Railbus

Key Points

• Railbus is accused of operating a fraudulent equity crowdfunding scheme, potentially scamming hundreds or thousands of investors since at least 2022.

• The company lacks SEC filings, mandatory disclosures, or affiliations with registered brokers or portals, raising significant red flags.

• Railbus promotes unrealistic returns (e.g., 200x) with “low risk,” a hallmark of investment scams.

• Efforts to legitimize the operation include fake reviews, a “Legitimacy” page, and questionable affiliations, all easily disproven.

• No verifiable evidence supports Railbus’s claims of a high-tech railbus project in the Middle East.

Overview

Railbus, incorporated in 2021, presents itself as a company raising funds for a high-tech railbus project, primarily targeting the Middle East. It operates through a website (railbus.com) and social media ads, particularly on Facebook, soliciting investments as low as $100 without requiring investor accreditation. The company claims to offer equity crowdfunding opportunities, promising extraordinary returns (up to 200x) for a supposedly low-risk venture. However, investigations reveal no legitimate crowdfunding portal or broker-dealer involvement, and the offering lacks registration with the U.S. Securities and Exchange Commission (SEC), rendering it non-compliant with U.S. securities laws.

Allegations and Concerns

• Fraudulent Crowdfunding Scheme: Railbus is accused of running a fake equity crowdfunding offering, lacking SEC filings or disclosures required for Regulation Crowdfunding (Reg CF) or Regulation A (Reg A) offerings. This suggests the operation is unregistered and illegal.

• Unrealistic Promises: The company advertises a 200x return with “low risk,” a claim flagged as a scam tactic by the SEC’s 2014 guide on unregistered offerings. Such promises are designed to lure unsophisticated investors.

• Fake Executives and Affiliations: Most executives listed on Railbus’s website are unverified or fictitious. The only named individual, Mark Maclaurin, lacks credible confirmation of involvement. Claims of affiliations, such as with the International Association of Public Transport (UITP), are misleading, as membership requires only a small fee.

• Deceptive Marketing: Railbus’s offering page mimics legitimate crowdfunding platforms but omits mandatory disclosures. It uses paid ads disguised as third-party reviews and has created fake Medium accounts to counter scam allegations.

• Silencing Critics: The company reportedly attacks or suppresses negative coverage, further eroding trust.

• No Legitimate Financial Backing: Unlike genuine startups, Railbus has not pursued traditional financing (e.g., bank loans), which is suspicious given its claimed potential.

Customer Feedback

No verifiable customer reviews or investor testimonials are available from credible sources, likely due to the fraudulent nature of the operation. Railbus’s website and marketing materials include purported “third-party reviews,” but these were exposed as undisclosed paid advertisements, which is illegal. Negative feedback is primarily from industry watchdogs and analysts, such as Democratizing.Finance and Hubtas Media, who warn investors to avoid Railbus. For example:

• “Railbus is a massive scam and committing wide-spread fraud. Investors need to beware of this company as you will get scammed and lose money.” – Democratizing.Finance

• “RAILBUS currently has an ongoing raise that is, undoubtedly, a complete scam… just straight up defrauding investors.” – David V. Duccini on LinkedInPositive feedback, if any, appears fabricated or part of Railbus’s efforts to counter criticism, such as its “Legitimacy” page, which lacks credible evidence.

Risk Considerations

• Financial Risk: Investors face a high likelihood of losing their entire investment, as Railbus shows no evidence of legitimate operations or revenue generation. Funds may be misappropriated, similar to other crowdfunding scams.

• Reputational Risk: Associating with Railbus could damage an investor’s or partner’s credibility, especially given the public exposure of its fraudulent activities.

• Legal Risk: Railbus’s unregistered securities offerings violate SEC regulations, potentially exposing investors to legal complications or losses without recourse. The company itself faces potential SEC enforcement actions.

• Operational Risk: The lack of transparency, unverifiable executives, and no clear project progress suggest Railbus is not a functioning business, increasing the risk of total failure.

Business Relations and Associations

• Executives: Most listed executives appear fictitious, with only Mark Maclaurin named but unverified. No credible LinkedIn profiles or professional records support their existence.

• Affiliations: Railbus claims recognition from the UITP, but this is misleading, as membership is open to anyone for a small fee. No evidence supports claims of “recognition in literature.”

• Crowdfunding Platforms: Railbus is not associated with legitimate platforms like StartEngine, Wefunder, or Republic, which require SEC compliance. Its offerings are hosted independently, bypassing regulatory oversight.

• Marketing Channels: The company heavily relies on Facebook ads, targeting non-accredited investors with low entry points ($100) and promises of high returns.

Legal and Financial Concerns

• Lack of SEC Registration: Railbus has not filed any offering statements or exemptions with the SEC, a legal requirement for equity crowdfunding in the U.S. This makes its offerings unregistered and potentially fraudulent.

• No Broker-Dealer or Portal: Legitimate crowdfunding requires a registered broker-dealer or portal, which Railbus lacks, further violating securities laws.

• Grammatical and Legal Errors: The “Share Reservation Agreement” and landing page contain grammatical errors and clunky language, indicating a lack of professionalism and legitimacy.

• Potential SEC Enforcement: While no specific lawsuits or SEC actions against Railbus are documented, its practices align with the SEC’s 2014 red flags for scams, suggesting future regulatory scrutiny is likely.

• Financial Opacity: No financial statements, revenue reports, or project budgets are publicly available, raising concerns about fund misappropriation.

Risk Assessment Table

Expert Opinion

Railbus exhibits all the hallmarks of a sophisticated investment scam, leveraging the growing popularity of equity crowdfunding to exploit unsophisticated investors. Its lack of SEC registration, absence of legitimate affiliations, and unrealistic promises of 200x returns align with the SEC’s warnings about fraudulent unregistered offerings. The company’s attempts to counter criticism through fake reviews and a “Legitimacy” page are transparent and ineffective, further eroding trust.

Pros:

• None identifiable. Any perceived opportunity is overshadowed by overwhelming evidence of fraud.

Cons:

• High risk of financial loss with no recourse due to unregistered status.

• Lack of transparency and unverifiable leadership.

• Deceptive marketing tactics and suppression of criticism indicate bad faith.

Cautionary Advice: Investors should avoid Railbus entirely. Before investing in any crowdfunding opportunity, verify SEC registration through the EDGAR database, confirm the involvement of a registered broker-dealer or portal, and scrutinize claims of high returns. Consult a financial advisor and conduct thorough due diligence using tools like Hubtas or Investor.gov. Report suspected scams to the SEC at www.sec.gov/complaint.

Key Citations

• Democratizing.Finance: “Railbus Is Scamming Hundreds Of Investors Over Several Years Using Fake Equity Crowdfunding Offering”

• Hubtas Media: “Railbus is Scamming Thousands: Fake Equity Crowdfunding Scam is Back”

• David V. Duccini on LinkedIn: Post warning about Railbus’s fraudulent raise

• SEC Investor.gov: “Don’t Fall for an Investment Scam – Investor Alert”

• SEC: “10 Red Flags That an Unregistered Offering May Be a Scam” (2014)