ATM LEASEBACK SCHEMES-- any insight?

[Arthur Rubin]

Clearly ones's recent (within 1 year) "profits" are at risk of "clawback" but what about any return of investment, especially if it was not long after the initial investment (within 3-6 months)?

That's not the way I read the discussion. If you have an over-all profit, then any money you received recently is subject to clawback.

[JamesVincent]

Clearly ones's recent (within 1 year) "profits" are at risk of "clawback" but what about any return of investment, especially if it was not long after the initial investment (within 3-6 months)?

Thoughts?

When you get into things like this you start talking about net winners and net losers. A net winner is one who showed a profit beyond their initial investment, a net loser is one who did not receive a profit and, in fact, lost money on the investment. An example would be if you had invested in NAS two years ago, at the cost of $12k, you would have made $4,800 and would be in the hole for $7,200 which would make you a net loser. Someone who had been involved for 5 years and invested at $12,000 would have made their money back and possibly slightly more. That would make them a net winner since they had profited on the initial. That profit beyond the initial is what is subject to clawback. We will have to wait to see exactly how far they are going back and what exactly they plan on doing but that is the general idea.

Edit: Found an interesting article about a Canadian Ponzi and some of the actions dealing with net winners and net losers. http://www.lexology.com/library/detail. ... 121e9e37d5

When a Ponzi scheme collapses, as with musical chairs, there will be some investors with a place to sit, while others are bereft of such comfort. Unlike musical chairs, the first time the music stops for most Ponzi schemes, the majority of the participants are on the losing end. A recent British Columbia decision in the Bankruptcy of Rashida Abdulrasul Samji explored what happens when some of the fortunate few “winners” in an alleged Ponzi scheme negotiate a resolution with a bankruptcy trustee responsible for making decisions in the best interests of all the creditors of the bankrupt entity at the centre of the alleged scheme.

[The Observer]

And don't forget that there are going to be "net winners" on their first go around who sunk more money into NASI based on the fact that the "return" payments were coming in on schedule. I suspect that there are going to be very few "net winners" when the dust settles. And out of those "net winners", their gains are going to be minimal, resulting in relatively small clawbacks awarded. And from those, don't be surprised to see some who cannot pay.

[JamesVincent]

And don't forget that there are going to be "net winners" on their first go around who sunk more money into NASI based on the fact that the "return" payments were coming in on schedule. I suspect that there are going to be very few "net winners" when the dust settles. And out of those "net winners", their gains are going to be minimal, resulting in relatively small clawbacks awarded. And from those, don't be surprised to see some who cannot pay.

It would be interesting to see how they are going to work the return investor and how they are going to determine the net profit/ loss. If you had been one of the investors who bought in 5 years and your initial had been returned and decided to sink more in last year, are you going to be a net winner since your initial investment had returned or are you going to be a net loser since your TOTAL investment is still at a loss?

[The Observer]

BeverylyHillsMan is lucky he didn't give out his real name. Who in the hell would want to do business with such a self-righteous (but WRONG), pompous, ASS?!

SomeYuppie, ... I think SomeYuppie is probably safe and secure in his/her fantasy world no matter what happens...

And there is a possibility that either of these people, or even bother, were shills or principals of NASI and were hoping to counter the posts appearing here about NASI being a Ponzi scam.

[MarvinGardens]

Has anyone on this thread discovered how "commissions" to sales people ( or bonuses, consulting fees, finders fees, whatever you want to call them when investors bring in their friends and acquaintances ) are handled by the receiver in other Ponzi schemes? Does claw back apply here?

My client, who brought this investment to my attention, has been referring people for many years who have purchased numerous contracts and he has piled up hundreds of thousands of dollars in referral fees. I'm curious as to what his position might be since those commissions, obviously, came from new investors. And, I wonder if fees were paid when investors he brought in previously purchased new contracts.

I know some of that money went back into new contracts, he was a true believer, and that money is probably gone or will be heavily discounted. But some of it, I know, was not reinvested.

I'm not looking for opinion here, I can speculate on my own, I just wonder if anyone has run across a case where this has been reported. A few of you seem to have superior legal research skills and I'd appreciate knowing about anything you may have found that's relevant.

[grimreaper]

And don't forget that there are going to be "net winners" on their first go around who sunk more money into NASI based on the fact that the "return" payments were coming in on schedule. I suspect that there are going to be very few "net winners" when the dust settles. And out of those "net winners", their gains are going to be minimal, resulting in relatively small clawbacks awarded. And from those, don't be surprised to see some who cannot pay.

I can tell you that I KNOW several investors with potential clawbacks exceeding 100K, since they had net profits for the last 4 years (the statute of limitations in Ca) and owned 10-20 *ATMS*. Now, just how much net losers will get is hard to so say at this point, but I would think it could be 50%. Yes, there will be some who can't payback the clawback and they will have assets (including homes) taken from them when possible. It going to be truly devastating for sure.

[JamesVincent]

Has anyone on this thread discovered how "commissions" to sales people ( or bonuses, consulting fees, finders fees, whatever you want to call them when investors bring in their friends and acquaintances ) are handled by the receiver in other Ponzi schemes? Does claw back apply here?

Referral fees, incentives, whatever you want to call them, have always been subject to clawbacks in the Ponzis I have looked at as they are profit not involved in an investment. Whether or not they can attach all of it or a percentage I could not hazard to guess.

Edit: Forgot to add that the monies paid out are still investors monies which is the whole purpose behind a clawback, to recover the investors monies and redistribute it to the net losers. In Zeek the higher ups were slammed with paying back everything they had received as a result of their time with Zeek, in the Stanford case the receiver went after any bonuses or commissions that had been paid to brokers for recommending investment in Stanford's investment group. Both of which are still in litigation.

[grimreaper]

And don't forget that there are going to be "net winners" on their first go around who sunk more money into NASI based on the fact that the "return" payments were coming in on schedule. I suspect that there are going to be very few "net winners" when the dust settles. And out of those "net winners", their gains are going to be minimal, resulting in relatively small clawbacks awarded. And from those, don't be surprised to see some who cannot pay.

It would be interesting to see how they are going to work the return investor and how they are going to determine the net profit/ loss. If you had been one of the investors who bought in 5 years and your initial had been returned and decided to sink more in last year, are you going to be a net winner since your initial investment had returned or are you going to be a net loser since your TOTAL investment is still at a loss?

I know people in this category. You simply have to break it down into *components*. If it's CA, then then they can reach back 4 years of distributions (2010 June?). You then have to break down what contracts were responsible for each those distributions. You don't start to be a *winner* until after the 5 year period of owning *ATM*, so some contracts may result as a partial *loss* and others, say that go back MORE than 5 years (2005) from beginning of reachback in 2010 will, by definition be net *winners* for the entire reach back period (2010- 2014) of 4 years.

[grimreaper]

Tednewsome:
I apologize if I was not clear enough...my questions stated that the investment was, in fact, returned...your response does not take that into account.
Asked a different way: If someone were to have been fortunate enough to receive their investment back, would this distribution be subject to forfeiture?

I know someone who sold some *atms* back and got the money. It's a *zero sum game* so you won't be able to claim that as an initial invesment to offset ALL the distributions that resulted and so you will have to forfeit ALL DISTRIBUTIONS THAT RESULTED from those.

[imnewhere]

Let's try this again and keep it simple:

If someone invested in the past year then was paid back in full, would the "distribution" (payback of investment) be subject to clawback?

I completely understand any "profit" checks would be subject to clawback.

[Tednewsom]

Nobody here is simpler than me, so let's see if I get it. Let's say in January 2013, I bought an ATM for $19,800. A couple months later I started to get monthly checks for $333. That goes on for a year and I have in hand $3996 of supposed "profits," actually my own money dribbled back at me.

I get wise in January and cash out, saying, "Take your machine back and give me back my money." I get the remainder, $15,804. I'm at zero-- no money at risk in their pockets, no "overage" in mine.

So the question is, is this payback considered recoverable by the bankruptcy proceeding? And I'd certainly say, "No. Overages, yes, but not the initial investment." Any other answer seems illogical.

[Burnaby49]

Ugh. I'm not liking this Yahoo group thing. Not public enough and people are randomly unable to see files. People are also not so chatty, which makes the conversation portion of the group pointless. Will be switching to a Wordpress blog sometime today, as I got a promotion at work and need to write up some notes for training for work tomorrow.

I already reserved nasivictims.wordpress.com, 'cause you snooze you lose.

Congrats on the promotion.

[imnewhere]

No Tednewsome.

You invest $ 12,000 in January 2013 and receive $ 3600 that year then ask and receive your $ 12,000 back...I am assuming you would agree that the $ 3600 can be clawed-back but the $ 12,000 not... but some may think the $ 12,000 is still at risk even though it is a return of investment.

Does anyone here (with knowledge) believe that the $ 12,000 return could be in jeopardy?

[MarvinGardens]

Has anyone on this thread discovered how "commissions" to sales people ( or bonuses, consulting fees, finders fees, whatever you want to call them when investors bring in their friends and acquaintances ) are handled by the receiver in other Ponzi schemes? Does claw back apply here?

And the answer is: It depends on the case law in the state where the action is brought.

Here is a very interesting report on Ponzi Scheme clawback: http://bit.ly/1uqK0a3

I haven't had time to review it all, but it quotes a lot of case law and is a product of Loyola Law School. It discusses the importance of knowledge, or reasons that one should know, that the program is a Ponzi scheme. It is interesting that one of the tests about whether or not you should have recognized a program as a Ponzi scheme is if it promises to pay 15 - 20% per year.

[MarvinGardens]

No Tednewsome.

You invest $ 12,000 in January 2013 and receive $ 3600 that year then ask and receive your $ 12,000 back...I am assuming you would agree that the $ 3600 can be clawed-back but the $ 12,000 not... but some may think the $ 12,000 is still at risk even though it is a return of investment.

Does anyone here (with knowledge) believe that the $ 12,000 return could be in jeopardy?

With all due respect, you are asking for a legal opinion from a qualified practitioner who specializes in Ponzi scheme clawbacks. This is a public discussion board for parties interested in illegal schemes. Anyone here who was truly qualified to answer your question definitively, would not do so.

There are law firms that have a specialty in these matters. Search for them on Google. Call some, vet them and pay them. Try wading through the document I've pasted above. Maybe your answer is there. But you need to do your own research - just as we have.

[JamesVincent]

No Tednewsome.

You invest $ 12,000 in January 2013 and receive $ 3600 that year then ask and receive your $ 12,000 back...I am assuming you would agree that the $ 3600 can be clawed-back but the $ 12,000 not... but some may think the $ 12,000 is still at risk even though it is a return of investment.

Does anyone here (with knowledge) believe that the $ 12,000 return could be in jeopardy?

I'll make it even easier then Ted. Let's assume for this example that everyone paid $12,000 for their investment. Since that number will be a common denominator let's make it $0 and that's your starting point. If you have negative balance then you have loss of investment. If you have a positive value then everything that is positive is subject to clawback. The purpose of a clawback is to try to make every investor as close to the $0 value as possible.

[grimreaper]

Nobody here is simpler than me, so let's see if I get it. Let's say in January 2013, I bought an ATM for $19,800. A couple months later I started to get monthly checks for $333. That goes on for a year and I have in hand $3996 of supposed "profits," actually my own money dribbled back at me.

I get wise in January and cash out, saying, "Take your machine back and give me back my money." I get the remainder, $15,804. I'm at zero-- no money at risk in their pockets, no "overage" in mine.

So the question is, is this payback considered recoverable by the bankruptcy proceeding? And I'd certainly say, "No. Overages, yes, but not the initial investment." Any other answer seems illogical.

The person I know got the FULL amount of his original purchase back. He still retained 1/2 of his *ATMS*. They didn't deduct any distributions. Thats what the contract states as well. After 2 years they will buy it back for what you paid for it. So, in your case he gets $19800 back (if he was so fortunate to be able to do so). Now he's subject to a clawback of the ENTIRE distributions he received from that ATM. The #s are the same, just not the buy back amounts. In essence no one can EVER PROFIT from a ponzi,,,there ARE NO WINNERS! What they attempt to do is equalize everyone back to their ORIGINAL INVESTMENT. The only caveat is that they can only reach back for distributions to whatever the statute of limitations dictates (say 4 years). So those who got in relatively EARLY (prior to 2005 or so) will be *protected* from clawbacks for all distributions PRIOR TO 2010. They are essentially *grandfathered* and can retain those profits. Lucky them.

[Tednewsom]

I see. And in a lot of ways, that stinks.

[grimreaper]

Landmark Decision:

http://www.lexology.com/library/detail. ... a9523418d0

Next, the court addressed the investor-defendants’ argument that they should be permitted to keep their contractually-guaranteed interest payments for which they asserted they paid reasonably equivalent value. Under TUFTA, a transfer is not voidable against a person who took in good faith and for reasonably equivalent value. Value is given if, in exchange for the transfer, an antecedent debt is secured or satisfied. Here, the CDs issued by Stanford were void and unenforceable, invalidating any contractual claim to interest; thus, the court concluded the investors failed to provide any value for the interest payments that they received. The court explained that, in the context of a Ponzi scheme such as Stanford, each payment of interest to an investor (made possible by a later investor’s deposit) decreases the net worth of the entity operating the scheme. Accordingly, the district court’s grant of partial summary judgment in favor of the Receiver on its TUFTA claims was affirmed. Notably, the Fifth Circuit agreed with the district court’s conclusion that the investors did give reasonably equivalent value to the extent that they received back their principal because they have actionable claims for fraud and restitution. Thus, in contrast to the interest payments, the principal payments were payments of an antecedent debt.