ATM LEASEBACK SCHEMES-- any insight?

[webhick]

The document indicates that there were employees, and that NASI has basically provided them with a lawyer and then some other lawyer says that the employees are pleading the 5th. First of all, that second dude isn't their lawyer so he can just suck it and secondly, I have a bad habit of listing my points numerically.

If I was a NASI employee, I'd get my own damned lawyer and spill everything. I mean, assuming that the employees weren't somehow kept in the dark. But that would require that Joel and Ed were smart enough to keep the scam running 20 years without looking fishy to the people they see nearly every day. And it would also assume that I hadn't died from the guilt from not turning the frauds in.

[grimreaper]

So after reading the PDF .. there is currently about $500k sitting around on an approximately 120 Million dollar scam... with say $100k per month to be received from the current existing ATMS. (Until they are sold/dispensed with to reclaim value) This on pure mathematics.. seems to be (from the listed 2450 'investors' etc.. AND not knowing the others that could show up) seems to be that .. at best .. current funds to be returned will be about 1/100th of the investment value.. so on a $20,000 purchase, those who did so, will probably get back, about $200 .. Just trying to prepare people for the worst. Such a sad sad state of affairs, you would think that these scammers would have at least hidden $1 mil somewhere.. for a rainy day.. (Do I see clouds on the horizon)

You left out the fact that they will seek clawback litigation. That will be significant, since it will be only doled out to net losers...not all investors.

[The Observer]

You left out the fact that they will seek clawback litigation. That will be significant.

Hardly. You are leaving out the fact the 4 year statute of limitations removes 80% of the available years to recover from. One must also consider that most of the funds coming in during these last four years were being paid to mostly to the net loss customers in this scam. Looking at one investor and speculating that they raked in millions of dollars during that 4 year period, even if true, does not give an accurate picture of what the actual payout will be on a per capita basis. And you haven't even started considering what "net winners" will be doing in the meantime to position themselves as judgment proof (and there are legitimate ways to do this for the price of a lawyer).

And oh, the receiver will be taking fees for its administration right off the top of any assets of NASI before there are disbursements to the victims. You haven't provided for that in your speculation. In fact, all you are doing is speculating and not providing any facts except crowing about the fact that clawback litigation exists. That alone does not mean that significant payouts will happen. Get some figures that can be verified and then we can see what "significant" really means. Otherwise, you will be like Beverlyhillsman and disappear once the payouts actually happen and everyone starts wondering why 5 cents on the dollar should be seen as "significant."

[grimreaper]

You left out the fact that they will seek clawback litigation. That will be significant.

Hardly. You are leaving out the fact the 4 year statute of limitations removes 80% of the available years to recover from. One must also consider that most of the funds coming in during these last four years were being paid to mostly to the net loss customers in this scam. Looking at one investor and speculating that they raked in millions of dollars during that 4 year period, even if true, does not give an accurate picture of what the actual payout will be on a per capita basis. And you haven't even started considering what "net winners" will be doing in the meantime to position themselves as judgment proof (and there are legitimate ways to do this for the price of a lawyer).

And oh, the receiver will be taking fees for its administration right off the top of any assets of NASI before there are disbursements to the victims. You haven't provided for that in your speculation. In fact, all you are doing is speculating and not providing any facts except crowing about the fact that clawback litigation exists. That alone does not mean that significant payouts will happen. Get some figures that can be verified and then we can see what "significant" really means. Otherwise, you will be like Beverlyhillsman and disappear once the payouts actually happen and everyone starts wondering why 5 cents on the dollar should be seen as "significant."

*Significant* means at least 20%+ in my mind. .... 10% or less would be *INSIGNIFICANT*.
Just my take. My first hand knowledge of 7 investors shows them to be net winners and the potential clawback for them ranges from 100% of profits to over 50% in a 4 year clawback period from 2010-2014. I say POTENTIAL, because some investors may be unable to come up with all funds demanded in a clawback. There will be FAR LESS than 2400 who will be getting funds, since only net losers are eligible, so the PER CAPTA basis will allow spreading these potential funds over a much smaller #.

Hardly. You are leaving out the fact the 4 year statute of limitations removes 80% of the available years to recover from

The PROFITS don't extend ALL the way back. It takes 5 years to realize a profit, so the earliest profits were realized in 2003. Also, there are many with profits that didn't come to fruition until many years later. They can take back ALL PROFITS to the extent of the total distributions taken in the 4 year period of 2010-2014. So you're NOT eliminating 80% of the PROFITS here.

[Tednewsom]

"See, if it doesn't jell, it isn't aspic, and this ain't jelling. It's not coming together. Something's missing."-- Detective Arbogast (Martin Balsam) in PSYCHO (1960)

Bear with me, friends. Financial naïf that I am, I was right about my original suspicions in almost every way, but now I've got a broader question. Why did these guys do this-- how did they do it -- why did they continue to do it -- and what is really going on?

To be polite, neither Wishner nor Gillis is a brain surgeon or a rocket scientist. Based on the SEC description of their office and of their record-keeping, Wishner is not even a competent accountant. Maybe Gillis had been an adequate insurance salesman, but as a financial wizard, he stinks. Several times through these pages, people with a firm grounding in finance have dealt with him and seen through his rap. Either that, or when confronted with simple questions he can't answer from people doing just basic due diligence, he grabs his hat and runs. No fast talk, no slick sales pitch, no easily-available explanations-- he just refuses to answer the phone.

The Receiver's exam of what's left now shows bare cupboards. A multi-million dollar interstate enterprise with less than a half-million left; the two (alleged) head crooks who might have a couple million dollars in assets between them but damned little liquid capital. The SEC estimates their office equipment & furniture as worth less that $10,000-- jeezus, I've got stuff worth more than that in my living room. If just the information on their last year's activities is accurate, over a hundred million dollars passed through NASI in less than 12 months, and they've been scamming for a dozen years... and yet the principals are not living the Life of Riley, or even Donald Trump. Comfortable, oh yes, and unjustly so, but they don't seem to be profiting very well on their 12 years of hard work at scamming people.

They're not good poker players. Note that The Boyz tried to finesse immunity out of the SEC in exchange for helping the Receiver decipher their amateurishly bogus record-keeping. You don't bluff when you know the other player is holding four aces, boys. And especially not if the other player is a cop.

And the scheme itself-- there seems to be nothing in the histories of either Wishner nor Gillis that suggests they're smart enough to come up with the working model. Indeed, it is literally by the book. And I use "literally" literally.

lit·er·al adjective \ˈli-t(ə-)rəl\ 1) involving the ordinary or usual meaning of a word; 2) giving the meaning of each individual word.

So, literally-- "by the book." It's a textbook Xerox of every other ATM leaseback scheme that's been busted for the past ten years. And in its "pay phone" and "Xerox machine" and "office equipment" incarnations, the same scam existed for a good 20 years before that.

Who gave them the playbook? Because they sure as hell weren't smart enough to come up with it themselves.

Did they know it was a crooked deal? I think the reference a few pages back shows that to be the case. They both knew there were no real ATMs -- that's part of the playbook. Gillis' wife warned her friends and relatives not to invest. A wife may not know all the business secrets of her husband, but after a dozen years, she'd know enough. If she knew, he knew; if he knew, Wishner knew. They both knew it was crooked from Jump Street.

They were neither inventive nor criminally sophisticated, but they weren't dolts. They knew the scheme would collapse with the inevitability of an unwanted season. It was a 100% mathematical certainty: Ponzis and pyramids expand geometrically, then collapse from their own unsustainability, period.

Yet they chose to draw two cards to an inside straight, knowing damned well what would, without a doubt, happen. All for the benefit of-- what? What?

Profit? Well, they seemed to live quite comfortably, but they were not in the George Soros/Bill Gates class. Most of the money which came into NAS went right back out to earlier suckers, at least until very recent months.

So here's a couple of guys in their 60s-- when most people are retired or thinking about it -- scrambling around desperately trying to find more & more wealthy suckers to pay off previous suckers, leaving not very much dough for the scammers themselves. Calling places out of every phone book in the country to hunt for ATMs to list on a phony contract. Fielding calls and emails from happy and/or angry investors all day. Hustling around to "Get Rich Quick" conventions to spread your pitch on a time-consuming person-to-person basis. That is a LOT of work.

Out of-- what? -- altruism? Self-satisfaction that you're temporarily making strangers happy with their monthly stipend? A hearty "Thanks, pal!" from some jamoke you don't know other than from his name on a ledger? For the sheer joy of letting the world think you're a big cheese in the investment world? To convince yourself that you're a success? Because you sure as hell ain't making money at it.

What is the point of scamming $120,000,000 in six months if their plan is to pay it all out to some third party the morning the check arrives? Why would they risk -- every day of what's left of their lives -- the inevitability of financial collapse, the ruination of their own lives and their families, and very probably physical harm and/or death from extremely irate victimized investors-- all for making a living that is just "comfortable"?

Like I said, it ain't aspic. There's another element here.

[grimreaper]

*Why did they do it*?

It's called the *CREEP* factor...you start out with a legit business...then get lazy and start making things up along the way. Seems to work just like the ENERGIZER BUNNY, it's keeps rolling along. Then DENIAL sets in>>>we're getting away with this, so why not chug along? Once your in over your head, it's >>*Now we have to keep everyone happy or we're screwed*. The momentum builds and it becomes a run away freight train just waiting to run off the rails. So they had no other *motives* at all...they simply got caught up in it with no way out.

[LaVidaRoja]

Unless/until the forensic accountants find out where the % of "handling charges" were diverted to.

[Tednewsom]

Thanks, but I know the theory. I don't buy it.

First, the idea that this started legitimately. They may claim that, but it's horsepuckey. The sparse number of legitimate ATMs involved indicate a scam from -- at the very least -- the first two years.

(If you're operating a new business and your first two years don't show a profit, you bail. And it cannot be coincidence that the pattern is point by point precisely the same as all other busted ATM-leaseback games.)

So they didn't change directions and start improvising: they did exactly what they intended to do: create a Ponzi confidence game using new customers to pay old ones, all thinking they're investing in a non-existent product.

As for being in over their heads: eh. They clearly had no compunctions about lying, fraud or theft at any point. Their entire scam was based on that. And equally, they clearly gave not a healthy shit between them whether or not a bunch of suckers were robbed or hurt. That was the plan all along. Why would they then have some change of heart and concern about "Keeping everybody happy"? Aw, screw 'em, what are they gonna do, sue us? We'll sell 'em their stupid contracts back and they'll go away. They always do. The suckers are too ashamed at their stupidity to tell anybody. Who they gonna tell? Fat and sassy customers who think they're on the gravy train? Haw haw.

And the only thing that changed about the company function were the numbers; more investors meant a little more paperwork. Higher number of ATM contracts purchased by any given customer: one or two more digits on a bogus spread sheet. Instead of writing down $300 a month x 10 machines, you make it $300 a month x 100. Ten, 100, 1000-- what the hell, I got plenty of numbers.

[The Observer]

Well, let's go to the opposite end of the theory spectrum. Gillis and Wishner were just playing dumb and were actually skimming money whenever it made sense to do so and hiding it away. If they were that smart while playing dope-a-rope with the rest of the field, I suspect they were smart enough to hide the money somewhere where no one could find it. So the victims are still out.

You can't have it both ways, you can't posit that Gillis and Wishner were dumb slobs running a Ponzi scheme, yet smart enough to hide significant portions of money away where no one could find it. Neither can I propose that Gillis and Wishner were the Dr. Evils of Ponzi schemes, yet so stupid that they got stuck running a Ponzi scheme for the sake of running it. There has to be a middle ground, and that is simply going to be that Gillis and Wishner were on the dumb side, thinking that they could keep this scam going forever as long as they played it cool and didn't get too greedy.

Why? Because criminals, whether they are committing bank robberies or white-collar crime, are basically stupid. That stupidity kicks in at first base when they entertain the notion that they can get away with it. You can look at any number of crimes, analyze them till the cows come home, and still end up realizing that the only explanation for why the perp did what he did was that he was just plain stupid.

I wouldn't be surprised to learn that Joel and Ed may have had earlier situations where NASI had a crisis and was about to collapse, and these guys toughed it out, got some more investors in, and kept it moving. That may have convinced them that they really could keep this scam moving. Nothing like a little apparent success to grease those ego wheels spinning in their heads. And when those wheels take off, not a lot is going to slow them down.

*Significant* means at least 20%+ in my mind. .... 10% or less would be *INSIGNIFICANT*.
Just my take. My first hand knowledge of 7 investors shows them to be net winners and the potential clawback for them ranges from 100% of profits to over 50% in a 4 year clawback period from 2010-2014. I say POTENTIAL, because some investors may be unable to come up with all funds demanded in a clawback.

Right, those are the investors that you refuse to provide information on so that they can be identified for the receivership's benefit and the amount of their profits calculated.

I can't see 2400 investors being able to collect 20% from 7 investors on clawbacks, especially now that you are hedging on their ability to pay a clawback. And please don't speculate that there has to be a lot more investors who are net winners in that 4 year look back period. You don't know and can't certainly provide any definite data in that regard. And it is cruel to keep pumping up the hope of the victims here by making your unbacked claims of "significant" funds for clawbacks.

[grimreaper]

And please don't speculate that there has to be a lot more investors who are net winners in that 4 year look back period

That's not what I said...you don't get it...so I'm done. Didn't say there are a *LOT MORE* net winner investors in the 4 year period, but the #s are significant none the less. That's because the number of contracts was GROWING and doubling every 5 years. The more recent clawback period insures you get the *low hanging fruit*...those investors with the biggest profits who had been around long enough to have significant gains. True, it doesn't get ALL profits because of the 2010 limit, but the farther back you go, the SMALLER the total profit landscape.

This is what I said>>>

The PROFITS don't extend ALL the way back. It takes 5 years to realize a profit, so the earliest profits were realized in 2003. Also, there are many with profits that didn't come to fruition until many years later. They can take back ALL PROFITS to the extent of the total distributions taken in the 4 year period of 2010-2014. So you're NOT eliminating 80% of the PROFITS here.

[Tednewsom]

One of the complex beauties of the scheme is the enticement to roll over your "profits" into yet another of those luscious money-making ATMs. I was trying to figure out what the company might've realized through the years, but I stopped after Year 6, because it would get too complicated. Sure, the thing "matures" at about 6 years and generates "profit" after that-- but the Tar Baby Syndrome takes hold, and instead of socking these "profits" away, the marks are encouraged to plunge their money into new contracts. (Basically paying for their own "profits" via their new donations to the Gillis/Wishner Charity Fund and Floating Crap Game.)

However, it does simplify the arithmetic not to have to subtract the cost of buying, installing and operating the ATM... since, of course, there never were any.

[grimreaper]

One of the complex beauties of the scheme is the enticement to roll over your "profits" into yet another of those luscious money-making ATMs. I was trying to figure out what the company might've realized through the years, but I stopped after Year 6, because it would get too complicated. Sure, the thing "matures" at about 6 years and generates "profit" after that-- but the Tar Baby Syndrome takes hold, and instead of socking these "profits" away, the marks are encouraged to plunge their money into new contracts. (Basically paying for their own "profits" via their new donations to the Gillis/Wishner Charity Fund and Floating Crap Game.)

However, it does simplify the arithmetic not to have to subtract the cost of buying, installing and operating the ATM... since, of course, there never were any.

True and some of the individuals I know did exactly that. So you had an almost exponential progression of contracts as time when on..both with people adding and recruiting new investors.

[Judge Roy Bean]

... You can look at any number of crimes, analyze them till the cows come home, and still end up realizing that the only explanation for why the perp did what he did was that he was just plain stupid.

I have to disagree.

There are any number of crimes committed that are orchestrated by some very smart and especially clever people. Many of them get away with little or no significant punishment because their crimes are difficult to prosecute and they have the resources to mount a vigorous defense that the Justice Department or other regulatory bodies aren't going to find a satisfying way to win.

If you look at the history of financial crimes that took place in the last decade, you'll find very few of the clever criminals or their accomplices faced incarceration. That only invites people like these perpetrators to try their hand at it.

As I've said over and over again, there is a protected class, and they are anything but stupid.

[grimreaper]

If you look at the history of financial crimes that took place in the last decade, you'll find very few of the clever criminals or their accomplices faced incarceration

Cough cough.....Madoff

[snookered]

It does appear that white collar crimes are treated more leniently, since they were not violent crimes. However, the depth and scope of this scheme and the major impact to so many peoples financial future may cause the courts to be a bit harsher on these guys. Let's hope so.

http://dealbook.nytimes.com/2013/02/25/ ... ants/?_r=0

[Judge Roy Bean]

It does appear that white collar crimes are treated more leniently, since they were not violent crimes. However, the depth and scope of this scheme and the major impact to so many peoples financial future may cause the courts to be a bit harsher on these guys. Let's hope so.

http://dealbook.nytimes.com/2013/02/25/ ... ants/?_r=0

These guys are small-fry - a little over two thousand investors.

Between just Countrywide and Ameriquest hundreds of thousands of people lost their homes in utterly bogus mortgage situations that helped put Fannie and Freddie into receivership yet none of the major players are behind bars let alone seriously prosecuted.

On a scale of 1 - 10 Gillis and Wishner barely show up.

[snookered]

It does appear that white collar crimes are treated more leniently, since they were not violent crimes. However, the depth and scope of this scheme and the major impact to so many peoples financial future may cause the courts to be a bit harsher on these guys. Let's hope so.

http://dealbook.nytimes.com/2013/02/25/ ... ants/?_r=0

These guys are small-fry - a little over two thousand investors.

Between just Countrywide and Ameriquest hundreds of thousands of people lost their homes in utterly bogus mortgage situations that helped put Fannie and Freddie into receivership yet none of the major players are behind bars let alone seriously prosecuted.

On a scale of 1 - 10 Gillis and Wishner barely show up.

This may be true... but Countrywide and Ameriquest were large corporations and did not specifically pick their friends and others to invest. And, frankly, the government was in on that fiasco and cover up.

Gillis and Wishner knew that every single contract they sold was fake. Every single one. This, to me, is different from the big corps. The big corps sold packaged deals, right? Never looking into the eye of who was being defrauded. Gillis and Wishner did just that. Looked every single investor in the eye and lied. Flat out lied. If they don't go to jail, they best get body guards for the remainder of their lives, as there are no doubt some pretty bitter folks wrapped up in this scam that are out scads of money.

Both of these guys are in their 70's... not 60's as some have posted. They could give a rats ass what happens to any of us. I know this for a fact, because I showed up at Wishner's office before he went dark. I called him out to be a fraud. He didn't deny. I asked if my money was gone. He snidely remarked "not yet". I honestly hope these men die paupers, as many of their victims likely will.

[Tednewsom]

Both of these guys are in their 70's... not 60's as some have posted. They could give a rats ass what happens to any of us. I know this for a fact, because I showed up at Wishner's office before he went dark. I called him out to be a fraud. He didn't deny. I asked if my money was gone. He snidely remarked "not yet". I honestly hope these men die paupers, as many of their victims likely will.

OK, I'll cop to saying they were in their 60s. I was trying to be nice. As for your meeting-- I wish you would have cleaned the old bastard's clock.

[Gregg]

I'm with the Judge in not being so sure these guys will ever see the inside of a jail cell. Its out and out fraud and they've admitted as much, so sure its an easy crime to prosecute, but Charis Johnson stole half a billion dollars in less than 18 months (12 DailyPro, google it) and was never even indicted. And no one has ever given any coherent reason why not, she also admitted the crime, and helped the authorities figure it out, but was never arrested and not a single net winner faced clawbacks. While we're on clawbacks, BTW, I have said from the beginning that the chances of any happening are at best 50/50. If investors did indeed "re-up" their profits, and it looks like many did, that makes potential clawbacks even less, as you only face clawbacks for money you actually got back. The cashflow looks like 95% of the new money in came in during the last 18 months, none of that money or dividends/interest/leaseback paid on it is profit, just repayment of principal, again, not subject to clawback. Finally, look at the actual cases where they did go after profits, you'll see that there are two things that happen nearly every time, some people refuse to pay the clawback, fight it in court, lose, refuse to pay, and the judgement is sold to some third party collection agency for a song...and sometimes even eventually collected at least in part, but the estate in the end only realizes 20-30 percent of the initial amount determined to be owing. Then there are cases that settle before litigation, look at these (actual cases, not hypothetical speculation) and you see people paying usually less than 65% (a good number for the receiver to agree to as 35% is about the minimum cost of litigation) sometimes less than 50% and not unsually for piddling amounts like 5-10% or less, because the receiver looks at the available assets and figures that's as good as they're gonna get. With a few months notice you can put yourself in that position pretty easily, with 2 years you're a fool if you can't and don't make yourself judgement proof.

Unlike the late cases where investors did get sizable refunds, (ASD investors who didn't follow the advice of the "group" to not participate in the receivership, got 100%, another one that I can't recall the name of right now got 30%, maybe ZEEK) there isn't a pot of money left where authorities shut it down before collapse, and no class of top level near insiders who took out among them more than half the unjust profits, the money is gone. I think 20% is a pipe dream, myself.

[JamesVincent]

Unlike the late cases where investors did get sizable refunds, (ASD investors who didn't follow the advice of the "group" to not participate in the receivership, got 100%, another one that I can't recall the name of right now got 30%, maybe ZEEK) there isn't a pot of money left where authorities shut it down before collapse, and no class of top level near insiders who took out among them more than half the unjust profits, the money is gone. I think 20% is a pipe dream, myself.

Zeek investors have been awarded 40% of the stated claim pre clawback at last notice. Kenneth Bell has been a very aggressive receiver however and should not be used as typical except for the length of time it took to get anywhere. He also had the advantage of catching ZeekRewards completely by surprise, there was no notice issued like there was with NAS, so he was able to catch a lot of the principals money in the bank. Seeing what I've seen with other receiverships I agree with Gregg, you aren't going to see a large amount of money miraculously appear, nor are you going to see a big clawback. Most of the long term investors were just that, they recycled their money into other ATM contracts and therefore may have been net winners but not really. It's pretty obvious that Gillis/ Wishner blew their load and won't have much to add to what is being distributed except maybe in the way of personal property when they come after their houses and things like that, if it gets that far.