ATM LEASEBACK SCHEMES-- any insight?

[Jroger]

I am a new investor and I have read through this blog and one thing keeps bothering me. There appears to be two types of investors-- the 10 plus years investor and the 2 minus years one. I know a few of the 10 plus ones and for a number of years they mentioned the investment but never invited me to participate. Then all of a sudden, about two years ago I was suddenly invited to join. I am wondering how, all of a sudden these old time investors felt the need to bring in new investors like me? It was like a real "secret" push to get new investors. I would absolutely hate to think my "old" friends were sales people for a ponzi scheme but I cannot reconcile in my brain why I was suddenly approached to be told about this special secret no risk investment paying 25% dividends. The people that turned me on to this "opportunity" are my friends and I would hate to think there were salesman or getting commissions or had a clue about the real reality to get recruits like me. I do take responsibility for my own actions and I have lost over one half of my life savings with NASI.

[Nationwideinvestor]

I think the clawbacks will be the PRIMARY source of funds (if not the ONLY) for restitution of net losers. He was able to pay THOUSANDS of investors distributions over the last 4 years (statute of limitations) and at I would assume HALF of those were paid to net gainers having held numerous contracts (*machines*) prior to 2006. As I mentoned in prior post, these are *low hanging fruit*. Also, keep in mind there are still more net gainers from 2006-2009, depending on when they bought them. That's a LOT of MOOLA to be clawed back!

I don't think you're right in your assumptions. Ponzi schemes depend on new money growth, I have never seen one (and I've seen lots) that had 20% of the people/money involved represent people/positions in net profit. I had to figure this out once and a normal distribution would be about 88% out of profit. Looking at settled cases just that I happen to have figures for, the share of money returned to victims that comes from clawbacks is less than 10%. Even if the company has no assets to speak of and therefore clawbacks become the major source of refunds, it'll not amount to much. As I said, the only thing that allows a ponzi scheme to continue is new money growing at an exponential rate, so it has to follow that the overwhelming majority of money has to represent net losses.

You're missing a very important point here>>>
The determination of net losses can ONLY go back 4 years, so the universe of net losses is limited to that time period. Now, during this time we have a substantial group of net profiteers
who had been growing in #s for the previous 15 years prior to the cut off. Of course the monies from the recent losers had to cover the distributions to those older investors for the last 4 years or this would have ended long ago. True, the # of new contracts (not investors) has to, *in theory* , DOUBLE every 5 years to pay those earlier investors to break even point. So, *in theory* the # of CONTRACTS over the last 5 years would have to approximate the sum total of ALL previous CONTRACTS (aka *machines*). That means the #s in both these groups would be (ball park est) relatively equal.
Of course there are other factors that come into play...*commissions* and monies that went into Joel's pockets...but the majority of the Ponzi proceeds went into paying off previous investors. So *in theory* you can take from Peter to pay Paul. Just my take.

We were told that the statue of limitation depends first of all the state law. For example in California if the "intent to do harm" can be documented retrospectively the statue of limitations (for clawback) may be extended to go back 7 years. Also we are told there would be NO distinction between the SEC and bankruptcy court regarding this statue of limitation. Again in this case the more likely strategy to return funds to investors will be to deal with the banks and IRA certifier's that failed their regulatory mission. This responsibility will fall on the Trustee.

[Gregg]

We were told that the statue of limitation depends first of all the state law. For example in California if the "intent to do harm" can be documented retrospectively the statue of limitations (for clawback) may be extended to go back 7 years. Also we are told there would be NO distinction between the SEC and bankruptcy court regarding this statue of limitation. Again in this case the more likely strategy to return funds to investors will be to deal with the banks and IRA certifier's that failed their regulatory mission. This responsibility will fall on the Trustee.

I think the intent to do harm applies to the scam itself or a net winner who participated by recruiting while knowing it was a scam.
Talking about going after banks and IRA certifiers (which are the only ones mentioned so far with any money to go after) is something a bit beyond where any recent case I've seen has gone. CMMX has attempted to go after Wells Fargo but 7 years later that case is on the very edge of being dismissed because, well, it's pretty hard to prove that a bank should be able to tell a legit business from a fraudulent one, absent some pretty obvious signs. (like no expenses going out and lots of payments from "investors" coming in. See Banners Brokers for a good discussion of that in Canada and Ilse of Mann)

[JamesVincent]

I think the intent to do harm applies to the scam itself or a net winner who participated by recruiting while knowing it was a scam.
Talking about going after banks and IRA certifiers (which are the only ones mentioned so far with any money to go after) is something a bit beyond where any recent case I've seen has gone. CMMX has attempted to go after Wells Fargo but 7 years later that case is on the very edge of being dismissed because, well, it's pretty hard to prove that a bank should be able to tell a legit business from a fraudulent one, absent some pretty obvious signs. (like no expenses going out and lots of payments from "investors" coming in. See Banners Brokers for a good discussion of that in Canada and Ilse of Mann)

Not only that but all it takes is a look through the threads on here dealing with other Ponzis or Pyramids that went through a Federal receiver to see that little is actually brought back through clawbacks. Even though Kenneth Bell has been pretty aggressive in dealing with the Zeek Rewards fiasco the last notice I saw was that they were announcing each investor would receive 40% of their total investment minus any profits received before the receivership as an interim payment. Will there be other payments? Maybe. The only major clawbacks went against those who were found to be criminally liable for the scam itself, the major promoters and support staff. They ended up going after them in the tune of millions. Will they ever get that money? Doubt it, you can't take something that isn't there. They are doing clawbacks against net winners but, after, what, 3 years or so, they just filed it last month. It is still going through the court process. Not only have a lot of the promoters walked so far several of them fled the country and set up their own scams modeled after Zeek, AddWallet and Global Genesis among others.

In other words there is no guarantee that clawbacks will have any great effect. Most of the money that is being distributed through the Zeeks receiver came from seizing funds, clawbacks haven't even really started. And it has taken 3 or so years just to get to that point. Not only are you generating false hope that anything major will come from clawbacks, which historically they don't, you are not addressing the possible time table that investors are looking at. It won't be months, it won't even be a year or two, it will probably be 3 years or more before you see anything major. In the mean time these people are going to have to figure out how to live without that income, they are going to have to deal with issues created by this income loss, they are going to need help to get on with life. They don't need someone to play up the situation and blow smoke up their ass, they need people to be realistic. If anyone involved with NAS sees a penny from a settlement before 2017 I would be greatly surprised.

[Lost Income]

Seems strange that given the amount of time both the SEC and FBI have been investigating this, that they still have not found enough evidence to lock up Joel, Ed and their assets. The longer this continues, the more it suggests that there could be some legitimacy to NAS. I'm sure the SEC & FBI understands that the odds for recovering anything are reduced every day these guys are left on the streets.

[drgrey]

Though a newbie to this site, my wife and I have been owner/victims of Joel's ATMs since 2010. I've appreciated the many divergent views, opinions and advice expressed here. It's helped give us a deeper understand of the truck that has hit us, and some possible strategies for ourselves.

I'm a strong believer in group process and wish the organizers of the **************** Group would find a way to enable interested owners to access them through Google.

Nice try! But I have warned you all many times and I will not warn you again, STOP USING THIS BOARD TO RECRUIT TO POSSIBLE RELOAD SCAM INVESTOR GROUPS, the losers have suffered enough. And yes, I'm accusing people of nefarious purposes....

[Judge Roy Bean]

Though a newbie to this site, my wife and I have been owner/victims of Joel's ATMs since 2010. I've appreciated the many divergent views, opinions and advice expressed here. It's helped give us a deeper understand of the truck that has hit us, and some possible strategies for ourselves.

I'm a strong believer in group process and wish the organizers of the Nationwide ATM Owners Group would find a way to enable interested owners to access them through Google.

As was noted in earlier posts, getting together as a group may not help the majority of members of the group. My recommendation, for what it's worth, is to gather as much information as you can then consult with a local attorney experienced in finance, investments, leasing and taxation.

[MarvinGardens]

Seems strange that given the amount of time both the SEC and FBI have been investigating this, that they still have not found enough evidence to lock up Joel, Ed and their assets. The longer this continues, the more it suggests that there could be some legitimacy to NAS. I'm sure the SEC & FBI understands that the odds for recovering anything are reduced every day these guys are left on the streets.

You cannot arrest someone without evidence of a crime and so far the only thing they know for sure is that NASI stopped making payments to investors. (Actually, they know more than that but it is not enough.) This is not, in itself, a crime. It could just be a business failure or even a temporary cash flow problem. In order to prove systematic fraud they must at a minimum:

1. Compile a list of investors
2. Get a complete list of the serial numbers of all the machines
3. Match the serial numbers with the "owners."
4. Get a complete list of the places where the machines are supposed to reside
5. Verify that the machines exist and are where they are supposed to be.
6. Verify that no two investors "own" the same machine.

SEC has subpoenaed the data to start this process but NASI still has time to comply and extensions are not unusual. They have asked for a lot of data. They also plan to set up a web site where investors may make their claims and present additional information.

The audit does not have to be exhaustive before they can proceed, but it has to be a large enough sample that a pattern is highly probable before SEC will take action. And, SEC has no criminal enforcement power. If I recall, they must sue the operator in the state where they have determined that the operator is not in compliance with SEC regulations.

It is up to the FBI and state attorneys general to prove and enforce laws against criminal actions. SEC will share their information. But, if you look at that list required for a minimum audit, you can see that this is a long, tedious process and if this is a Ponzi scheme the perpetrators are likely to remain free for quite some time.

Really, we don't want the police to be able to arrest someone just because they heard from a third party that someone may have committed a crime. As I've said in previous threads, it is the huge difficulty in verifying these things that has protected NASI from the due diligence of professional investors and probably why there is a clause in the contract that individual investors may not contact the companies whose locations are where the ATMs are supposed to be placed.

There is little likelyhood that Gillis and Wishner are are going to be anything but free for some time. In the Ponzi schemes I'm familiar with, often the perpetrators don't do any time. They are fined, required to make some restitution if they can, lectured for operating an investment company without a license and told to stop doing those naughty things in the state where the charges were filed. Some go on to commit the same crime in a different location. Some, as has been pointed out, are serial offenders.

[notorial dissent]

To add to what JRB posted, you might also want to talk to your accountant or CPA, or consider that you may well need one, particularly depending on how deep you were in this investment. Whatever else, this fiasco is going to have some tax consequences that will have to be considered. And AGAIN, records, records, records. It has been pointed out that by several posters that the 1099's they got did not reflect what they were paid and this too can be an issue either in under or over reporting, as well as just in establishing proof.

In a perfect and stress free world, NASI would have kept meticulous records of what they took in and from whom and how much they paid out, and maybe their books would also show what they did with the surplus money. From what I have been hearing, particularly from the recent "investors", it doesn't sound like that was the case.

My suspicious nature says that the "boys" saw the light at the end of the tunnel, and it was the SEC investigation coming, and they tried to get as much in as they could before it all fell apart, hence the sudden burst of new members and the varying buy-ins. Which means that they may not have been keeping much in the way of records towards the end, and that is where documentation is going to be really really important.

I've heard varying stories from posters that Joe is still there, that Joe has skipped, so I really don't know what is going on in that arena. I would be surprised if they were still findable, but you never know on things like this.

The thing is, that if, but more likely when the SEC does file, follow their instructions and make sure you have copies of all your records to file a claim, otherwise, you guarantee you'll get nothing. A group may help you to vent your frustration and anger, but unless this goes differently than it appears to be going, or as these things inevitably go, they aren't going to be good for much else. One thing, DON'T give someone more money on the assumption that it will help you get more back, NEVER happens, and you'll just be out more money. The other thing is that the SEC moves at a glacial pace on things like this, although the bankruptcy will probably spur them to an expedited receivership, it won't really change much else. So it is going to take time, regardless.

[dawnth]

Snookered: Can you tell me how to get in contact with this group of investors? Thank you?

[Lost Income]

Thanks to everyone for your logic in this. Assuming that any new news will likely be posted immediately in this website, this site should be good for investors to monitor progress.

[grimreaper]

We were told that the statue of limitation depends first of all the state law. For example in California if the "intent to do harm" can be documented retrospectively the statue of limitations (for clawback) may be extended to go back 7 years. Also we are told there would be NO distinction between the SEC and bankruptcy court regarding this statue of limitation. Again in this case the more likely strategy to return funds to investors will be to deal with the banks and IRA certifier's that failed their regulatory mission. This responsibility will fall on the Trustee.

Yes, but that's for FRAUD conviction...felony. As far as the CLAWBACK exposure..it's 4 years.

[grimreaper]

[
Not only that but all it takes is a look through the threads on here dealing with other Ponzis or Pyramids that went through a Federal receiver to see that little is actually brought back through clawbacks. Even though Kenneth Bell has been pretty aggressive in dealing with the Zeek Rewards fiasco the last notice I saw was that they were announcing each investor would receive 40% of their total investment minus any profits received before the receivership as an interim payment. Will there be other payments? Maybe. The only major clawbacks went against those who were found to be criminally liable for the scam itself, the major promoters and support staff. They ended up going after them in the tune of millions. Will they ever get that money? Doubt it, you can't take something that isn't there. They are doing clawbacks against net winners but, after, what, 3 years or so, they just filed it last month. It is still going through the court process. Not only have a lot of the promoters walked so far several of them fled the country and set up their own scams modeled after Zeek, AddWallet and Global Genesis among others.

In other words there is no guarantee that clawbacks will have any great effect. Most of the money that is being distributed through the Zeeks receiver came from seizing funds, clawbacks haven't even really started. And it has taken 3 or so years just to get to that point. Not only are you generating false hope that anything major will come from clawbacks, which historically they don't, you are not addressing the possible time table that investors are looking at. It won't be months, it won't even be a year or two, it will probably be 3 years or more before you see anything major. In the mean time these people are going to have to figure out how to live without that income, they are going to have to deal with issues created by this income loss, they are going to need help to get on with life. They don't need someone to play up the situation and blow smoke up their ass, they need people to be realistic. If anyone involved with NAS sees a penny from a settlement before 2017 I would be greatly surprised.

I think this Ponzi is a lot less complicated to analyze as far as clawback goes. Seems very straight forward as far as tracking down all investors and their net status. Also, the # of investors is relatively small compared to say ZEEKS or Madoff. No banks, brokerage trades to sift with the exception of the *IRA* trustee (minor issue here). They religiously sent out 1099s and of course monthly statements...easy to take apart and determine *losers* from *winners* and the amounts. There are CPA specialist now that specialize in Ponzi and we have much more aggressive government investigation with *experience* in these matters than say 10 years ago. I KNOW FOR A FACT there are a significant # of those *in the money* over the 4 year period. I DON'T know the magnitude of the # of *losers* and the amounts, but I would be surprised if at least 50% of their loss isn't recovered in this situation via clawbacks.

[grimreaper]

Seems strange that given the amount of time both the SEC and FBI have been investigating this, that they still have not found enough evidence to lock up Joel, Ed and their assets. The longer this continues, the more it suggests that there could be some legitimacy to NAS. I'm sure the SEC & FBI understands that the odds for recovering anything are reduced every day these guys are left on the streets.

Watch. Indictment coming. It could take as long as 6 months to *dot all the "I s" and cross all the "Ts".

[The Observer]

I KNOW FOR A FACT there are a significant # of those *in the money* over the 4 year period.

Good, then share that fact with us so that we can evaluate and verify it as a fact. That means providing us with a list of the names of the investers for that 4 year period, the amount of money that they have received as earnings, and some independent documentation that verifies that those lists and numbers aren't just being pulled out of thin air or aren't based on what your best friend's mother's sister-in-law's cousin's next-door neighbor had told them.

Otherwise it isn't a fact, now matter how big or bold the font is.

[grimreaper]

In a perfect and stress free world, NASI would have kept meticulous records of what they took in and from whom and how much they paid out, and maybe their books would also show what they did with the surplus money. From what I have been hearing, particularly from the recent "investors", it doesn't sound like that was the case.

My suspicious nature says that the "boys" saw the light at the end of the tunnel, and it was the SEC investigation coming, and they tried to get as much in as they could before it all fell apart, hence the sudden burst of new members and the varying buy-ins. Which means that they may not have been keeping much in the way of records towards the end, and that is where documentation is going to be really really important.

Here's my Theory:
This has all happened 5 years after the stock marker collapse in 2009 from financial debacle back then.
So>>>investors either started to redeem machines and/ or there was a significant drop in recruiting NEW investors. This has now come to *roost* 5 years later which was earlier this year...the time it takes to pay new insestors back. Think of it as a *TSUNAMI* erupting 5 years ago and hitting our shores this year. Coincidence? Maybe

[grimreaper]

I KNOW FOR A FACT there are a significant # of those *in the money* over the 4 year period.

Good, then share that fact with us so that we can evaluate and verify it as a fact. That means providing us with a list of the names of the investers for that 4 year period, the amount of money that they have received as earnings, and some independent documentation that verifies that those lists and numbers aren't just being pulled out of thin air or aren't based on what your best friend's mother's sister-in-law's cousin's next-door neighbor had told them.

Otherwise it isn't a fact, now matter how big or bold the font is.

I am not going to divulge personal info.

[JamesVincent]

Zeek had an estimated 160k investors, at least that is the number that has entered complaints into the receiver. They are going after approx. 9,400 net winners for clawbacks. And 10 major ones. And that includes the net winners that netted $100 or more in profit. You have to be able to prove criminal intent to be liable for clawbacks and that really doesn't happen that much. I have a good friend that got caught up in the whole Zeek scam and have followed it quite a bit.

[grimreaper]

Zeek had an estimated 160k investors, at least that is the number that has entered complaints into the receiver. They are going after approx. 9,400 net winners for clawbacks. And 10 major ones. And that includes the net winners that netted $100 or more in profit. You have to be able to prove criminal intent to be liable for clawbacks and that really doesn't happen that much. I have a good friend that got caught up in the whole Zeek scam and have followed it quite a bit.

Not true! Innocent investors (*good faith*) are liable for any profits made over and above the initial investment that are within the statute of limitations period.

[Gregg]

Seems strange that given the amount of time both the SEC and FBI have been investigating this, that they still have not found enough evidence to lock up Joel, Ed and their assets. The longer this continues, the more it suggests that there could be some legitimacy to NAS. I'm sure the SEC & FBI understands that the odds for recovering anything are reduced every day these guys are left on the streets.

The time between the beginning of an investigation and arrests is sometimes measured in years. And if they get a restraining order or injunction that stops the fraud they get in even less of a hurry. The wheels of justice turn slowly....but they're damn hard to stop.