”.
I’m happy that Kuetzal was not created with a stolen ID.
Concern no. 8 was added to the list.
Kuetzal update their about page – Only Maksims is listed now.
Maksims replied to my LinkedIn message. Other investors got the same reply today:
Reply from European Crowdfunding Network:
Reply from TotalGames (borrower of Total Poker and Goodville):
How can Kuetzal raise money for a project without a signed agreement by the borrower?
Maybe the situation with Kuetzal and TotalGames isn’t as bad after all… Communication is a tough task, especially when English is not the native country of most people in Europe.
I received answers to my follow up questions to TotalGames. This is his response. What do you think?
Concern no. 8 added.
Concern no. 10 added.
We can probably keep adding to the list, it looks like everything was setup to be a fraud. I don’t think more proof is necessary.
I have sent a buyback request of all my investments to Kuetzal.