ATM LEASEBACK SCHEMES-- any insight?

[webhick]

Someone commented on the blog that they received an email from a different receiver. The receivership site does not list anyone but William Hoffman.

[Lost Income]

I was directed by an operator to leave a voice mail for a different receiver as well. Also, no one from the SEC ever returns voice mails or e-mails, and neither does the lawyer Brody whom is supposedly representing other investors. Makes me wonder how much of all this is bullshit fabricated by Joel & Ed to buy time for their get away.

[notorial dissent]

Webhick is exactly right about the difference between a bankruptcy and a receivership. In all likelihood, there won't be much action of any kind until after the show cause hearing later this month, then depending on what comes out of that there will be more documents. My expectation is that the "boys" attorney is going to make some kind of attempt to get them out of this and block the receivership as that is SOP, I also don't expect anything to come of it, but it could drag things out a bit depending on the judge. Once something reaches this stage there is only one ultimate outcome. Mostly, once the TRO becomes permanent then the receiver will start his official inventory and then eventually produce a status report for the court, and until then there won't be much. There will have to be a report of the corpus, and a plan of action, all of which have to be received by and approved by the court before he can actually do anything, probably in about 3-6 months. This could move pretty quickly, but I wouldn't count on it, as my experience is that these things take lots of time, regardless of how simple they might seem to be. Now some of this will depend on what the "boys" attorneys do and file, and their filings could get quite entertaining, but I don't expect the injunction to be dropped or things to even marginally change for them, but mostly it is just the way they run.

At his point I am more interested in what the "boys" file than what the receiver does as that is all going to be pretty cut and dried and similar to all other actions of this kind.

I would be more than a little leery of any communication I got that wasn't in the form of a letter on stationary from the receiver. Until you have been officially notified you haven't been notified and anything else is suspect. They will send you official notification by mail at the last known address they have. General information should be posted on the website, and probably will be sent out as email updates once the receivership is official, but not until then, and only after everything has been verified.

[grimreaper]

Just a *re-arranging* of deck chairs on the Titanic. Outcome is inevitable.

[Jroger]

Who is lawyer Brody?

[Lost Income]

From documents posted in this blog prior, below is representing several investors in the BK.


LAW OFFICES OF ALAN F. BROIDY, AF c
Name of Attorney Firm (If any)
1925 Century Park East, 17th Fl.. LA, CA 90067
Address
(310) 286-6601

[Tednewsom]

[Nationwideinvestor]

I was directed by an operator to leave a voice mail for a different receiver as well. Also, no one from the SEC ever returns voice mails or e-mails, and neither does the lawyer Brody whom is supposedly representing other investors. Makes me wonder how much of all this is bullshit fabricated by Joel & Ed to buy time for their get away.

Mr. Broidy represent the claimants of the bankruptcy filing only. He has no obligation to speak with other investors at this time. The SEC receiver will be answering inquires in due time. These sorts of public comments are irresponsible and serve to scare people. In view of 2500 investors who are scared and in view of the meticulous documents you have already read and commented on, perhaps you could refrain from these sorts comments.

[Nationwideinvestor]

Webhick is exactly right about the difference between a bankruptcy and a receivership. In all likelihood, there won't be much action of any kind until after the show cause hearing later this month, then depending on what comes out of that there will be more documents. My expectation is that the "boys" attorney is going to make some kind of attempt to get them out of this and block the receivership as that is SOP, I also don't expect anything to come of it, but it could drag things out a bit depending on the judge. Once something reaches this stage there is only one ultimate outcome. Mostly, once the TRO becomes permanent then the receiver will start his official inventory and then eventually produce a status report for the court, and until then there won't be much. There will have to be a report of the corpus, and a plan of action, all of which have to be received by and approved by the court before he can actually do anything, probably in about 3-6 months. This could move pretty quickly, but I wouldn't count on it, as my experience is that these things take lots of time, regardless of how simple they might seem to be. Now some of this will depend on what the "boys" attorneys do and file, and their filings could get quite entertaining, but I don't expect the injunction to be dropped or things to even marginally change for them, but mostly it is just the way they run.

At his point I am more interested in what the "boys" file than what the receiver does as that is all going to be pretty cut and dried and similar to all other actions of this kind.

I would be more than a little leery of any communication I got that wasn't in the form of a letter on stationary from the receiver. Until you have been officially notified you haven't been notified and anything else is suspect. They will send you official notification by mail at the last known address they have. General information should be posted on the website, and probably will be sent out as email updates once the receivership is official, but not until then, and only after everything has been verified.

These sorts of comments are speculative and unprofessional. More likely than not there are current discussion between the US Trustee (Bankruptcy Court) and the SEC receiver to determine a course of action, and single jurisdiction that is most likely to benefit all. The FBI does in fact have the plaintiffs under surveillance for flight risk as reported to investors who volunteered such discussions. The available public documents speak volumes with regards to the limited defense the plaintiffs have. The key is to keep them cooperating to benefit the victims which is more importance than vengeance.

[Lost Income]

Sorry, but until someone from the SEC, FBI, Etc actually offers a reply to an email or phone message sent to them, all comments in here so far are helpful but speculative.

[The Observer]

The FBI does in fact have the plaintiffs under surveillance for flight risk as reported to investors who volunteered such discussions.

This is an interesting statement. If it is indeed a fact, as you claim, then please provide proof of that. Otherwise, I think you are just making unprofessional speculative comments. Because "volunteered...discussions" are hearsay and are not necessarily factual.

[Tednewsom]

helpful but speculative

I may put that on my business card.

[Lost Income]

NEWS FLASH....I finally had a phone conversation with a human whom is part of the Receiver Team, which was very refreshing. The Receiver is not Bill Hoffman only, he has others working with him. I asked what investors will do regarding a 1099 and confirmation of NAS status for 2014, for providing to our tax accountants at the year end, and was told that we will be receiving direction on this.

[webhick]

The FBI does in fact have the plaintiffs under surveillance for flight risk as reported to investors who volunteered such discussions.

This is an interesting statement. If it is indeed a fact, as you claim, then please provide proof of that. Otherwise, I think you are just making unprofessional speculative comments. Because "volunteered...discussions" are hearsay and are not necessarily factual.

It's a little two-faced when you accuse others of speculation and then immediately start your next sentence with "more likely than not."

NWI's behavior is a good chunk of what makes this involuntary bankruptcy smell fishy. First was the public solicitation, followed by a warning that he wasn't allowed to use the forum to solicit, then he sent solicitation PMs out to a bunch of people on the thread (conveniently leaving me out), misuses the reporting system to alternately bitch about losing his ability to PM and apologize for his behavior while asking for the PM ability back and when he doesn't get it back, he disparages any opinions contrary to the IB, accuses us of scaring people (even when opinions presented are by people who have experience at this), and occasionally trots out the legal opinion of a fabled team of lawyers in order to convince others that he's right.

I half-heartedly wonder if trying to scare victims away from the SEC receivership could be seen as a violation of the restraining order.

[webhick]

helpful but speculative

I may put that on my business card.

You should put it in your signature.

[Tednewsom]

I may make it my signature, just change my name. It's easy to remember, and everybody always misspells Newsom.

[grimreaper]

New Article>>>

http://www.compliancebuilding.com/2014/ ... -security/

Can an ATM Machine Be a Security?
Published by Doug Cornelius on October 15, 2014 at 8:00 am in What is a Security?


"Nationwide Automated Systems offers turnkey ATM solutions. A turnkey ATM program addresses the need for ATM service, repair, system monitoring, and cash replenishment. Typically the ATM provide will split some of the fee income with the property owner where the ATM is located rather than pay a fixed rent.

To raise capital Nationwide create a sale-leaseback with third party investors. The investor buys the machine from Nationwide, then leases it back to Nationwide for ten years in return for rent. The rent is payable as $0.50 per approved transaction.

The Securities and Exchange Commission claims that Nationwide did not actually own the machines is was selling and was generating very little revenue from ATM transactions. The SEC is accusing Nationwide of using new investor investments to pay old investors’ guaranteed returns. The SEC slapped the Ponzi label on Nationwide.

According to the SEC complaint, there was fraud. Nationwide had entered into more than 31,000 ATM sale-leaseback transactions. The SEC investigator only found records of Nationwide owning a few hundred. The SEC also found records of Nationwide selling the sale ATM machine to multiple investors.

Even if there is fraud, the Securities and Exchange Commission can only get involved if there are securities. The SEC needs to prove that the sale-leaseback arrangement was essentially an investment contract. That leads back to some derivation of the Howey case to determine if there is an investment contract, and look at whether there is

an investment of money,
a common enterprise,
a reasonable expectation of profits, and
a reliance on the entrepreneurial or managerial efforts of others.

The SEC latched onto a non-interference provision in the leaseback. The ATM owners are prohibited from interfering with operations of the ATM or contacting the locations where ATM is located. That provision is to keep busybodies from showing up at the ATM location and making a nuisance of themselves.That didn’t prevent one suspicious investor from calling the location where her ATM was located, only to have the hotel manager tell her there was no ATM as the hotel.

For a legitimate arrangement that non-interference provision is a perfectly valid provision. The SEC is interpreting it as part of the fraud.

I think this case will hinge on the provisions in the ATM lease. If the investor has some right to end the lease and do something else with the machine, then this is a real estate transaction and not a securities transaction. That means the SEC is out of the picture and the California authorities would need to step in.

The big sign of fraud is the guaranteed return. No investment should have a guaranteed return of 20% per year over 10 years.

The other sign is the cost of the machine. You can buy a basic ATM machine for $2,000. Nationwide is getting a big markup on the sale part of the sale-leaseback.

Nationwide ran into trouble in August when it ran out of cash and bounced checks to investors.

According to the SEC complaint, from August 20 to September 8, 2014 Nationwide deposited almost $4 million into its bank account. Only $52,463 was from ATM transaction revenue. During that same time frame, Nationwide paid over $2 million in “guaranteed” lease payments to existing investors.

I’m impressed with how quickly the SEC brought this case one the checks starting bouncing."



Now, the investor is >>GIVEN THE RIGHT TO SELL THE MACHINE BACK! There is no provision for the investor to *take possession* of the ATM. Of course all this is moot, because there were no ATM to *take back*, since they were phantoms in the first place, If I'm wrong on this, I would like someone here to let us know.

[The Observer]

NWI's behavior is a good chunk of what makes this involuntary bankruptcy smell fishy

That, and the fact that Joel and Ed basically rolled over like dead carp and exposed their bellies within two minutes of it being filed - well two minutes is an exaggeration, but you get my drift.

Of course, this is just idle and unhelfpful speculation on my part. I bet that NWI has all the correct and factual hearsay that could clear this issue up in a wink of an eye.

[webhick]

NWI's behavior is a good chunk of what makes this involuntary bankruptcy smell fishy

That, and the fact that Joel and Ed basically rolled over like dead carp and exposed their bellies within two minutes of it being filed - well two minutes is an exaggeration, but you get my drift.

Of course, this is just idle and unhelfpful speculation on my part. I bet that NWI has all the correct and factual hearsay that could clear this issue up in a wink of an eye.

Yeah, timelines and such. TRO applied for on 9/16, IB filed on 9/19, Joel & Ed rolls over on 9/24, Ed moves his house to his wife's name on 9/25, documents filed with bankruptcy court declaring the roll-over on 9/30 - the same day the TRO goes through and then on 10/6 the roll-over is re-filed with the communication from Joel & Ed's lawyer as Exhibit 1. Granted the TRO was sealed, and it could be a coincidence that this all went down at the same time, but I don't know...

Also, you'd think that NWI could get the lawyer's name right? It's Broidy, not Brody.

[webhick]

Now, the investor is >>GIVEN THE RIGHT TO SELL THE MACHINE BACK! There is no provision for the investor to *take possession* of the ATM. Of course all this is moot, because there were no ATM to *take back*, since they were phantoms in the first place, If I'm wrong on this, I would like someone here to let us know.

From the minutes to the TRO, emphasis added:

At the end of the 10-year term, investors had the option of automatic renewal for additional 3-year periods, or, with 60 days advance notice, to have their ATM delivered to them or the full amount of their initial investment returned.

I don't think that bit of wording matters. The SEC has had no problems going after other leaseback scams and no doubt they had similar wording. After all, the wording itself is part of the scam. "Hey, why would you have the option of parking that ATM in your living room if it didn't really exist?"

Also, the article is inaccurate in wording. It says that the money paid out by NASI was rent. It was not. It was a return on the investment.