ATM LEASEBACK SCHEMES-- any insight?

[dawnth]

My ATMs are in another state altogether in convenient store. I called one store, but she couldn't see a serial number and she did give me a number that was on a sticker SALES: ATM Express 877-271-2626 I wouldn't even know what to ask them?

Also on the top of our monthly statements it states a different company
Electronic Processing Inc-XTRA Cash ATM, 8787 Complex Dr in San Diego. 858-712-1654
Not sure what I would ask them either? My contracts have not identified or specified and specific ATM.
After we sign the contract and send the money, he takes about 2 months to process, and our first check comes with the statement that shows the serial # hotel/store/city/state/#transactions
Thoughts/suggestions?

[10 year investor]

JamesVincent-thank you for your response. I heard Joel say that if a machine was underperforming, he would switch it with a company owned machine not pull it from the location.

For ATMCompany2, I'm basically asking questions based on what he's experienced. If he has handled 5000 or so machines, he should have a pretty good cross section of what's out there. Specifically, if a machine costs $4000 and is in a good location, how many transaction would he expect per month and if the fee is $3, how much of that does he think the company would get of that? I would think that could be answered fairly easily. At least a ballpark.

[Raider]

A few months ago I dug a bit deeper into this. I found that two of the five hotels listed on my monthly statements where my ATM machines are allegedly located no longer exist. They were rebranded several years ago, and the current hotel franchise does not match the hotel name on my monthly statement received from NASI. I suppose this could be excused to poor record-keeping by NASI. I called the GM's at all of the hotels. Two of the GMs were very helpful and I was able to confirm that NASI does not own either one of the machines. In fact, I spoke with the owner or representative of both machines - one was owned by an individual (who was quite upset with my inquiry - the hotel GM had called him) and the other was part of a franchise and I was able to speak with the franchisor. Neither one of these parties had ever heard of NASI or Gillis. I subsequently called Gillis about this and his immediate reaction was a very belligerent reminder that making direct inquires like this was a violation of the contract - no apology or "let me look into it." My subsequent statements continued to reference these two non-existent hotels. I'm still not sure of the status of the other three ATMs.

[worried]

To Tednewsom particularly (because he remembers, like I do, a single occurrence of actual advertisement of NASI ATM-leasebacks on a website):

I took a quick look at the subpoena at:
https://docs.google.com/file/d/0ByGptHV ... edit?pli=1

On page 8 (out of 10 of the pdf file, numbered page 15 at the top of the page), there is a section listing required documents including websites advertising NASI investment opportunities.

I clearly remember seeing the website that Tednewsom referred to in a posting back in the middle of page 8 of this thread:

Here's a little research puzzler. A couple years ago I found a website or blog which dealt with investment possibilities, the pros and cons, apparently run by a couple of Aussies. Most of the discussions, therefore, tended to be about stuff Down Under or in the South Pacific area generally. To these unsophisticated eyes, the members of the board were as hip to the ins and outs of this universe as those on Quatloos.

The honcho of the site apparently crossed paths with and interviewed "Joel"-- only his first name was used in the original post, oddly-- who gave the website guy a long, involved pitch on how scrumptious the ATM leaseback business was, what a no-lose deal, blah blah blah. The guy's initial comment on the interview was resolutely positive: Joel was such a great guy, the return investment was appealing, you don't have to work for your money, just sit back and let it flow in.

I posted a link to this discussion and the boys over there said, "Whoa. Yeah, hey, wait a minute... this thing looks like a duck... quacks like a duck..."

I cannot find the site anywhere anymore. I would have thought even a dead blog would show up with a Google search as being cached. It may be instructive to hear the pitch from the Horse's Mouth.

I DEFINITELY saw this way AFTER 2010 (the end of the time-window for required docs apparently). I'm willing to bet Joel/Ed don't voluntarily mention this to the SEC. Can ANYBODY find this? I distinctly remember the statement that Joel was giving a phone interview while sitting poolside at a fancy hotel in Hawaii (Maui?, Marriott?)...

[ATMCompany2]

My ATMs are in another state altogether in convenient store. I called one store, but she couldn't see a serial number and she did give me a number that was on a sticker SALES: ATM Express 877-271-2626 I wouldn't even know what to ask them?

Also on the top of our monthly statements it states a different company
Electronic Processing Inc-XTRA Cash ATM, 8787 Complex Dr in San Diego. 858-712-1654
Not sure what I would ask them either? My contracts have not identified or specified and specific ATM.
After we sign the contract and send the money, he takes about 2 months to process, and our first check comes with the statement that shows the serial # hotel/store/city/state/#transactions
Thoughts/suggestions?

I know Xtra Cash was acquired along (8+ years) time ago. I was trying to find some research about it on Google. I believe that Cardtronics (largest US ATM company, public) acquired them a long time ago.

You have to get creative to find the link and I used: [Cardtronics buys XtraCash ATMs –extra] on Google and finally came up with this (make sure you add –extra as part of the search):

http://www.atmmarketplace.com/news/card ... ing-spree/

This was back in 2003. You better believe the statements, terminal IDs and such would change dramatically if there were an acquisition. My guess is that Gillis used a very old company that would be hard to track on that part of the scheme.

With ATM Express, there was small company with that name in San Diego in the early 2000s. There was also a large company named ATM Express in Montana. Over time, the Montana company won out and the San Diego company faded away. ATM Express continued to grow and consolidate and later became PAI (www.gopai.com) . We process a handful of machines with PAI and they are very reputable. A Google search of the phone number listed for ATM Express came up empty. Maybe you can call PAI and ask if that number exists. Again, there should be a terminal ID somewhere on the paper statement.

Regarding the serial numbers, most of the machines have them in the upper left hand corner of the upper hatch inside the machine. Technically, it’s a sticker and can be removed or swapped. Thus, a front desk clerk would need an ATM key to open the top hatch and verify. Believe it or not, the ATM keys to get into the top hatch are universal, so maybe an ATM guy in the area of the machines can help you out with that one or you can order a key online when you figure what model machine you have.

Speaking of models, did the paperwork ever mention the specific make and model used. Here are several (but not all) popular past and present models, with their serial number prefix:

1) Nautilus Hyosung NH 1500 (http://www.nautilus.hyosung.com/english ... antage.jsp )
Serial numbers start with Y then 9 digits start with 1 or 2, like Y240044559)

2) Nautilus Hyosung NH1800 (http://www.nautilus.hyosung.com/english ... antage.jsp)
Serial numbers start with Y then 9 digits start with 1, 4 or 7, like Y483008687)

3) Hantle 1700W (http://www.hantle.com/Product/Product.a ... duct=1700W )
Serial numbers start with TYAA or TYAB then 6 digits start like TYAA008534)

All of these machines cost/used to cost in the $2000 to $3000 range, depending on how many bells and whistles.

Let me know what else I can answer.

[ATMCompany2]

A few months ago I dug a bit deeper into this. I found that two of the five hotels listed on my monthly statements where my ATM machines are allegedly located no longer exist. They were rebranded several years ago, and the current hotel franchise does not match the hotel name on my monthly statement received from NASI. I suppose this could be excused to poor record-keeping by NASI. I called the GM's at all of the hotels. Two of the GMs were very helpful and I was able to confirm that NASI does not own either one of the machines. In fact, I spoke with the owner or representative of both machines - one was owned by an individual (who was quite upset with my inquiry - the hotel GM had called him) and the other was part of a franchise and I was able to speak with the franchisor. Neither one of these parties had ever heard of NASI or Gillis. I subsequently called Gillis about this and his immediate reaction was a very belligerent reminder that making direct inquires like this was a violation of the contract - no apology or "let me look into it." My subsequent statements continued to reference these two non-existent hotels. I'm still not sure of the status of the other three ATMs.

There's your scheme right there, claiming he owns the ATMs that aren't even his. My gut tells me that Joel owns some ATMs. Otherwise, how could he pay the 20% plus return annually for years? But he probably assigned multiple owners to the same machines and/or really started manipulating the reports. It's as simple as this:

Give your investors web access to the portal (for example here is our general portal:
https://columbusdata.net/ ) and everyone can substantiate the figures on their own.

If all investors are receiving is the paper statements, it's incredibly easy to fabricate in several ways.

[ATMCompany2]

For ATMCompany2, I'm basically asking questions based on what he's experienced. If he has handled 5000 or so machines, he should have a pretty good cross section of what's out there. Specifically, if a machine costs $4000 and is in a good location, how many transaction would he expect per month and if the fee is $3, how much of that does he think the company would get of that? I would think that could be answered fairly easily. At least a ballpark.

10 year, I will give you an actual example. We run an ATM at one of the St. Regis hotels out there. Last month it did 302 withdrawals at $4 per withdrawal for $1208 gross. We also collect (and Joel would too) about 12 cents per WD on the processing side call interchange (like when your bank charges you a fee for using a “foreign ATM”, we get 12 cents out that portion).

We split 50% of the surcharge with the hotel (standard rate for a fee that high and a hotel that big-smaller, less prestigious hotels may get 35% or so). So, $1208 * 50% leaves $604 plus $36.24 in interchange revenue (302 x $0.12) = $640.24. We pay $25 per monthly for a wireless box in lieu of a phone line and we hire a cash courier to load their own cash (we can use a company like Brink’s but this route is cheaper for us) that cost about $240 that month, bringing our monthly net to $375.24. Our annual net would be $4502.88. We put in a nice, color machine which cost $2500 and were required to provide a nice wooden cabinet, which set us back another $800. So our total cost basis was $3300 bet our annual net was $4502.88 for an ROI of 136%.

Note, this is a simplistic example without using an accounting view like amortizing the replacement value of the machine or factoring in repairs and service. The St. Regis example represents one that is a B+ deal in terms of profitability. We have nightclubs and outdoor machines which do much better. But we also have a lot of mom and pop machines which are much less profitable.

Somewhere someone mentioned an average ROI of 7%, citing some publication. That is way, way under the mark. We are looking at about 100% ROI per machine, per year on average. Thus, if a machine costs us $2000, we net about $2000 per year on the machine. From an accounting perspective, this isn’t entirely accurate as you have a declining asset (the machine). However, the machines are modular in design. Meaning if a card reader goes bad, all you have to do is replace that $100 part versus allocating an additional $2000 and replacing the machine altogether.

[Tednewsom]

To Tednewsom particularly (because he remembers, like I do, a single occurrence of actual advertisement of NASI ATM-leasebacks on a website):

I took a quick look at the subpoena at:
https://docs.google.com/file/d/0ByGptHV ... edit?pli=1

On page 8 (out of 10 of the pdf file, numbered page 15 at the top of the page), there is a section listing required documents including websites advertising NASI investment opportunities.

I clearly remember seeing the website that Tednewsom referred to in a posting back in the middle of page 8 of this thread:

Here's a little research puzzler. A couple years ago I found a website or blog which dealt with investment possibilities, the pros and cons, apparently run by a couple of Aussies. Most of the discussions, therefore, tended to be about stuff Down Under or in the South Pacific area generally. To these unsophisticated eyes, the members of the board were as hip to the ins and outs of this universe as those on Quatloos.

The honcho of the site apparently crossed paths with and interviewed "Joel"-- only his first name was used in the original post, oddly-- who gave the website guy a long, involved pitch on how scrumptious the ATM leaseback business was, what a no-lose deal, blah blah blah. The guy's initial comment on the interview was resolutely positive: Joel was such a great guy, the return investment was appealing, you don't have to work for your money, just sit back and let it flow in.

I posted a link to this discussion and the boys over there said, "Whoa. Yeah, hey, wait a minute... this thing looks like a duck... quacks like a duck..."

I cannot find the site anywhere anymore. I would have thought even a dead blog would show up with a Google search as being cached. It may be instructive to hear the pitch from the Horse's Mouth.

I DEFINITELY saw this way AFTER 2010 (the end of the time-window for required docs apparently). I'm willing to bet Joel/Ed don't voluntarily mention this to the SEC. Can ANYBODY find this? I distinctly remember the statement that Joel was giving a phone interview while sitting poolside at a fancy hotel in Hawaii (Maui?, Marriott?)...

I defer to anyone more patient and computer-literate than me on this one. I'm not 100% sure I'd consider the interview "an advertisement," but it was certainly a one-sided pitch with an interviewer so credulous, he did not once challenge "Joel's" statements or math.

Nothing every disappears from the Net, so it's out there, somewhere. All I can remember was that it was a site similar to Quatloos though not as encompassing... the site author(s) appear to have been based in Australia and primarily concerned with Aussie &/or SE Asia locations and opportunities, and that my initial response to their comments section started a short thread of 5 or 6 responses from people (including the original interviewer) who read this Quatloos thread and started thinking that perhaps this was not the "sure thing" Joel claimed it to be.

Goddamn, what a rotten, miserable, crooked shit he is.

[MarvinGardens]

Somewhere someone mentioned an average ROI of 7%, citing some publication. That is way, way under the mark. We are looking at about 100% ROI per machine, per year on average. Thus, if a machine costs us $2000, we net about $2000 per year on the machine. From an accounting perspective, this isn’t entirely accurate as you have a declining asset (the machine). However, the machines are modular in design. Meaning if a card reader goes bad, all you have to do is replace that $100 part versus allocating an additional $2000 and replacing the machine altogether.

I am the one who posted the 7% number. This is where I got it: According to a white paper jointly produced by the ATM Industry Council and Tremont Capital Group: "Independent deployers typically only make 6-7% margins after paying all expenses."

You can see Sam Ditzion interviewed on Bloomberg TV by clicking on the video box in the lower right hand corner of the website at http://www.tremontcapitalgroup.com/. You will see him state this figure. Tremont Capital is a financial firm specializing in financing and consulting with the ATM business and he is widely considered expert in the industry. Study his web site. On this video he breaks down the major expense categories of the business.

Given his position and the nature of his firm I found his estimate quite believable. In fact, I still find it believable. If you were actually returning 100% ROI per year as you claim, Warren Buffet should sell all his stocks and buy ATMs because neither he nor any of his businesses can come close to this level of return. I'm sorry, I don't find your claims believable. Can you explain why?

[ATMCompany2]

Somewhere someone mentioned an average ROI of 7%, citing some publication. That is way, way under the mark. We are looking at about 100% ROI per machine, per year on average. Thus, if a machine costs us $2000, we net about $2000 per year on the machine. From an accounting perspective, this isn’t entirely accurate as you have a declining asset (the machine). However, the machines are modular in design. Meaning if a card reader goes bad, all you have to do is replace that $100 part versus allocating an additional $2000 and replacing the machine altogether.

I am the one who posted the 7% number. This is where I got it: According to a white paper jointly produced by the ATM Industry Council and Tremont Capital Group: "Independent deployers typically only make 6-7% margins after paying all expenses."

You can see Sam Ditzion interviewed on Bloomberg TV by clicking on the video box in the lower right hand corner of the website at http://www.tremontcapitalgroup.com/. You will see him state this figure. Tremont Capital is a financial firm specializing in financing and consulting with the ATM business and he is widely considered expert in the industry. Study his web site. On this video he breaks down the major expense categories of the business.

Given his position and the nature of his firm I found his estimate quite believable. In fact, I still find it believable. If you were actually returning 100% ROI per year as you claim, Warren Buffet should sell all his stocks and buy ATMs because neither he nor any of his businesses can come close to this level of return. I'm sorry, I don't find your claims believable. Can you explain why?

Ditzion is a decent guy from a top-level perspective but he is completely off base here. He doesn't drill down the costs on the video. I specifically outline the ROI above in my example.

Buffet doesn't do this because he buys what he knows. This is a difficult business to run on a national level because for the small accounts (like a neighborhood bar), you have to run it with a local cash loader to be profitable. If you had the fixed costs of Brink's at a spot like that, you would be upsidedown down on the deal.

There is only 1 ATM company (Cardtronics) who did go public and a lot of their portfolio (60,000 plus machines) is due to prior acquisitions.

[JamesVincent]

Given his position and the nature of his firm I found his estimate quite believable. In fact, I still find it believable. If you were actually returning 100% ROI per year as you claim, Warren Buffet should sell all his stocks and buy ATMs because neither he nor any of his businesses can come close to this level of return. I'm sorry, I don't find your claims believable. Can you explain why?

I think, I may be incorrect, that the Tremont report was dealing with monthly and ATMCompany is talking about yearly. It also dealt with a $2 transaction fee and ATM is talking about a $4 fee. Like I had said before when you're dealing with any of the entertainment machines if they cant pay themselves off in a year then they aren't worth it. Too much money and effort to put into it to spend years waiting. Also the Tremont report is an average of the industry and any average is just that, an average. A company that does it's own setups and maintenance would have a higher profit margin then a small outfit or a mom and pop that has to call in a service company. Same thing with buying multiple machines at a time, of course your supplier is going to give you a discount for buying multiple machines, thereby bringing up your profit margin.

[Nationwideinvestor]

If you are a legitimate investor in Nationwide Automated Systems Inc (Joel Gillis) please be aware the company has now entered involuntary bankruptcy. We are organizing an investors group. Kindly provide to us you contact information. Email: [redacted by admin]
We are accepting agents of investors but ultimately poof of ownership will be required:

On behalf of the Nationwide Automated Systems Investor Group.

[MarvinGardens]

There is only 1 ATM company (Cardtronics) who did go public and a lot of their portfolio (60,000 plus machines) is due to prior acquisitions.

From their 2013 10k - Cardtronics earned $20,647,000 on revenues of $876,486,000 which according to my handy HP calculator works out to 2.36%.

I'm sticking with Ditzion. And "ATMCompany2" it's interesting that your figures are quite similar to those attributed to Joel Gillis. So he must be an honest dealer after all.

Unfortunately, it appears he has been forced into chapter 7 bankruptcy.

[worried]

All victims should REALLY, REALLY try and use this most recent lesson to them about the danger of just believing what people say... BE VERY CAREFUL, you've proven to a world full of scammers that you are a willing victim... Check everything, twice, through independent sources. DO NOT GIVE MONEY TO ANYBODY...

It happens with every disaster, large bankruptcy, etc., scammers move in promising to help, you just have to give them a payment up front... prove to yourself that you've actually learned a lesson, don't fall for it this time. Check it out THOROUGHLY, and don't ignore answers you don't like.... be suspicious of answers you DO like!...

Someone posted (MarvinGardens?) a while back a warning about wasting money on lawyers right now (despite my not-very-educated-advice to do just that). I would be very careful. You have to check on the credentials and history of any financial/legal professional you seek out (or sought YOU out...they may be legitimate, they may just need/want business, but YOU have to check to be sure).

I'm seeing several new posters with screennames that include the word 'investor'... I know you don't like to hear it, but you're not an 'investor' as far as you're involvment with NASI, you're a 'victim'. I think it's important to really come to grips with that. You were taken advantage of. You didn't exercise/perform/exhibit/"do" ANY 'due diligence', you only THOUGHT you did. It's an important shift in your mindset that you REALLY need to accept or else you're just going to repeat your mistakes...

[worried]

this is just an interesting factoid:

https://www.kccllc.net/msresort/documen ... 0000000003

NASI was one of a LONG, LONG list of unsecured creditors listed in this bankruptcy document from 2011...

Yes, I'm trying to dig up more dirt... I found it interesting that the NASI-Fuel Doctor connection I found is listed at the end of the SEC subpoena

[JamesVincent]

Yes, I'm trying to dig up more dirt... I found it interesting that the NASI-Fuel Doctor connection I found is listed at the end of the SEC subpoena

Money laundering? That's why it was owned by a shell corporation?

[webhick]

Also on the top of our monthly statements it states a different company
Electronic Processing Inc-XTRA Cash ATM, 8787 Complex Dr in San Diego. 858-712-1654

I checked the California Secretary of State's office on those two companies. Electronic Processing is not a registered business and neither is XTRA Cash ATM. XtraCash ATM (without a space) was but it's the legitimate operation out of NY and the name has been surrendered in the State of California.

I sincerely doubt that the real XtraCash is issuing any reports - especially in conjunction with a company that doesn't even exist.

[webhick]

Nationwideinvestor has been placed in moderated mode for spamming our forum with commercial solicitations...multiple times.

[worried]

Just a few thoughts from the perspective of someone who has been to a few of these shows before and how they often, in fact almost always, end.

If there was any legitimate business at all, it is a tiny part of what was claimed, and the longer a scam has run, the smaller that percentage is. Ponzi schemes grow exponentially, and therefore the liability to income ratio grows wider every day. When checks start bouncing, it's because there isn't any money left. Our previous poster clings to the "31,000" machines number, I'd be surprised if the actual number of machines is more than 10,000 and I wouldn't be at all surprised if its closer to 3,000. Just how these things go....

If a receiver is appointed, he's not going to attempt to run a business for years to attempt to make investors whole. If the business needs to be taken over by a government agency, its almost certainly insolvent and the receiver will try to, in as orderly a fashion as practicable, unwind and liquidate it. Operations, insomuch as there are any, will cease in short period and then will begin the very long and drawn out process of reconstructing just what happened and who made or lost how much. (oh, did anyone mention that these things almost never have complete records?)

Clawbacks, if sought, will be pursued from net winners and, well, if you paid taxes, they really don't care. If it is determined that you had any complicity (say, if you made commissions from bringing in new suckers) you still owe that tax (illegal income is still gross income and taxable after your other tax situations/deductions). Hint, if they say you need to pay them back, negotiate a deal early, they tend to take the low hanging fruit to clear out the inventory when they're just getting started, the longer you wait the worse your deal is going to be. In the last few cases I'm familiar with, the "threshold" amount they consider it worth going after is as low as $1000, so, if you're in profit, start planning for it now.

VERY IMPORTANT!!! If you're a net loser, resist any offers of people banding together to try to get more from the estate, or lawyers who say they can help you get your settlement sooner or get a larger amount. If a receiver is appointed, it'll take a long time (years) but in the end, when they dust settles, the net losers will all get paid at roughly the same time and at exactly the same recovery percentage, no lawyer or group is likely to get you more or get it sooner.

Okay, I'm tired, and I really have quite a bit more to say, but I'm going to ponder the matter a little bit more and see if shills start trying to cloud this up a bit. I just wanted to make a few quick points while I consider this a bit more.

ya know... in general, when somebody tells me "everything will be ok, give me your money", I tend to not believe them... when somebody tells me to be cautious, I tend to believe them...

nice work webhack!

[worried]

Yes, I'm trying to dig up more dirt... I found it interesting that the NASI-Fuel Doctor connection I found is listed at the end of the SEC subpoena

Money laundering? That's why it was owned by a shell corporation?

That's what I suspected, but that has to be a TINY tip of a BIG iceberg... I'm really ignorant in this area... I'm sure the authorities are MUCH, MUCH better at finding stuff, but it doesn't hurt to try to help. If ALL of you victims out there (and other interested parties like the capable/devoted people who run this forum, and MarvinGardens who I think has played a big part in busting this scam) used all your tools and resources, I'm SURE you'd find at least one or two extra tidbits that the SEC and/or FBI would appreciate you finding for them.