ATM LEASEBACK SCHEMES-- any insight?

[Judge Roy Bean]

How soon could we expect to see Joel and Ed arrested?

Not until after an indictment or warrant is issued.

How do we even know they are still in the States.

If the SEC had presented the court with evidence that they were a flight risk, the order could have included surrender of their passports.

[Arthur Rubin]

I just checked for my friend, and (though perhaps this has been brought up previously), some "Clawback" payments are in fact deductible, at least in some cases.

from http://www.ponzitracker.com/top-ponzi-recoveries/

There are typically no winners in Ponzi schemes. Rather, each scheme leaves behind its own unique trail of pain, devastation, and financial loss. There are those who lost their life savings, as well as those who, despite being fortunate enough to withdraw their initial investment and more, face clawback actions for the fictitious profits that were nothing more than the redistribution of investor funds. The Internal Revenue Service has recognized the dire situation typically befalling a Ponzi scheme victim, allowing the deduction of up to 95% of Ponzi losses - thus implicitly acknowledging that the typical recovery is rarely higher than pennies on the dollar.

That refers to Ponzi losses. They are considered theft losses, and the safe harbor allows you to declare 75-95% of the money as lost before the case is finalized. To the extent they create an NOL (Net Operating Loss, which requires more than merely reducing taxable income to $0), they can be carried back 2 or 3 years to amend those years' returns or carried forward.

As I understand it, clawbacks fall into two categories:
1. If the person was culpable, his losses are in the nature of a fine, and not deductible.
2. If the person was not culpable, the clawbacks fall under the "claim of right" doctrine. If under $3000, it's a current miscellaneous deduction (subject to the 2% floor). If over $3000, it can be taken as a current miscellaneous deduction, not subject to the 2% floor, or as a current-year credit equal to the reduction in tax as if the year the money was reported as if the prior year's return income was to unreport that income. This is not the same as amending the return, as you have to wait until the return for the year of clawback is filed.

A different page at IRS.gov reports that. I'll edit in the actual page, when I have a chance.

[Jroger]

How do you think one should handle the depreciation of the machines taken on previous years taxes?

[grimreaper]

How do you think one should handle the depreciation of the machines taken on previous years taxes?

I was thinking about that too. Bottom line, you're going to have consult a CPA or tax attorney on all of this, should you get a clawback.

[Judge Roy Bean]

How do you think one should handle the depreciation of the machines taken on previous years taxes?

Since there were really so few machines in existence and some were purportedly "sold" to more than one investor, the question may be whether or not there was an asset that was depreciating.

Again, this is the realm of your personal financial, tax and legal advisor(s).

[notorial dissent]

Again, as JRB has said, your are probably going to need either a tax lawyer or good CPA, or both, depending on your financial situation, and what you've done with your taxes the last few years.

[Lost Income]

I've tried contacting the SEC at the phone number and e-mail address, with no success. Until we can get some hard info or direction from the SEC, everything is speculation and CPA decisions are guesswork.

[grimreaper]

I've tried contacting the SEC at the phone number and e-mail address, with no success. Until we can get some hard info or direction from the SEC, everything is speculation and CPA decisions are guesswork.

The people I know, who are net winners (vulnerable to clawback), are simply going to WAIT FOR THE RECEIVER TO CONTACT THEM. That's what I would recommend, since it's not up to you to *volunteer* anything! Now, if you're a NET LOSER, if you're not contacted by the end of the year, I would then contact the receiver. The receiver contact was given here already and there is also a web site that WEBHICK set up that has contact information as well.

[Lost Income]

I'm net-looser. I've tried contacting the Receiver per info listed in this sight and listed in the following letter I received from the SEC, so to gather info for discussing with CPA, but no reply and no way to discuss with an SEC human yet. Hopefully will be able to discuss with an SEC human before tax time this year.

" Thank you for contacting the SEC regarding your investment with Nationwide Automated Systems, Inc. (“NASI”), and thank you for your patience. On September 17, 2014, the SEC filed a case against NASI, Joel Gillis, and Edward Wishner. Our complaint alleged that they had been running a Ponzi scheme, using mostly new investor money, as opposed to ATM revenues, to pay investor returns. We also alleged that investors did not actually own many of the machines they believed they had purchased. We sought, among other things, an asset freeze over NASI, Gillis and Wishner, and the appointment of a receiver over NASI. Our filing was initially made under seal, and we were not able to share the information publicly. On September 30, 2014, the Court granted all of the relief we requested. Copies of our complaint and the Court’s Order are attached to this email for your reference.

The Court-appointed receiver in this matter is William Hoffman. If you have questions concerning the status of your investment or NASI’s operations, please contact Mr. Hoffman, who is currently in control of NASI. Information about the receivership can be found at http://www.nasi-nationwideatm.com. The receiver can be contacted at 858.242.1161 or by e-mail, at receiver@nasi-receivership.com. If you have additional questions regarding the SEC’s case, or would like to provide us with information or documents you have not already sent, please email us at LA4407@sec.gov. A copy of the SEC’s Form 1662, which outlines some of our policies and procedures, is attached for your reference."

[Tednewsom]

How soon could we expect to see Joel and Ed arrested?

I should expect potential imprisonment is being used as a bargaining chip. "Spend the rest of your life in jail, or cooperate and help us pay back what we can to your victims, boys. Your call."

[Lost Income]

Yeah lets scam them into helping with the thought of not going to prison, and then when done put them in prison anyway. Be careful bending over to pick up the soap boys!

[grimreaper]

How soon could we expect to see Joel and Ed arrested?

I should expect potential imprisonment is being used as a bargaining chip. "Spend the rest of your life in jail, or cooperate and help us pay back what we can to your victims, boys. Your call."

There's no doubt in my mind they're going to get substantial jail time regardless of what they do. They have ruined hundreds if not thousands of lives.

[grimreaper]

I'm net-looser. I've tried contacting the Receiver per info listed in this sight and listed in the following letter I received from the SEC, so to gather info for discussing with CPA, but no reply and no way to discuss with an SEC human yet. Hopefully will be able to discuss with an SEC human before tax time this year.

You'll be dealing with the receiver, who is working for the SEC. I'm sure they'll be contacting people and provide a questionnaire. Keep monitoring their NASI receivership website.

[Judge Roy Bean]

I'm net-looser. I've tried contacting the Receiver per info listed in this sight and listed in the following letter I received from the SEC, so to gather info for discussing with CPA, but no reply and no way to discuss with an SEC human yet. Hopefully will be able to discuss with an SEC human before tax time this year. ...

Some of us here are having to repeat ourselves simply because the volume of posts means newcomers and non-registered visitors who don't read the whole thread may find themselves somewhat in the dark if they start at the latest page.

Please keep in mind that the receiver cannot give you legal or tax advice - nor can the SEC. They can, of course, cite the law and regulations but they do not represent you in a legal sense. It will not be much of a "discussion." It will be more like being deposed. For some on the promotional/advocate end of the spectrum of participation, it may even seem more like an interrogation.

Frankly, you may see the investigator's eyes sort-of glaze over when they hear the phrase, "I had no idea ..." for the twenty-thousandth time.

[Lost Income]

I agree. However, we need confirmation from the SEC for the direction that NAS is headed, to advise a CPA. We can't just tell a CPA what we think has happened, is happening or may happen.

[notorial dissent]

At the risk of repeating myself à la JRB.

This is a complicated little dance for which only the first steps have been taken, the music hasn't even really started yet.

The first steps were taken by the SEC completely out of the view of the pubic eye and with the initial complaint, the preliminary investigation(s), the informational subpoenas to NASI and eventually culminated in filing their petition with the court. The court reviewed at it and eventually issued the TRO that was the first public act. At this point nothing much, at least as far as the participants of this french farce are concerned is going to happen until the show cause hearing is held and an order is generated. Now I will go out on a limb here and make a prediction, the SEC will get their order and the TRO will transmorgrificate in to a Preliminary injunction, at which point there will be a lot more investigation and they'll probably start calling/contacting the "investors" at that point. A lot is going to depend on what they find and how hard it is to piece together when they start digging, but at some point they will have to go back in to court and convert the Preliminary injunction in to a permanent one, and I will be honest and say I'm not sure of the actual point in time when the receivership will be created, but it will happen somewhere in there and will have to happen before the receiver can really do anything.

Long story short, nothing much on the "investors" side is going to happen until all the hearings and court wranglings are done, and a lot of that will depend on how NASI and the "boys" deal with their impending doom. They could attempt to drag this out a while.

Basically nothing on the "investors" side is going to happen until all the paperwork is done and that could still take a fair amount of time. So practice some patience and get your papers in order. To put not too fine a point on it, there isn't much else you can do at this point.

These things do not EVER move quickly, so don't expect this one to be any different.

[itzallgone]

Aren't they in their late 60's or early 70's? The jail time they are going to get means they will pretty much die in prison.

[webhick]

Aren't they in their late 60's or early 70's? The jail time they are going to get means they will pretty much die in prison.

I guess they should have thought about that before they decided to rob Peter to pay Paul for a living.

[itzallgone]

Aren't they in their late 60's or early 70's? The jail time they are going to get means they will pretty much die in prison.

I guess they should have thought about that before they decided to rob Peter to pay Paul for a living.

Yep. Then again, they lived their last 20 years in the good life. It is over. I don't feel bad one bit for them or their family, who definitely knew what was going on.

[LaVidaRoja]

Hey - think of what they're facing as a cheap form of Long-Term Care Insurance. Sure, they can't be taken out on excursions by the family, but they'll have 3 hots and a cot with basic medical for life.