ATM LEASEBACK SCHEMES-- any insight?

[grimreaper]

It's like they're trying to continue forward as though the SEC hasn't stepped in yet.

What's funny is that the SEC applied for the TRO back on 9/16 while the IB was filed on 9/19. I believe it was sealed until the 30th, so it's not like the IB creditors could have known at the time. But now it's public and there's a portion of the restraining order with wording barring victims from doing things like filing an IB. With the IB already started before the SEC stuff was unsealed, I imagine there's leeway, but I feel like this additional lodgment may be crossing a line.

I have a feeling the BK people were in the dark on Sept 30 SEC ruling. No inter communication between the 2 parties. There's little doubt in my mind SEC Receiver will prevail. I understand NASI has a hearing in a couple weeks to show why PERMANENT Restraining Order (SEC) shouldn't go forward.

[Nationwideinvestor]

These are some things to consider:
1. There are both advantages and disadvantages of having the SEC, the Bankruptcy court or both involved. The bankruptcy court has not yet acted. The optimal situation might be a cooperative effort by both. It is still unclear if the SEC will be the only acting party.
2. The source of assets to capture will be
a The assets of the company and defendants: under 250 ATM machines, some cash, all the assets of the plaintiffs - a total thought to be very modest. A calculation of what might be hidden will be undertaken. This category is not likely to be a source of significant returns as the investors were paid back the majority of the funds.
b. "Clawback" - not an easy task to implement. The receiver or trustee has broad powers to decide how to go about this. This is expected to take many years and substantial legal effort.
c. The banks, both the recent and the previous- The banks have a regulatory responsibility to fulfill. This is the most likely an area of great interest and it is critical that the receiver and or trustee pursue this for the purposes of reimbursement to investors, not just fines.

Whether independent groups are needed to represent their voice to the agencies and or banks remains to be seen, but some are organizing now just as the three who filed the initial action. This group did so after advise that NASI was a PONZI scheme, after calls from the FBI at their own cost for legal fees needed to file. Involuntary bankruptcy was recommended as the best approach and for the interest of all who did not understand the depth of fraud and criminal activity. They were no assurances at the time of bankruptcy filing that the SEC could or would act in a timely fashion. Fortunately the SEC acted briskly and decisively and their investigative work (together with the FBI) is most impressive. Again stakeholders may have different advantages and disadvantages with the SEC or Bankruptcy courts.

For interest see below. The point here is that it will be important to get the funds to the investor, not just as fines to the SEC. It is not clear if an independent group will be needed to do so. The possible need for an independent group is the motivate for some who are already getting organized independent of government agencies. (Having said that be most cautious when contacting such groups.) In the case described below the involuntary bankruptcy (which is classically recommended for PONZI schemes) worked to the advantage of all.

Source WSJ Sept. 23, 2013
TD Bank Fined $52.5 Million for Role in Ponzi Scheme
Regulators Say Bank Failed to Raise Red Flag Over Lawyer's Fraud
The Securities and Exchange Commission, Office of the Comptroller of the Currency and the Treasury Department's Financial Crimes Enforcement Network announced the civil charges and fines on Monday. Mr. Rothstein has already pleaded guilty to bilking investors out of more than $1.2 billion and is serving a 50-year prison sentence. The SEC alleged that TD Bank and a former official, Frank Spinosa, defrauded investors by creating misleading documents and making false statements about the accounts that Mr. Rothstein, the founder of a South Florida law firm, held at the bank. The fines come amid a broad push by federal regulators to crack down on what they see as shortcomings in banks' efforts to combat money laundering and other illegal activities. Some regulators have admitted that federal authorities didn't do enough to scrutinize banks during and in the immediate aftermath of the financial crisis.
Mr. Spinosa faces financial penalties under the SEC's complaint, filed in the U.S. District Court for the Southern District of Florida. Mr. Spinosa's attorney, Samuel Rabin, said Monday that his client didn't know about Mr. Rothstein's fraud and never purposefully acted to further that fraud. Mr. Rabin added that Mr. Spinosa was given the opportunity to settle the SEC complaint but declined because he "is a victim in this massive fraud." TD Bank didn't admit any wrongdoing under the settlement. TD Bank spokeswoman Rebecca Acevedo said the bank is pleased to "put the Rothstein matter behind us. TD works very closely with our regulators to ensure that it complies with all applicable laws and regulations."The OCC said in a legal filing the Canadian bank, with about 1,300 branches in the U.S., also failed to alert the government about suspicious activities in the accounts tied to the Ponzi scheme. For more than a year, bank officials ignored suspicious activities that had triggered the bank's anti-money-laundering alert system, according to the filing. Officials at the bank incorrectly decided the questionable activities weren't suspicious and didn't file appropriate reports with the government, the agency said. The failures to file reports about suspicious activities "were significant and egregious for a number of reasons, including the number of alerts generated by these accounts and the volume and velocity of funds that flowed through them," the OCC said.
According to the SEC complaint, Mr. Spinosa told investors that TD Bank restricted Mr. Rothstein's ability to move the funds, when it didn't, and that certain accounts held millions of dollars when their balances were actually less than $100 or zero. "Financial institutions are key gatekeepers in the transactions, and investments they facilitate and will be held to a high standard of accountability when their officers enable fraud," Andrew J. Ceresney, co-director of the SEC's enforcement division, said. "TD Bank through a regional vice president produced false documents on bank letterhead and told outright lies to investors, failing in its gatekeeper role." TD Bank has previously agreed to pay more than $72 million in a separate settlement reached in the bankruptcy case of Mr. Rothstein's now-defunct law firm, Rothstein Rosenfeldt Adler. Creditors pushed the Florida law firm into involuntary bankruptcy protection in November 2009, weeks before Mr. Rothstein's arrest. Creditors received their first payment last month.

[grimreaper]

b. "Clawback" - not an easy task to implement. The receiver or trustee has broad powers to decide how to go about this. This is expected to take many years and substantial legal effort

Incorrect. Especially in this case where it will be relatively easy to parse out net winners. Any legal attempts to fight the clawback will fail in 99% of the cases. There is already substantial case law to justify clawback .Will it take years? I would estimate the first attempt to retrieve funds will commence within a year. Those who wish to fight it could buy time, but will ultimately lose in most cases. This is essentially a "pure play" ponzi with a simplistic structure, as opposed to a *MADOFF* nightmare.

c. The banks, both the recent and the previous- The banks have a regulatory responsibility to fulfill. This is the most likely an area of great interest and it is critical that the receiver and or trustee pursue this for the purposes of reimbursement to investors, not just fines.

Fallow ground here..good luck.

[notorial dissent]

Unless things have changed dramatically since the last time I looked at a mess like this, the SEC receivership supersedes, and effectively nullifies, the bankruptcy. In fact, I thought the TRO put a stay on it as it was, and nothing they can do about it except go to court and fight the show cause, and I don't think I ever remember anyone EVER succeeding on that one, so I am not sure what they are trying to accomplish.

[grimreaper]

Unless things have changed dramatically since the last time I looked at a mess like this, the SEC receivership supersedes, and effectively nullifies, the bankruptcy. In fact, I thought the TRO put a stay on it as it was, and nothing they can do about it except go to court and fight the show cause, and I don't think I ever remember anyone EVER succeeding on that one, so I am not sure what they are trying to accomplish.

Not sure, but both parties seem to have been in court *at the same point in time*. We are witnessing a weird intersection of events and, like I said, neither party was aware of what the other was doing? No matter, I agree SEC will trump the BK..without question. However, that doesn't preclude a cooperative effort either.

[notorial dissent]

Actually it does. The receiver has more leeway than the bankruptcy and always takes precedence.

[itzallgone]

I got to give it to WORRIED.

Look at this post from Aug 2012, talking specifically about the 1.2 million dollars loaned to Fuel Doctor.

viewtopic.php?f=7&t=4971&start=20#p151041

[grimreaper]

I got to give it to WORRIED.

Look at this post from Aug 2012, talking specifically about the 1.2 million dollars loaned to Fuel Doctor.

viewtopic.php?f=7&t=4971&start=20#p151041

Fuel Dr Debacle was the Mother of ALL RED FLAGs. Great find there!

[grimreaper]

Beverley Hills Man>>>>
CLASSIC BS!!!
viewtopic.php?f=7&t=4971&start=20#p162022

I don’t give a rat’s ass if anyone reading this ever buys a single ATM from Joel or Ed. It’s just that they are nice guys, simple, straight-up and on the level and I hate to see their names disparaged with this kind of unfounded innuendo and scurrilous suggestions. And one last thought: Has anyone noticed the complete ABSENCE of anything negative about Joel or Ed or NASI on the Internet? If there were anything of substance in existence that impugned their characters, well, it would be out there. In fact, it is amazing to me that their lives are so squeaky clean that nobody has anything concrete to dredge up against them.

Thus endeth the lesson.

[Tednewsom]

I know Joel Gillis personally, as well as his partner, Ed Wishner, as I have since 2004 when I was referred to NASI by a friend who already owned ATMs through them and was doing well. Let’s call him Adam (not his real name). I then bought 16 ATMs that began operation in January, 2005, for $12,000 apiece -- not $11,000, not $19,000. They have never been sold for any other price [Ahem. Bullshit. TN]... During the course of the next 18 months, I increased my position to 250 ATMs.

I asked about NASI’s biggest investor, who then owned 1,000 ATMs -- let’s call him Ben -- who was also their longest investor and a good friend who knew them 30+ years since before they were in the ATM business. Joel freely gave me his phone number, I called him and we spoke at length, then some months later became better acquainted over lunch. I live in Beverly Hills and Ben lives not far from me and we have become friends. Adam, Ben and I are all certain that the NASI business model is no Ponzi scheme. [This guy was brilliant] In the same 18 months that I have increased my holdings to 250 ATMs, Ben has increased his to 1,500, for himself and his kids and grandchildren.

Shall we assume beverlyhillsguy actually was what he claimed, and that there's any accuracy in his saga (from two years ago)? Because if so, Wishner and Gillis soaked him for $3,000,000... and their "old friend" Ben tossed in $18,000,000. Ah, another satisfied customer.

Two questions, assuming there's anything to this at all. If you've got suckers on the hook who are throwing 3 and 18 million bucks at you... why piss around with scamming Grampa and Gramma out of 60 grand? Or chase some recently married couple to scam them out of $19.8 K? What you're going to gouge out of them wouldn't be a drop in the bucket to pay out the financial overhead on a 1500-contract customer like Good Old Ben.

And again, assuming any of these Happy Investors are anything other than scarecrows in the mind of beverlyhillsguy... how much of "Ben's" annual "profits" are recoverable? 'cause the way I'm figuring, 1500 contracts would generate a shade under a half million at $333 each per month, thus a shade under $6,000,000 a year. And if Good Old Ben was indeed on the ground floor, he (and his loving family and grandkids) is lon-n-n-ng past the zero-point of recovery and well into clawback territory.

Ben could just be a phantom. But boy, if not... four years back, at 6 million a year... there's $24 million. A nice place to start recovering stolen dough.

[grimreaper]

Shall we assume beverlyhillsguy actually was what he claimed, and that there's any accuracy in his saga (from two years ago)? Because if so, Wishner and Gillis soaked him for $3,000,000... and their "old friend" Ben tossed in $18,000,000. Ah, another satisfied customer.

Two questions, assuming there's anything to this at all. If you've got suckers on the hook who are throwing 3 and 18 million bucks at you... why piss around with scamming Grampa and Gramma out of 60 grand? Or chase some recently married couple to scam them out of $19.8 K? What you're going to gouge out of them wouldn't be a drop in the bucket to pay out the financial overhead on a 1500-contract customer like Good Old Ben.

And again, assuming any of these Happy Investors are anything other than scarecrows in the mind of beverlyhillsguy... how much of "Ben's" annual "profits" are recoverable? 'cause the way I'm figuring, 1500 machines would generate a shade under a half million at $333 each per month, thus a shade under $6,000,000 a year. And if Good Old Ben was indeed on the ground floor, he (and his loving family and grandkids) is lon-n-n-ng past the zero-point of recovery and well into clawback territory.

Ben could just be a phantom. But boy, if not... four years back, at 6 million a year... there's $24 million. A nice place to start recovering stolen dough.

The poster boy for clawback.

[Nationwideinvestor]

b. "Clawback" - not an easy task to implement. The receiver or trustee has broad powers to decide how to go about this. This is expected to take many years and substantial legal effort

Incorrect. Especially in this case where it will be relatively easy to parse out net winners. Any legal attempts to fight the clawback will fail in 99% of the cases. There is already substantial case law to justify clawback .Will it take years? I would estimate the first attempt to retrieve funds will commence within a year. Those who wish to fight it could buy time, but will ultimately lose in most cases. This is essentially a "pure play" ponzi with a simplistic structure, as opposed to a *MADOFF* nightmare.

c. The banks, both the recent and the previous- The banks have a regulatory responsibility to fulfill. This is the most likely an area of great interest and it is critical that the receiver and or trustee pursue this for the purposes of reimbursement to investors, not just fines.

Fallow ground here..good luck.

Thank you. Appreciate you comments:
1. The comment about "clawback" are from a group of attorneys who specialize in this area and are separate opinions from major firms. I hope/trust your are correct and the attorneys who do this for a living are incorrect. Perhaps you can strengthen your comments by your background ?
2. The comments about the bank being liable are again by separate attorneys who specialize in this area. They have acted when the trustee and or receivers failed to act - class actions (on contingency) have succeeded and returned funds to PONZI scheme victims when agencies have not. If the receiver or trustee or both together target the banks there is no need for any independent action. We hope separate investor organization will not be needed. Some are getting prepared as a backup. Bank specialist at the highest level have been consulted and will determine the likelihood of claims against the bank, a very specialized area. Keep in mind if a great branch is doing $90,000,000 and year, a company such as NASI might have been the largest customer. There was only one account to handle both the income and the new investors. Preliminary consultants agree this could be a regulator issues of significance.
3. The comments about the advantage of having a case handled by the SEC or the Bankruptcy court or both has been a source of constant disagreement by attorneys who work in both areas. There is a divergence of opinion. It is confusing ! It depends on the type of assets, the length of clawback defined by the state. Receiver get only fees. Trustees get minor fees but a larger payout when they perform. This a complicated issue and it seems that divergent opinions come from "stakeholder" lawyers depending on if the attorney specializes in SEC or bankruptcy or both. Just for example only, vendor claims are not dealt with at the SEC level. The majority opined that bankruptcy was best for investors - again an area of disagreement amoung expert and depends on the specific assets class, and many other details. Which of the two areas do you practice in. Sounds like SEC ? Are your comments supported.
4. The SEC does supersede IF the involuntary bankruptcy is filed after a receiver is in place. This has been challenged in several districts and the SEC has prevailed if the involuntary bankruptcy is filed after a receiver is in place. The SEC has staked its claim now with a temporary receiver and there is uncertainty as to how the bankruptcy court will act since the filing was sealed and no one knew about it, in particular the individuals who filed. The occurrence of a sealed filing is new development and could be challenged by the bankruptcy court themselves or they could defer (which seems less likely as there could be vendors who have claims not handled by the SEC). The best is an attempts to find common ground between the two agencies for the benefits of the investors, for specific issues and items of the case, which we are told does happen in these cases. So again can you support your expertise ?

We hope these comments are helpful for those who are confused and scared by all the chatter. The blog is helpful, but it also important that we be clear about the sources and backgrounds of those providing their interpretation of events and the law. We are not attorneys but have consulted with dozens in an attempt to get educated and are sharing that here. Opinions will vary from the professionals.
Thank you all.

[imnewhere]

Some perspective...

If someone invested 16 years ago and earned 25%/year, then was clawed-back 4 years and lost their investment, that investor still received a 200% return.
Do the math. Give Joel $ 100K, he sends you $ 400K over 16 years. You lose the last 4 years ($ 100K) and your investment ($ 100K). You still walk away with $ 300K.

Not too shabby.

[Lost Income]

I can't seem to get into the following website recently suggested. Please can someone advise?

nasireceivership.com

[MarvinGardens]

I can't seem to get into the following website recently suggested. Please can someone advise?

nasireceivership.com

Even if the site was put up yesterday as someone has said, it still takes two or three days for the URL to be populated on the top level domain servers and all the lesser servers.

However, I just did a domain name search and that URL with all listed extensions came up as available. That doesn't prove anything, it's just interesting.

[wserra]

Nationwideinvestor - why did you repost six old posts just to add four words - the same four words - to each?

[webhick]

Not just any four words, but "kindly see thread below" which makes no sense, especially since he didn't post anything of value after that.

I'm deleting them. It's just spam.

[Tednewsom]

Some perspective... Give Joel $ 100K, he sends you $ 400K over 16 years. You lose the last 4 years ($ 100K) and your investment ($ 100K). You still walk away with $ 300K.

Again, you see why I wrote of the clawbacks, "This stinks." It's an imperfect and incomplete method of recovery at best, but it's at least something.

I can just hear the few remaining NASI boosters moan, "But it's not fair. They're taking my money." No, darling, they're taking stolen money.

[AndyK]

Interesting that the ONLY specific hit on a Google search for "nasi receivership" points right back here.

[ATM'd]

Sorry - I had passed along info I got about the receiver's website, but it was wrong.

The correct adress is www.nasi-nationwideatm.com

ANYBODY who has any info on where these guys may have hidden/acquired assets (Facebook stock, real estate, whatever) PLEASE pass this info to the receiver