Would have been suspicious to me from the beginning:

-a guy coming from an unknown company, with millons of
claimed assets but not public appearence (is there further information
available in the Swiss trade register?)

-wanting to contract build a full MMO without any previous
experience in the gaming industry. And also approaching/quickly contracting a
company that never had developed a full MMO in that scale.

-paying in cash (now this is about as unprofessional as
it can get. Only drug dealers and backalley second hand car dealers pay cash in these amounts.
Whoever pais cash wants to hide something, or tries to impress the other with a simple psycological trick)

-doing "important sounding" phonecalls with "prices and trade ministers". Thats a cheap phsycological trick too.

-having no other contact persons involved in the project.
Normally the "boss" would assign one of his young employees
as contact person, who is a constant contact-partner for
the gamedesign details.
Sending detail-design document discussions back and forth.
Whoever has to manage a million dollar company is
not doing detail stuff himself.


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Anyhow, its good that you stopped the development soon enough.
I suppose that other companies would have continued working
even with delayed payments, just in the hope that it works.

Did he ask for assets/sourcecode? Else I really wonder
what his intentions where for that whole projects.