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.
Tednewsom
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Re: ATM LEASEBACK SCHEMES-- any insight?

Post by Tednewsom »

MarvinGardens » wrote on Thu Jan 16, 2014 8:27 pm
I don't care if they are as guilty as the Japanese in the rape of Nanjing as long as my client is safe.
Then MarvinGardens » wrote on Fri Jan 17, 2014 4:09 pm
So if we apply the 7% net profit average to $11,880 we see a net profit of $832. Yet NASI pays its investors a guaranteed $4k per machine, per year.

NASI has to generate enough money from its machines to pay 20% per year to its lease-back clients, plus pay significant sales commissions. Hmmm ...

At first glance, a 20% return on any investment is an attention getter. But, I've seen deals return higher than this, sometimes much higher.
So. ummm... does that mean the War Crimes Tribunal has become interested? 8)
Red Flag

Re: ATM LEASEBACK SCHEMES-- any insight?

Post by Red Flag »

I found an interesting episode of "American Greed" posted from Youtube below.

http://www.youtube.com/watch?v=Rc0W5uHtl0E

It is a story about a man named PHILIP BARRY, who operated a Ponzi Scheme for 30 years! They say it is so far, the longest Ponzi Scheme ever exposed...

There are some similarities in this story to this ATM Lease Back what ever you want to call it.

The Attorney General in the story mentions that one of the big RED FLAGS in investments is the guaranteed of a 20% return. Not so much the 20% return...it is the word "Guaranteed" that raises the red flag...

Anyways, it is interesting. If you have the patience to watch the episode, it will reveal some uncanny similarties...

Hmmm...
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Re: ATM LEASEBACK SCHEMES-- any insight?

Post by Tednewsom »

Not that there's anything wrong with long-term thievery, of course. :snicker:

And it's not illegal unless they catch you, right? 8)

Besides, the chumps never complain because they're too embarrassed. We count on that. :mouthshut:
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Re: ATM LEASEBACK SCHEMES-- any insight?

Post by Tednewsom »

Red Flag wrote:I found an interesting episode of "American Greed" posted from Youtube below.

http://www.youtube.com/watch?v=Rc0W5uHtl0E

Anyways, it is interesting. If you have the patience to watch the episode, it will reveal some uncanny similarties...
Indeed. The story of "the Brooklyn Madoff" has the cozy familiarity of a favorite sitcom. This week, our wacky rascal convinces his friends and neighbors they're making 20% annual returns. Hilarity ensues.
Red Flag

Re: ATM LEASEBACK SCHEMES-- any insight?

Post by Red Flag »

:lol:
:snicker:
worried
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Re: ATM LEASEBACK SCHEMES-- any insight?

Post by worried »

To anybody arguing that it's ok to not register this stupid ATM leaseback business with the SEC:

from: http://www.sec.gov/news/press/extra/sen ... rfraud.htm

"Sale and Leaseback Contracts
In an attempt to avoid the investor protections of securities laws, some investments are
structured to resemble the sale of a piece of equipment such as a payphone, ATM
machine or Internet booth
...." there's more, login and read...
If you continue to argue against this point, you're either completely fooled yourself, or you're actively trying to fool others.... which is it?...


Ted Newsom wrote a while ago that unfortunately the SEC may not really care until somebody actually gets hurt and complains... that may be true... but somebody relatively recently brought up possible tax evasion issues... now THAT always gets the government's attention...

Why do I care? I am worried about a family member who has fallen DEEPLY for this and has tried to get me into it. It's going to hurt that family member when this scam falls apart. The real damage is what is done to any possible inheritance, forget it, the government will come looking for money sooner or later. Read about the 'trustee' in the Madoff case and how many people they've gone after...

The sooner this scam gets busted, the better...
If you have to "Believe" something, that means you can't prove that it's true... please, for your own sake, speak and act accordingly...
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Re: ATM LEASEBACK SCHEMES-- any insight?

Post by worried »

What exactly is "due diligence" anyway?... It seems to me all the Gillis supporters seem to think that being told by Gillis himself to "trust me" qualifies as "due diligence". Really. They quote all the numbers and stories fed to them by Gillis, or they reference stories from their friend who invited them into the business. That is NOT "due diligence" people! That is called: GETTING DUPED....

"Due Diligence" is getting information from IMPARTIAL, 3RD PARTIES, whose BUSINESS is making SURE other businesses are telling the TRUTH!!... like, say, financial auditors!.... or the SEC!!

Somebody please figure out a way to bust these guys....
If you have to "Believe" something, that means you can't prove that it's true... please, for your own sake, speak and act accordingly...
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Re: ATM LEASEBACK SCHEMES-- any insight?

Post by worried »

Here is "poor man's due diligence" (what I do to decide if it's even worth PAYING some REAL financial professional/lawyer):

http://en.wikipedia.org/wiki/Securities ... ._Howey_Co.
Majority Opinion

Justice Murphy, writing for the majority, identified the major legal issue in this case as whether or not the contracts Howey was selling (which in substance were basically leaseback agreements) constituted an "investment contract" within the meaning of § 2(a)(1) of the Securities Act of 1933. Murphy reasoned that while the term "investment contract" was left undefined by the Act, it had been used in state blue sky laws to cover a broad array of contracts and other schemes to raise capital in a way to secure some income or profit from the use thereof. Thus, the Court concluded, Congress had written the term into the statute in recognition of its previously adopted common law meaning.

Murphy then formulated one of the U.S. Supreme Court’s earliest tests to determine whether an instrument qualifies as an "investment contract" for the purposes of the Securities Act (which later came to be referred to as the Howey test):
1.investment of money due to
2.an expectation of profits arising from
3.a common enterprise
4.which depends solely on the efforts of a promoter or third party

Murphy determined that the contracts in issue here met all four prongs of this test, and thus W. J. Howey could be held liable for violating § 5 of the Securities Act of 1933. Furthermore, Murphy held that the fact that some of the investors chose to use services other than those of Howey-in-the-Hills to tend to the groves was irrelevant, because §5 forbids the offer of unregistered securities, as well as the sale of them.


This ATM lease-back scheme fits each of those points perfectly (I've seen a poster here feign misunderstanding of this).

Note ALSO that in the case described above, those duped were given MORE rights (they could hire their own services) than people being solicited to buy ATM's. In the contract I've read, buyers are NOT allowed to go look at, or "interfere in any way" with the operation of the ATM's.

NOTE ALSO the last sentence of the wikipedia excerpt, to paraphrase: GILLIS IS BREAKING THE LAW!

NOTE also that the above excerpt from Wikipedia references an ACTUAL SEC LAW:
(from http://www.sec.gov/divisions/corpfin/gu ... interp.htm )
Section 201. Securities Act Section 2(a)(1)
201.01 A sale and leaseback arrangement may constitute an investment contract, depending on the terms of the transaction and the extent to which there are related arrangements (such as arrangements relating to financial or management services). [Nov. 26, 2008]


Now THAT is "due diligence"... I already know just from looking at that stuff and what I was told MYSELF when solicited (and can read in the contract given to me), that if I REALLY, REALLY, REALLY, want to still hold on to the hope that this is legitimate, then I REALLY better PAY somebody who actually knows this stuff (the financials AND the LAW) and DOESN'T have an INTEREST in SELLING IT TO ME, to really investigate it thoroughly... THAT'S how REAL business is done, even *I* know that. If there's potential for BIG money to be made, then it's worth some investment up front making sure it's legitimate. But, I've read that some have attempted just that and gotten no answer from Gillis... gee, I wonder why?... maybe he's too busy loaning money to other scams like the "Fuel Doctor"... :beatinghorse:

Any ONE person could make me feel COMPLETELY different about all this by giving the name of just ONE knowledgeable, reputable, impartial, 3rd party auditor who has determined beyond all doubt that Gillis' "business" is not a scam... ??.. All the rest of these posts espousing the virtues of Gillis and how much money he's making are worthless without that.
If you have to "Believe" something, that means you can't prove that it's true... please, for your own sake, speak and act accordingly...
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Re: ATM LEASEBACK SCHEMES-- any insight?

Post by worried »

Has anybody else out there bothered to trace the source of all those "news articles" about NASI? They're from a company that is paid to "rehabilitate" web presences...
If you have to "Believe" something, that means you can't prove that it's true... please, for your own sake, speak and act accordingly...
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Re: ATM LEASEBACK SCHEMES-- any insight?

Post by worried »

Honestly, if you can't read and understand these short passages, you shouldn't be investing large sums of money on your own... and you definitely shouldn't be arguing with those who CAN...

from http://www.law.cornell.edu/supremecourt/text/02-1196 :

Held: An investment scheme promising a fixed rate of return can be an “investment contract” and thus a “security” subject to the federal securities laws. Section 2(a)(1) of the 1933 Act and §3(a)(10) of the 1934 Act define “security” to include an “investment contract,” but do not define “investment contract.” This Court has established that the test for determining whether a particular scheme is an investment contract is “whether the scheme involves an investment of money in a common enterprise with profits to come solely from the efforts of others.” SEC v. W. J. Howey Co., 328 U. S. 293. This definition embodies a flexible, rather than a static, principle that is capable of adaptation to meet the countless and variable schemes devised by those seeking to use others’ money on the promise of profits. Id., at 299. The profits this Court was speaking of in Howey are profits—in the sense of the income or return—that investors seek on their investment, not the profits of the scheme in which they invest, and may include, for example, dividends, other periodic payments, or the increased value of the investment. There is no reason to distinguish between promises of fixed returns and promises of variable returns for purposes of the test, so understood. In both cases, the investing public is attracted by representations of investment income. Moreover, investments pitched as low risk (such as those offering a “guaranteed” fixed return) are particularly attractive to individuals more vulnerable to investment fraud, including older and less sophisticated investors. Under the reading respondent advances, unscrupulous marketers of investments could evade the securities laws by picking a rate of return to promise. This Court will not read into the securities laws a limitation not compelled by the language that would so undermine the laws’ purposes. Respondent’s claim that including investment schemes promising a fixed return among investment contracts conflicts with precedent is mistaken, as no distinction between fixed and variable returns was drawn in the blue sky law cases that the Howey Court relied on, and no post- Howey decision is to the contrary, see United Housing Foundation, Inc. v. Forman, 421 U. S. 837. Dictum suggesting otherwise in Reves v. Ernst & Young, 494 U. S. 56, n. 4, was incorrect. The SEC has consistently maintained that a promise of a fixed return does not preclude a scheme from being an investment contract. The Eleventh Circuit’s alternative holding, that respondent’s scheme falls outside the definition because purchasers had a contractual entitlement to a return, is incorrect and inconsistent with this Court’s precedent. Pp. 3–8.
If you have to "Believe" something, that means you can't prove that it's true... please, for your own sake, speak and act accordingly...
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Re: ATM LEASEBACK SCHEMES-- any insight?

Post by Tednewsom »

worried wrote:Has anybody else out there bothered to trace the source of all those "news articles" about NASI? They're from a company that is paid to "rehabilitate" web presences...
Do tell? I mean... not that hiring a PR firm is a bad thing. How did you track this?
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Re: ATM LEASEBACK SCHEMES-- any insight?

Post by worried »

Not that difficult at all:
do a Google search of "joel gillis nationwide",

the second highest entry (after the Quatloos site ;-) is
http://www.marketwired.com/press-releas ... 751444.htm

Now go to www.marketwired.com ... dive a few levels into their "Product" descriptions... you'll get the gist... it definitely exposes the "news" story about Nationwide for what it is: not very well disguised propaganda targeted toward those that WANT to believe without getting real objective evidence for fear it might contradict their beliefs... that goes for people like "BeverlyHillsMan" (I doubt seriously that guy is real), who are apparently SOOO Smart and SOOO rich that he even has a son who is a Harvard Law graduate, but he can't pay one of his own REAL financial/lawyer people (who are presumably always on retainer anyway since he's so successful) to give him a REAL, objective analysis. Note also the lack of actual contact information from ANYBODY for a real auditor that can present real, objective evidence. Instead, nothing but anecdotes... anecdotes for those that want to believe...
If you have to "Believe" something, that means you can't prove that it's true... please, for your own sake, speak and act accordingly...
worried
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Re: ATM LEASEBACK SCHEMES-- any insight?

Post by worried »

Speaking of BeverlyHillsMan,... go back and read his long-winded treatise on the virtues of Gillis and his business... this guy is actually pretty smart and he knows what he's doing, he cleverly and smoothly integrates a great little logical fallacy into his presentation by weaving into the dialogue a little "primer" on the "4 types of business". This is a clever tactic used throughout the marketing world and can be a logical fallacy when it's used to make the reader associate/transfer the truth and integrity of the basic facts presented (4 types of business) to the truth and integrity of the product/person being promoted.

A simpler example is dishwashing detergent:
A great way to get around comparing your dishwashing detergent to other detergents, but make readers/listeners think your detergent MUST be superior is to launch into a basic chemistry explanation of how the molecules in the detergent bind to the 'sticky' points of grease so that the grease can't stick to anything else and the grease gets carried harmlessly away never to bother anybody again. The fallacy is the implied, but not stated (that would be illegal), suggestion that your detergent is the only one that knows this chemical secret and therefore is superior.

BeverylyHillsMan's story and fallacy isn't quite the same, for one, his story is much longer and more involved and is actually a great case study in how to CON people. First, he talks at length about why he should be trusted (he's rich... he says it over and over, that's a technique for making something seem believable), then he pulls out the "4 types of business fact fallacy" and cleverly weaves NASI and Gillis into it with ZERO actual verifiable facts.... I'd be willing to bet the author of "BeverlyHillsMan"'s story is none other than Joel himself... who else would take so much time and care to put something like that together?
If you have to "Believe" something, that means you can't prove that it's true... please, for your own sake, speak and act accordingly...
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Re: ATM LEASEBACK SCHEMES-- any insight?

Post by Tednewsom »

Well, ya got me on that. Anybody good at finding out geographical locations from IP addresses? If it turns out to be the Calabasas or Canoga Park area, well... :roll:
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Re: ATM LEASEBACK SCHEMES-- any insight?

Post by MarvinGardens »

worried wrote:"Due Diligence" is getting information from IMPARTIAL, 3RD PARTIES, whose BUSINESS is making SURE other businesses are telling the TRUTH!!... like, say, financial auditors!.... or the SEC!!
Having done due diligence in the securities industry for some 20 years I define it this way: Examining a company, business plan or investment and its related market to the extent that you can recommend its acceptability or lack thereof with a confidence level sufficient to avoid getting sued or fired.

What due diligence is not is cruising the Internet trying to interpret legal opinions and commentary. That falls under the heading of personal education. If you want a legal opinion, ask a lawyer.

If you have a securities question about a company operating in California, call the CA Dept. of Business Oversight. This is a new department created in 2013 from the combination of the old Department of Corporations and Department of Financial Institutions which is the regulating authority for financial entities in CA. I called and verified that the company in question was a CA corporation and is not registered as a financial firm in California.

I asked to speak to a financial department attorney and was connected with a Sr. Counsel. The woman was spectacularly uninterested but was willing to speculate that yes, a sale/leaseback with a guaranteed rate of return was probably a security in the State of California. And, I had to pry that out of her. I asked if the State of California had any interest in investigating an unlicensed firm selling unregistered securities in the state. She told me perhaps if I wanted to file a complaint. This, of course, is a bureaucratic brush off. Being unharmed, any complaint by me would simply get me a computer generated form thanking me for my interest and assuring me that the State was ever vigilant with no mention of the complaint's final resting place in the round repository.

Still, it's interesting that a government Sr. Counsel would even grudgingly admit the possibility that something might be afoot. And, it was a free legal opinion. We also know that the State of Colorado shares that opinion as does the SEC.
---------------------------------------------------------------------------------------
L.A. Judge Issues Orders in ATM SchemeBRIEFLY / SECURITIES
March 28, 1998|Reuters

A Los Angeles federal judge ordered four men to repay more than $1 million they reportedly bilked from investors in an alleged scheme to sell and lease back ATMs, the Securities and Exchange Commission said. U.S. District Judge George King also ordered the four to stop selling unregistered securities and selling securities by fraudulent means.
----------------------------------------------------------------------------------------
Regulators target ATM investment

Colorado Securities Commissioner Fred Joseph has issued a cease-and-desist order against OneSource Financial Group LLC, a California company, and two of its principals -- Mark Lebowitz and Alex Roderick of Costa Mesa, Calif. -- for violating the securities registration and anti-fraud provisions of the Colorado Securities Act.

At least 23 Colorado investors have invested more than $600,000 with the company, state officials said.

Securities officials allege that from at least October 2005, OneSource has been selling automated teller machines to investors in Colorado for $4,000 apiece. OneSource told investors that the ATMs would be placed in casinos in Las Vegas and Atlantic City, N.J., or in Chevron gas stations, and that investors would receive $1 for each transaction conducted at their ATM.

But the state securities division staff said the ATMs never existed and that interests in the ATMS are securities under the Colorado Securities Act that should have been registered with the Colorado securities commissioner.

The state also alleged that Lebowitz and Roderick made false statements and omissions of material fact to investors, all in violation of the anti-fraud provisions of the act.

The cease-and-desist order, which was made final on May 23, orders OneSource, Lebowitz and Roderick to immediately stop offering or selling any "security" in or from the state of Colorado.

"The sale and leaseback of a piece of equipment like an ATM has been a scam that has been around before," Joseph said in a statement. "And it is not uncommon for the promoters of these schemes to say that the ATM will be located in a casino."

He urged investors to contact the securities division with any questions about an investment product, broker or adviser before making an investment.
-------------------------------------------------------------------------------------------------------------
Notice that in both cases, after finding the defendents guilty, the punishment was orders to stop selling unregistered securities and in the California case reparations were ordered. No one went to jail.

Ponzi schemes, at least at the federal level, are investigated by the SEC which must then file suit in the state in which the crime has been committed. I posted an inquiry with the SEC a week ago but do not expect any kind of rapid response.

What makes a Ponzi scheme so lucrative and relatively safe, and I'm speaking theoretically here, is that it is a confidence game. Investors have confidence because early investors are always paid on time and in full so that they may retell the story of risk free high returns to others who may be persuaded to invest. It's an affinity scheme. And, investors being "true believers," roll over their investments never actually withdrawing much in the way of "profits." They are compounding their wealth. This gives the scheme legs. It's why they can run for years. If few people take their profits out of the system and new money is continually brought in you have plenty to pay outsized returns.

In today's climate of low investment returns, gullible investors are pushed way out on the risk spectrum and want to believe. They will not question the authenticity of the investment because they have been paid regularly for years.

This is long, and I'm sure you are all bored by now, but let me end with this:

I have read many hundreds of financial statements and I can assure you that there would be no difficulty hiding a Ponzi scheme in an audit. After all, NASI stated in their 1998 10(g) form that the company would buy additional ATMs for itself from "cash flow." So requesting a firm's financials would do you no good.

Law enforcement and regulatory agencies will take no interest until someone is visibly harmed. After all, they have an inbox full of complaints for which they have limited resources to investigate. I offer the challenge to find any securities fraud or Ponzi case that was investigated before they blew up.

The only thing that would prove malefaction would be a detailed sampling of the actual existence of the ATMs and a thorough cross reference of their client ownership proving that no ATM was assigned to more than one person. And ... who's going to pay for that.

Pay your taxes and you have no trouble with the IRS.

A successful scheme would involve a mix of legitimate business and fraud - expensive to prove. I would reject the investment simply because of the cost of due diligence - the verification issue.

It is interesting that paragraph 12) Non-Interference of the lease agreement we are admiring specifically enjoins the lessor from "... contacting the locations where the ATMs is/are installed and/or any service providers under contract with (the company) relating to the operation of such ATMs."

That sort of makes verification difficult unless one simply ignores that paragraph in the interests of maintaining one's financial security.

Perhaps in a later post we can talk about why ATMs are irrelevant and what the company is really selling is a 10 year renewable annuity and it is selling it for way too low a price.
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Re: ATM LEASEBACK SCHEMES-- any insight?

Post by Tednewsom »

Anybody wanna lease a pay phone?
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Re: ATM LEASEBACK SCHEMES-- any insight?

Post by webhick »

Tednewsom wrote:Well, ya got me on that. Anybody good at finding out geographical locations from IP addresses? If it turns out to be the Calabasas or Canoga Park area, well... :roll:
BH Man's IP is anywhere between 20 and 50 minutes from either location, depending on which service you use. The one that I find the most accurate for my IP's location places him the closest.

Of course, it doesn't mean anything either which way.
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Re: ATM LEASEBACK SCHEMES-- any insight?

Post by worried »

wait... so, does that IP address for BeverlyHillsMan mean that he WASN'T stuck in an airport in Madison, Wisconsin when he wrote that like he said?
If you have to "Believe" something, that means you can't prove that it's true... please, for your own sake, speak and act accordingly...
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Re: ATM LEASEBACK SCHEMES-- any insight?

Post by Tednewsom »

Like I wrote 4 years ago...
Tednewsom wrote:I'm in awe at the smarts and savvy here.
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Re: ATM LEASEBACK SCHEMES-- any insight?

Post by webhick »

worried wrote:wait... so, does that IP address for BeverlyHillsMan mean that he WASN'T stuck in an airport in Madison, Wisconsin when he wrote that like he said?
Maybe if LAX relocated to Wisconsin.
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