ATM LEASEBACK SCHEMES-- any insight?

Stock and Bond Fraud, including Boiler Rooms / Pump and Dump Schemes, Mutual Fund & Hedge Fund Fraud, FOREX scams, plus Churning, Private Placements, Venture and Bridge Funding, IPOs, Viaticals Fraud, HYIP and Prime Bank scams, MTNs, Historical Notes, Recovery Schemes, etc. Includes the Jim Norman Project and the Michael Dotson Project and similar HYIP scams.
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Re: ATM LEASEBACK SCHEMES-- any insight?

Post by obadiah »

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Re: ATM LEASEBACK SCHEMES-- any insight?

Post by notorial dissent »

Ted, I will answer your points first.

The reason Grimy is getting “gang(ed) up on” as you put it, is his steadfast resistance to listening to what others have said, others who incidentally know galaxies more about this particular subject than he does or ever will, and repeatedly going off on the same, and wrong, tangent. That and his apparent inability to read and comprehend plain English. It is annoying, tiresome, and counter productive. And yes, that is exactly what he is saying, is that he expects the Receiver to go after everyone involved in this, and it simply isn’t going to happen. Simple economics says it won’t, experience, says it won’t, and more importantly the judge won’t say it will. He refuses to recognize that the reality is that the majority, in fact most likely the greater majority, of the “net winners” will not be paying back a dime. There will most likely be some recovery, but in the final analysis it won’t amount to much.

I’m sorry you think reality is bleak, but that is your problem. No one has said there will be NO recoveries, just that there won’t be a lot, and certainly not in the realm to matter more than a few cents on the dollar. Further no one is claiming they had some Machiavellian plans for eluding pay back, simply that the economy and reality MAY well preclude any kind of meaningful recovery.

Again, either you, or someone, is mischaracterizing the “investors” in this charade, no one here has characterized them as anything but naifs, with the possible exception of Grimy. The “boys” weren’t looking for seasoned competent investors since they would most likely have seen through the charade. They were looking for people who thought they’d found an undiscovered gold mind and were happy with what they were getting out of it and didn’t have the acumen to look any further, and for the most part, as far as I can see, that is exactly what they got. Some of them obviously wised up for one reason or another, but that seems to have been the exception rather than the rule.

The SEC and courts did/do what they are doing because it is the law and it is their job. It seems to have eluded both you and Grimy, that in the majority of these cases, there is not only no recovery, there is never any payout of any kind, the Receiver has to step in to close things down and shut the lights off and close the doors on a bad memory. If there is a possibility of getting funds back that is cost effective they will try, but there is no guarantee, and in most cases it isn’t. To put it simply, the net losers in this likelihood of being made whole is exactly 0%. Until I see an actual audit, based on what was there at the time of seizure I’m still putting the recovery figure at pennies on the dollar.

Now on to Grimmy
grimreaper wrote:So we're now operating under the assumption that MOST profits may have been consumed and are no longer up for grabs...up in smoke :roll: . My question is then..are ANY ASSETS then fair game?..as TED suggests? You can't *ear mark* where profits go! It will be assumed that anything owned by the investor is fair game... how or when they were obtained notwithstanding.
Oh..but of course>>>

So you can pay attention, now if you’d just let some of it sink in, which you obviously haven’t. Whatever the “profits” the “net winners” may or may not have gotten would have gone back in to their general net. The thing you don’t seem to want to get is that not only have they probably spent, lost, reinvested, or just gone through the money they got from NASI, but whatever else they had as well. We had this little thing called the downturn, you might have noticed, although I’m not betting on that, and may very well have lost most of what they had before hand. They may well have assets, all of which are mortgaged or liened to the hilt, which means you get nada. Oh, wait, you’ve had this explained to you before, repeatedly, so this is another of those little items you seem to not absorb. Just because they have assets, does not mean they are reachable by a judgment for a variety of reasons. That is what we’re talking about here. I know one of the recurring stories I keep hearing about the investors is that with the loss of the income from NASI they are suddenly in a world of hurt. Why do you not think that the same economic conditions apply to the other investors that you consider winners? The type of investor who would invest in this does not seem to be the type who has large cash surpluses or other major sources of income and weren’t seasoned investors, so why do you insist on putting the “losers” in one category, and the “winners” in another? Unless of course you know something the rest of us don’t.

My suspicion, is that there are probably an handful of “investors” who are/were “net winners” and really knew what they were doing and what they were getting, and probably still have assets left that MIGHT be reachable. Statistics and experience say this is likely. However, a lot will depend on what the court decided, and what the Receiver determines is financially reasonable, and cost effective. Those are guesses I am not willing to second guess. Insiders are probably/usually better low hanging fruit, but again it is going to depend on whether they have anything left to go after, and the same caveats apply here as they do to the investors. I always hate raw figures because they can be too easily distorted and misread.
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Re: ATM LEASEBACK SCHEMES-- any insight?

Post by grimreaper »

To put it simply, the net losers in this likelihood of being made whole is exactly 0%. Until I see an actual audit, based on what was there at the time of seizure I’m still putting the recovery figure at pennies on the dollar.
Petters Case
As of June 2014>>
http://www.ponzitracker.com/main/2014/6 ... tiona.html

To date, Kelley has recovered approximately $110 million for the benefit of victims, while related bankruptcy and receivership proceedings have pulled in another $300 million. Considering that total losses from the scheme are estimated at approximately $2 billion after factoring in payments made to investors, the $410 million recovered to date represents approximately 20% of total losses. By Kelley's own estimate, potential recoveries through the use of clawback lawsuits could be more than $500 million - including more than $323 million sought from hedge funds Epsilon Investment Management and Arrowhead Capital Management.


Update:
http://www.ponzitracker.com/main/2014/1 ... n-til.html

Kelley reached the settlement with the Hedge Funds after a series of mediation hearings before a former Judge. The settlement calls for the entry of a judgment in an amount of $322 million that represent an agreed-to total amount of "false profits" realized by the Hedge Funds. However, under the terms of the settlement, Kelley agreed that he will refrain from initiating any efforts to collect on the judgment for six years, or the end of 2020. This condition arises from the Hedge Funds' delicate financial status, and will allow the Hedge Funds to manage the investments over the next six years with the goal of completely satisfying the judgment when due. In return for waiting to collect on the judgment, Kelley will receive a security interest in the entirety of the Hedge Funds' remaining assets.

The settlement must ultimately be approved by the U.S. Bankruptcy Judge overseeing Kelley's efforts. A hearing has been scheduled on the settlement for October 28.

To date, Kelley has recovered approximately $110 million to be eventually distributed to victims. Recently, Kelley received court approval to file a series of clawback suits targeting international investors that collectively reaped more than $100 million in false profits. The Minneapolis Star Tribune has estimated that victims can expect a total recovery ranging from 17% to 25% of their approved loss.

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Re: ATM LEASEBACK SCHEMES-- any insight?

Post by NYGman »

I don't believe the boys were suffisticated enough to have Hedge Fund clients or Banks investing with deep pockets to pay back ill gotten gains. Grimmy, you know people who were both winners and loosers. I feel for those loosers, but beliving they will get more than pennies on the dollar is just false hope. It isn't going to happen. There are no deep pockets here, just a bunch of small time individual investors who were conned. I believe your closeness to those net loosers is clouding your judgement. You are seeing what you want to see, and turning a deaf ear to those who are telling it like it is.

It is great that you believe there will be a high rate of recovery here, and I wish it were true, but at teh end of the day, it will be pennies on the dollar, eventually. I would not hold my breath, or hope for a large recovery, it is just not going to happen. Hope all you want, believe what you will, ultimatly time will be the judge on who was right. While I would love you to be correct, I just do not see it.
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Re: ATM LEASEBACK SCHEMES-- any insight?

Post by Tednewsom »

NYGman wrote:There are no deep pockets here, just a bunch of small time individual investors who were conned.
Well, I know of at least one net winner in this affair where that's categorically untrue. "Conned," yes, "small time," scarcely. A woman in Newport Beach with more money than sense, who pressured her bookkeeper into investing, because it was such a good deal. The bookkeeper bought a couple machines, then immediately bailed when she did some after the fact due diligence (and actually got her money back.) The high-rolling widder-woman -- who inherited her wealth from her dead hubby-- is still sitting fat and sassy, even after the loss of several grand a month from fantasy ATMs. The hit was a pisser for her, but in general it didn't hurt a bit. The bookkeeper would have been devastated.

Bear in mind: Joel Gillis, prime mover in this affair, did not target low-end suckers. There's no percentage in that. He did seminars, attended conferences, hung out at country clubs and yacht clubs. You work just as hard to sell ten machines to a well-heeled sucker as you do convincing a working-class stiff to part with $19,500.
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Re: ATM LEASEBACK SCHEMES-- any insight?

Post by Tednewsom »

Tednewsom wrote:
NYGman wrote:There are no deep pockets here, just a bunch of small time individual investors who were conned.
Well, I know of at least one net winner in this affair where that's categorically untrue. "Conned," yes, "small time," scarcely. A woman in Newport Beach with more money than sense, who pressured her bookkeeper into investing, because it was such a good deal. The lady owned dozens of them, and had, for years (undoubtedly long enough to cover the nut and put her into the "new winner" category.) The bookkeeper bought a couple machines, then immediately bailed when she did some after the fact due diligence (and actually got her money back.) The high-rolling widder-woman -- who inherited her wealth from her dead hubby-- is still sitting fat and sassy, even after the loss of several grand a month from fantasy ATMs. The hit was a pisser for her, but in general it didn't hurt a bit. The bookkeeper would have been devastated.

Bear in mind: Joel Gillis, prime mover in this affair, did not target low-end suckers. There's no percentage in that. He did seminars, attended conferences, hung out at country clubs and yacht clubs. You work just as hard to sell ten machines to a well-heeled sucker as you do convincing a working-class stiff to part with $19,500.
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Re: ATM LEASEBACK SCHEMES-- any insight?

Post by Tednewsom »

redundant post
Last edited by Tednewsom on Tue Apr 21, 2015 5:48 am, edited 1 time in total.
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Re: ATM LEASEBACK SCHEMES-- any insight?

Post by grimreaper »

The *average* investor here has at least 10 contracts (probably closer to 15)...over 100K invested (2000+ investors and 30000 contracts). I don't see these people as those with low/zero net worth. Five of the Seven investors I'm familiar with had over 10 machines...some over 20 and 30. True, some will be wiped out as indicated by a poster here who was retired and put ALL his money in the scam. We will soon see how people respond to the demand letters, since the receiver will continue to issue reports on an on going basis. I personally should know how some will respond and will report here if/when I find out.
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Re: ATM LEASEBACK SCHEMES-- any insight?

Post by NYGman »

Still small change compared to Hedge fund investors. Granted, there will be a few wealthy investors, but investing in 1,2,3 even 10 machines is small change compared to hedge fund, private equity, or real estate investors. These investors have millions in assets and earn millions in income. This is chump change for them.

The minimum buy in here was small, and this isn't something you could market to the more savvy qualifying investor or family office who should see the warning signs. Minimum fund investments can start a 250-500k or more (granted a few will allow for small investments, but that typically is limited to friends and family). This was market to the average joe who may have squirreled away a nice chunk of change over their lifetime but isn't really in the investment business. This isn't a traditional investment, I doubt they had a designated auditor or issued financial statements.

All the family offices and elligible inveators I deal with would run from this type of thing. Those who invest in hedge funds typically have financial advisors, accounts and lawyers reviewing their deals and agreements. Sure you can fake some of the details like Madoff did, but now these investors are asking for independent custodians to validate and value the assets independently from the fund manager.

My point was, the hedge funds that were net winners have deep pockets, these ATM investors are not in the same class. Sure some may have assets but who knows if they were winners or if they have any assets left. I seem to recall people posting about this being their retirement income, or they mortgaged their house to invest. You will likely not be able to get blood from those stones.

My point was that I just don't believe there is any substantial funds out there, like there was in the example you provided, to recover more than pennies on the dollar.

I hope I am wrong.
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Re: ATM LEASEBACK SCHEMES-- any insight?

Post by grimreaper »

My point was that I just don't believe there is any substantial funds out there, like there was in the example you provided, to recover more than pennies on the dollar.
Well, the *average* net winner probably has 100K in profits that are subject to a clawback. The top 20 have an average of $850K in profits.>>>>>

https://nasivictims.wordpress.com/
"The largest 20 investors profited $17 million in the seven year period. This is a preliminary number and is subject to change. That’s $850k average per investor, for those playing the home game."

So the questions are>>>>1) Do they have that amount in recoverable assets 2)Will the receiver be capable of recovering them and how much? In my humble opinion, the answer to #1 is YES with an UNKNOWN # of investors and YES again to #2, but again unknown as far as #of investors and amounts. Some here..like yourself, see virtually NOTHING recoverable when all is said and done. Time will tell.
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Re: ATM LEASEBACK SCHEMES-- any insight?

Post by Judge Roy Bean »

grimreaper wrote:
My point was that I just don't believe there is any substantial funds out there, like there was in the example you provided, to recover more than pennies on the dollar.
Well, the ... [ alleged ] *average* net winner [ might have ] probably has 100K in [ alleged ] profits that are [ might be ] subject to a clawback. The top 20 [ may ] have an average of $850K in profits.>>>>>

https://nasivictims.wordpress.com/
"The largest 20 investors [ may have ] profited [ as much as ] $17 million in the seven year period. This is a preliminary number and is subject to change. That’s $850k average per investor, for those playing the home game."

So the questions are>>>>1) Do they have that amount in recoverable assets
The answer is that it may be costly for anyone to be able to actually prove they do.
grimreaper wrote:2)Will the receiver be capable of recovering them ...
The answer is, based on historical experience, as a percentage, unlikely - see answer to 1.
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Re: ATM LEASEBACK SCHEMES-- any insight?

Post by grimreaper »

I have a unique perspective in this situation that 99.9% don't have...TED seems to be another. I have contact with FOUR investors directly and another three indirectly. As stated earlier, I'll try to provide those here with information as it becomes available. If you decide to characterize my input as an aberration...so be it.
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Re: ATM LEASEBACK SCHEMES-- any insight?

Post by Tednewsom »

I see everybody's input and opinions as valuable to understand the whole enchilada, and how the whole thing may shake down.

NYGman -- you're quite correct, most sensible investors would defer to their money managers and run like hell. But even investors with substantial funds are often not that hip themselves. That's why Gillis didn't deal with professionals (in general), he dealt directly with the principals.

As for bigger investors-- early on in this thread, "someyuppy" bragged of his own net worth (allegedly in 7 figures) and that of his good, experienced elder pal, who was worth even more, and the older of the two (allegedly) owned a couple dozen fantasy machines. It's possible he was lying, but I think not. Deluded as he my have been, he was serious and intelligent, based on his posts. (I wonder if I'll get a nice "Sorry I insulted you, you were right all along" note from him one day?)

Plus, in the last year of NASI, they sold a craplod of (worthless) ATM shares to a couple guys to the tune of $12 or $13 million. Yes, a lot of that no doubt was paid out to previous suckers, but it gives you perspective on the net worth of Gillis' preferred suckers, as opposed to his underling salespeople, who were selling one or two at a time (albeit repeatedly, and to multiple customers.)
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Re: ATM LEASEBACK SCHEMES-- any insight?

Post by Gregg »

So the top investors may have between them $17 million in winnings. That's still less than 10% of the $123 million figure I seem to recall being mentioned as the take. Now you have to reduce that by at least the 30% discount he offered them to open negotiations, down to less than $13 million which is not far from 5% recovery. I still think this is being optimistic, but I'll stipulate the point. I would also not be in the least surprised to find that these top investors make up the bulk of people the receiver will find it cost effective to pursue.
You seem to think there are half winners, half losers but the deities of ponzi scheme mathematics (a corollary of Bistromathics*) dictates otherwise. Usually the breakdown is at least 80-20 and often 90-10, and if there are 200-400 net winners, most of these will not be up significant amounts. Exponential liability growth, its just a fact of any ponzi scheme and the longer it runs, the steeper the curve gets.

Take out the costs of the receivership and we have

ding
ding
ding

5 cents on the dollar!

Without any "Ifs..." of course.

* Bistromathics itself is simply a revolutionary new way of understanding the behaviour of numbers. Just as Albert Einstein's general relativity theory observed that space was not an absolute but depended on the observer's movement in time, and that time was not an absolute, but depended on the observer's movement in space, so it is now realized that numbers are not absolute, but depend on the observer's movement in restaurants. H2G2 reference
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Re: ATM LEASEBACK SCHEMES-- any insight?

Post by notorial dissent »

I think, as I've said previously, repeatedly, I'll wait until an actual audit and statement of claim is produced by the Receiver. Lots of things can and do change between a preliminary audit and a final one, which he'll have to present to the court before he can do anything else. I don't like raw number for previously stated reasons and I don't see much point in speculating off of them. They may be honest numbers, but I'm still thinking guestimate, and until I see some real figures, speculating is pointless, other than to point out what history and experience have shown, which isn't pretty.

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Re: ATM LEASEBACK SCHEMES-- any insight?

Post by Tednewsom »

I think just about everybody understands the cookie jar has been emptied, and no one is arguing it's full. And no one is arguing that people didn't eat cookies.

If I'm right-- and for simple and logical reasons, I think I am -- there is another factor which the receivers and the SEC have overlooked. That is Joel Gillis' repeated statements that he & Wishner were so confident in their business that for every investment from a sucker, they bought one machine for the customer and a second one for themselves. Considering the disparity between the $19,500 price and the $12,000 price, I'd expect the higher price meant three machines (one for the customer, two for them) -- or at least "shares" since there were no physical ATMS and thus no overhead, not in the purchase of the phantom ATM, not the fictional upkeep over the years.

Using that in his pitch-- which he did, repeatedly, directly with customers as well as in interviews -- was an unnecessary filigree. Yes, it might inspire a touch more confidence in the scheme, but it was not germane to the sale, and in fact could work against the sucker's confidence. ("Hey! Waiddaminnut! You say you're gonna use MY money so you can buy your own machine? The hell you are!")

It would be easier, and far less objectionable to potential investors (even the thick ones), to simply say the remainder of the $19K/$12K purchase price after buying the machine was a small profit for the company, and the continued upkeep fee. It's simple, believable, and would make the company look sensible but not greedy or crooked.

I've pointed out before, that would make Gillis and Wishner "customers" who received fifty cents on every dollar scammed-- continuously, for as long as the scam ran, seventeen years.

It's hardly some complex accounting trick or unfathomable shell game. Even a dolt like Wishner could understand it. A $12,000 payment in from a new chump, six thousand out to customers in little dribs, six thousand to us split two ways. A $333 monthly "dividend" to an old chump for their "machine," and $333 to us for our "machine."

If-- that word again -- if Gillis' pitch has validity (if not in the way it was phrased), then factor in the 32,000 ATM contracts the outfit sold then multiply. That is a lot of dough, and it did not all go to pay off previous suckers. :shock:
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Re: ATM LEASEBACK SCHEMES-- any insight?

Post by Gregg »

If I'm right-- and for simple and logical reasons, I think I am -- there is another factor which the receivers and the SEC have overlooked. That is Joel Gillis' repeated statements that he & Wishner were so confident in their business that for every investment from a sucker, they bought one machine for the customer and a second one for themselves. Considering the disparity between the $19,500 price and the $12,000 price, I'd expect the higher price meant three machines (one for the customer, two for them) -- or at least "shares" since there were no physical ATMS and thus no overhead, not in the purchase of the phantom ATM, not the fictional upkeep over the years.
You're getting lost on a useless diversion. It doesn't matter what they said they did with the money, they didn't take in a phantom payment from somewhere when they guy dropped his $12,000 or $19,000 or whatever he paid. They got what he paid, and what they did with the money is another matter again. No more money came in just because they said something about "you buy one and we buy another for ourselves. Maybe they did it because they thought someone might find out that a machine could be had for a lot less than they were selling them for, maybe they were just using it to talk up how profitable they were, doesn't matter. Thieves often do and say things that make no sense, and looking back victims many times have had to ask themselves how they believed some of the things they were told.
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Re: ATM LEASEBACK SCHEMES-- any insight?

Post by notorial dissent »

In what realm of reality would anyone believe anything that Gillis and Wishner said? There is nothing to indicate that they every told the truth about much of anything. As far as I can determine, not one thing they claimed or said has been found to be true, so why start building fantasies on something they claimed. They were/are serial liars and conmen, that's what they do lie and con.
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Re: ATM LEASEBACK SCHEMES-- any insight?

Post by grimreaper »

Gregg wrote:So the top investors may have between them $17 million in winnings. That's still less than 10% of the $123 million figure I seem to recall being mentioned as the take. Now you have to reduce that by at least the 30% discount he offered them to open negotiations, down to less than $13 million which is not far from 5% recovery. I still think this is being optimistic, but I'll stipulate the point. I would also not be in the least surprised to find that these top investors make up the bulk of people the receiver will find it cost effective to pursue.
You seem to think there are half winners, half losers but the deities of ponzi scheme mathematics (a corollary of Bistromathics*) dictates otherwise. Usually the breakdown is at least 80-20 and often 90-10, and if there are 200-400 net winners, most of these will not be up significant amounts. Exponential liability growth, its just a fact of any ponzi scheme and the longer it runs, the steeper the curve gets.
Since we know 2000 checks were sent out at the end, we have 2000 investors total...less a hand few that may have cashed out prior. Since the melt down took place at that point, the # of net winners has to *approximate* the # losers. It certainly couldn't be that far off. There were 30K contracts and 2K investors...so average investor had around 15 contracts. This jives with the pole that *WEBHICK*has on his website. It's a small pole of 10% of investors, but gives you an indication.The top 20 probably had an average of 50 contracts each, but that's *only* around 10-20% of the TOTAL potential net winners>>>> 50X 20=1000 contracts TOP 20 and even you take 30% of the 30000 TOTAL contracts as *winners*, that's 9000 contracts that are winners. The TOP 20 are only 10% in that case. I would be shocked if the TOP 20 comprised more than 30% of the net winners. I have estimated NET TOTAL profits are 100M..100K ave for 1000 contracts, so top 20 of 17M would be 17%. Just my take..yes..just an OPINION, but I'm confident it's close to what we may see if that info is ever provided.
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Re: ATM LEASEBACK SCHEMES-- any insight?

Post by Arthur Rubin »

In a "traditional" Ponzi scheme, there are a lot more net losers than net winners. Now, this one may be different, as there seem not to be any records kept, but that seems the way to bet.
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