ATM LEASEBACK SCHEMES-- any insight?

[Gregg]

Wes,
No, I was guessing that you had to be able to say "he was my attorney". So if you and me are having a drink in a bar and I tell you I knocked off a liquor store, is that privileged?

[wserra]

If you and I are having a drink in a bar and you tell me that you knocked over a liquor store in the context of seeking legal advice - then yes, it's privileged. If, on the other hand, you're looking to sell me some stolen booze - then no, it's not privileged.

[grimreaper]

But hey, if you know there's $75 million out there just setting in a US bank waiting to be seized, you go get it Sparky!

It isn't *sitting* anywhere..it's been distributed to net winners and they'll have to account for ALL of it. Can it be clawed back? Yes it can. Will they be successful? Well, that's a matter of degree. There is ZERO legal defense for a confirmed ponzi, so those that want to dodge the bullet better have a cover story that's a DOOZY!

Sure it can be clawed back. But saying every penny is subject to clawback action is a long damn way from getting more than 10 cents on the dollar to the investors who lost. I haven't said it couldn't be done, or that it wouldn't be done, I've said, and I still say, that what they get isn't going to pay investors who lost back much of what they lost. You're right there's zero legal defense for the winners, but face it, they're not facing criminal liability, they're not very likely to face criminal liability unless they joins the SovCit Stupid Club and the doozy cover story that has worked in the past has been "I spent it and can't afford to pay anything back".

One thing about this scheme is the relative *simplicity* of it's structure and the availability of records to document virtually ALL investors involved and how much each of them made or lost. Other schemes are much more convoluted with many transactions *hidden* or lost to scrutiny. This really hobbles the effort of a receiver to retrieve any assets. In this case it will be relatively *easy* to get a grip on ALL distributions and how to characterize them based on the time execution and cost of each contract. Having said this, those transactions conducted by the PRINCIPALS will be more difficult to identify and claw back. The lions share of any recovery will come from those distributions deemed *profits* and I maintain that # is substantial.

As far not facing criminal liability, it doesn't matter since judgements will be meted out and those will have to be *dealt* one way or another. Liens/seizures can be placed on various assets as well. Will recovery be be 10cents on the dollar? I'm of the opinion it *should* be much greater than this, given the relative simplicity of the investigation. The only explanation for a *Pennies on the dollar* scenario would be the paucity of assets ...up in smoke. Any assets acquired AFTER distributions will be up for grabs and they will go after them even if it takes time and money. I assume any potential plaintiffs who decide to fight, will be on the hook for prosecution's costs should they lose and they will. So, unless the bulk of investors (net winners) are now *broke*, they going to have to deal with this painful process.
The people I'm very familiar with (family and relatives) have had a variety of responses so far. One family member is actually planning ahead to set funds aside for what is likely to come. Others are not aware of a possible claw back (I will leave it to others to break the news) or think they will avoid it altogether.

[Lost Income]

Like I said Joel & Ed know where the money went. So if the SEC can't get them to tell where cash & assets can still be recovered, I'm confident that and angry investor left alone in an empty room with each of these guys can...which at this point should be acceptable. Simple!!

[Gregg]

One thing about this scheme is the relative *simplicity* of it's structure and the availability of records to document virtually ALL investors involved and how much each of them made or lost.

Absolutely false, when the government steps in, one thing that can be counted on is they have them dead to rights. With so many to choose from, all of them that I've seen in the last ten years have been slam dunks. Yep, this is an easy case. So were ASD, Zeek, TelexFree, Legisis, Madoff, Sanford, Rothstien. But UNLIKE EVERY ONE OF THESE in which investors did or will get something substantial back, there isn't any money in the bank. ASD had $47 million in the bank, Zeek had $73 million just sitting around. Telexfree $153 million...Madoff Standford and Rothstien had similar amounts and their victims were among the wealthiest people in the world, also in at least 2 of those cases a lot of money came from suing the banks/brokerages involved. NASA had what in the bank?

Yep, simple, it'll fit in a briefcase in twenties...

Other schemes are much more convoluted with many transactions *hidden* or lost to scrutiny. This really hobbles the effort of a receiver to retrieve any assets. In this case it will be relatively *easy* to get a grip on ALL distributions and how to characterize them based on the time execution and cost of each contract. Having said this, those transactions conducted by the PRINCIPALS will be more difficult to identify and claw back. The lions share of any recovery will come from those distributions deemed *profits* and I maintain that # is substantial.

Half right, most of it will come from clawbacks because they can double the estate just by calling you. But it won't be substantial because even with you're friends and family, it ain't much. MOST people involved lost money. Its math, don't blame me, blame Archimedes.

As far not facing criminal liability, it doesn't matter since judgements will be meted out and those will have to be *dealt* one way or another. Liens/seizures can be placed on various assets as well.

Most of the money recovered from net winners will be the result of those who voluntarily settle with the receiver, and most of those will pay less than half of what they won. The ones who fight...google the name T LaMont SIlver, courts in Florida have ordered him to pay back money in more than one case, and he packed up and moved to Dominica, where he still scams, in dozens of programs, never paid back a dime and brags about the low costs of living. I won't even get into the Dwight Owen Schweitzer, Todd Disner, Robert Craddock...again the list goes on

Will recovery be be 10cents on the dollar? I'm of the opinion it *should* be much greater than this, given the relative simplicity of the investigation. The only explanation for a *Pennies on the dollar* scenario would be the paucity of assets ...up in smoke. Any assets acquired AFTER distributions will be up for grabs and they will go after them even if it takes time and money. I assume any potential plaintiffs who decide to fight, will be on the hook for prosecution's costs should they lose and they will. So, unless the bulk of investors (net winners) are now *broke*, they going to have to deal with this painful process.

You need understand the concept of settling...most of the money will come from people who save the receiver the trouble of litigation by offering him a settlement, and that typically means they pay about half what they won.

The people I'm very familiar with (family and relatives) have had a variety of responses so far. One family member is actually planning ahead to set funds aside for what is likely to come. Others are not aware of a possible claw back (I will leave it to others to break the news) or think they will avoid it altogether.

Tell them the first deals are the best deals, settle early.

[Gregg]

If you and I are having a drink in a bar and you tell me that you knocked over a liquor store in the context of seeking legal advice - then yes, it's privileged. If, on the other hand, you're looking to sell me some stolen booze - then no, it's not privileged.

In that case, the last time we had a drink...never happened.

[grimreaper]

Most of the money recovered from net winners will be the result of those who voluntarily settle with the receiver, and most of those will pay less than half of what they won

Well *less than half* is a far cry than 10cents on the dollar. I don't know how you can come up with this conclusion anyway. I still maintain THIS SCHEME will be MUCH easier for a receiver to work through as opposed to the others you site. Also, the number of net winners is relatively low..perhaps 1000 give or take. That makes the receiver job easier and less costly as well. The net winners are NOT in the driver's seat here, they will probably be given a modest discount to settle and it won't be a 50% haircut! They will be asked to return a good portion of what they received as profits and if they cannot do so>>>>THEY WILL HAVE TO GIVE A GOOD ACCOUNTING AS TO WHY NOT. This isn't going to be a negotiation. If they have assets obtained after distributions commenced, then those will be fair game and I assume that would include equity in a home, which could force a sale. If I'm wrong on this, I would invite someone here to feel free to chime in.

Oh, BTW...those who don't *VOLUNTARILY SETTLE* are not going to be rewarded for doing so and will be vigorously pursued. Again, like those who have settled, they'll be required to account for where the money went and will be subject to losing assets. Bottom line, only those bereft of assets will escape.

[Lost Income]

Getting money back from 1000 investors, especially if many have to sell assets to generate the money, could take a long time. And if Joel & Ed have cash hidden, the only way that will be found is if Joel & Ed can be persuaded to revel the location.

[grimreaper]

Getting money back from 1000 investors, especially if many have to sell assets to generate the money, could take a long time. And if Joel & Ed have cash hidden, the only way that will be found is if Joel & Ed can be persuaded to revel the location.

Joel and Ed are a dead end..fagetta 'bout 'em. What can be gleaned from the carcass will pale in comparison to potential claw back. Yeah it will take time... perhaps 4 years to complete a claw back.

[Judge Roy Bean]

... aside from insiders I've never seen a court force anyone to start selling assets to satisfy a ponzi clawback. Ask a lawyer after you pay him (attorney client privilege so he can tell you the truth) how he likes the chance of going in front of a jury with a case that if he wins, you don't have to pay back money YOU didn't have any culpability in stealing and to pay it back that wife and kids in the back of the courtroom are going to lose their home, and if he loses you only have to pay what you'd have to pay anyhow. No court I know of has yet made anyone do that.
I admit any lawyer in the world will tell you THE LAW is you have to give it back, but a lot of them will gladly take your case to keep you from having too.) ...

Pay very close attention to the above as you consult with your most trusted legal and tax advisers.

Well-represented net winners will not be making losers whole. That's just how the system works.

[Judge Roy Bean]

... They will be asked to return a good portion of what they received as profits and if they cannot do so>>>>THEY WILL HAVE TO GIVE A GOOD ACCOUNTING AS TO WHY NOT. This isn't going to be a negotiation. If they have assets obtained after distributions commenced, then those will be fair game and I assume that would include equity in a home, which could force a sale. If I'm wrong on this, I would invite someone here to feel free to chime in.

Oh, BTW...those who don't *VOLUNTARILY SETTLE* are not going to be rewarded for doing so and will be vigorously pursued. Again, like those who have settled, they'll be required to account for where the money went and will be subject to losing assets. Bottom line, only those bereft of assets will escape.

You are seriously confused.

There will be negotiations. Your understanding of what constitutes vigorous pursuit is apparently colored for some reason.

You need to understand the reality of life in terms of case efficiency and outcome. There are bigger fish to fry and Receiver and SEC resources are not infinite. There is appropriate pressure to resolve and put an end to the case because in the vast majority of cases, taxpayer funds are being spent and may or may not be recovered.

Also, I seriously doubt any net winner who wasn't actively involved in recruiting/promoting the scheme is facing liquidation of personal property if they are properly represented.

[grimreaper]

There is >>>>NO DEFENSE FOR A PONZI SCHEME>>>>NONE>>> ZERO>>> ZIP>>> ZILCH >>>BUPKIS
Hiring a Lawyer to fend off a claw back is spiting into the wind.

Also, I seriously doubt any net winner who wasn't actively involved in recruiting/promoting the scheme is facing liquidation of personal property if they are properly represented

As far as *active involment*?????? If you have profits that were taken from other's then you give them back. *active* doesn't meant shit...you got money from somone else you give it back >>>>says the LAW.

[Gregg]

There is >>>>NO DEFENSE FOR TAX EVASION>>>>NONE>>> ZERO>>> ZIP>>> ZILCH >>>BUPKIS
Hiring a Lawyer to fend off a claw back is spiting into the wind.

Go up a few topics and see how that works out. And really, you have more than a few serious mistakes in your thesis. Let me say this again for the hard of hearing

MOST OF THE PEOPLE WHO PARTICIPATE IN PONZI SCHEMES ARE LOSERS.



As I tried to say before, let me rephrase something and see if I can say it more clearly, if you ask a lawyer in a general kind of way, like you apparently did on another forum, he'll (correctly) say there is no defense and by law you are not entitled to keep any net winnings. If you steer the discussion away from "hypothetically speaking" into "what really happens" you'll get a much more nuanced answer. If you look at real live what really did happen in many real, recent and almost identical cases, you'll see what I and several of the attorneys on this thead have been trying to show you, that in cases where victims got sizable recoveries large amounts of money were seized before the scheme collapsed on its own which didn't happen here. Real life examples would also show you that when clawbacks are pursued the majority of money actually recovered is from settlements reached with the winners before litigation gets very far, and further, in real life cases those settlements represent substantial discounts from the false profits those people realized.

Further, its hardly even been mentioned that people who should theoretically be in profit very often have only unrealized profits, that is, they chose to not take cash payments but to reinvest their money into new contracts and thus, while they may on paper be tens of thousands of dollars in profit, did not receive near those amounts in cash disbursements and thus, not subject to clawbacks (they only ask you to pay back money you actually got in cash, not numbers on a screen)

Again, you're very very wrong about almost all your assumptions beyond "the winners shouldn't be allowed to keep a penny of profits" which is true, but well, no one should be allowed to just say "I don't wanna pay my income taxes" either. Also a true statement. And your chances of getting much beyond pennies on the dollar for the losers from clawbacks is not as good as your chances of getting Peter Hendrickson to just quietly pay his taxes.

And arguing otherwise is doing a disservice to people looking for the real answers who are tied up in this and wondering what's going to happen to them and if they're going to get their money back.

[Gregg]

Well *less than half* is a far cry than 10cents on the dollar.

Just making up numbers to make the maths easy....assume the total taken in was $125 million....if $120 million was paid back out to people who in the end didn't break even, the total amount in the best case subject to clawbacks is on $5 million. So if all of them settled for 50% average, only $2.5 million is left, so even though the winners paid half, the losers (who are the much larger group) get a piddling amount. You're doing Dinaridgit Math here, and demonstrating why it doesn't work very well, thank you.

I don't know how you can come up with this conclusion anyway. I still maintain THIS SCHEME will be MUCH easier for a receiver to work through as opposed to the others you site.

Then you need to go look at the ones I site, this one is is no easier than any of them.

Also, the number of net winners is relatively low..perhaps 1000 give or take. That makes the receiver job easier and less costly as well.

There is no way there are 1,000 net winners here, I bet there's less than half that.

The net winners are NOT in the driver's seat here, they will probably be given a modest discount to settle and it won't be a 50% haircut!

Sure they are, they have the money and they have probably a year or two to figure out how to keep it.

They will be asked to return a good portion of what they received as profits and if they cannot do so>>>>THEY WILL HAVE TO GIVE A GOOD ACCOUNTING AS TO WHY NOT.

They'll be asked. If they cannot do so, and its so determined to really be the case that they can't, it is what it is, they don't have to explain why they lost it, they only have to prove they don't have or control it. "I spent it on hookers and blow" might be good enough.
And even if they do have it, hell, they have every penny and more in FDIC insured accounts, they can still negotiate. If I were so situated I'd open with offering 2/3 and say "I'm paying your legal fees if you go to court and there's no risk you'll lose". That would almost certainly be accepted.

This isn't going to be a negotiation. If they have assets obtained after distributions commenced, then those will be fair game and I assume that would include equity in a home, which could force a sale. If I'm wrong on this, I would invite someone here to feel free to chime in.

Yep, that ringing in your ears is me chiming in

Oh, BTW...those who don't *VOLUNTARILY SETTLE* are not going to be rewarded for doing so and will be vigorously pursued. Again, like those who have settled, they'll be required to account for where the money went and will be subject to losing assets. Bottom line, only those bereft of assets will escape.

What about those who don't voluntarily settle from Belize? Dominica? Vanuatu? Places with nice beaches and no extradition. Hell, what about those in the UK, they have treaties just for this type of thing, but is it cost effective to spend $10,000 to sue someone in England who is a net winner of $15,000? How about Norway, where the question of the legality of Ponzi schemes is very much a grey area? Again, real life turns out to be a little more nuanced than "THE LAW" as written in some case study.

[Gregg]

If they have assets obtained after distributions commenced, then those will be fair game and I assume that would include equity in a home, which could force a sale.

Just a question for any of the lawyers here, but is that true? Or would any possible action be only applicable to money that can be traced to the scam? I'm fairly certain that in criminal cases they have to tie that new house to money you stole before they can seize it, but would that be true in a civil case?

[The Observer]

I'm fairly certain that in criminal cases they have to tie that new house to money you stole before they can seize it, but would that be true in a civil case

Gregg, as you know I am not a lawyer, but with my experience in asset recovery, I will give my best layman answer. And I will defer to any of the lawyers on this site who can provide a more accurate answer.

First is that to proceed against the assets of person through civil litigation means that the plaintiff is going to have to get a judgment of some kind from the court. That means the court has reviewed the evidence and determined that the person is liable and will have to pay the plaintiff the amount of money awarded in court. So if the receiver in this case is able to establish that net winner X owes Y amount of dollars, what assets they own or do not own do not come into the picture at that time. However that judgment allows a person to pursue to some limit the assets of an owner, but it has to be at the plaintiff's expense. They are the ones who have to identify potential assets that can be seized and have to go back to court to get authority to seize those assets (or garnishment of income). Again, whether the person obtained the asset from proceeds of the NASI scam would not be material. The only issues would be the ability of the plaintiff to show that the asset belongs to the person and that there is equity that would allow it to be sold and any secured priority creditors paid off in full.

The only time that the issue of whether an asset was the result of illegal proceeds from NASI would be for the purpose of returning assets to the receivership that were at one time owned by NASI and transferred to others as a way of defeating collection. You would have to prove that the transfers (including cash) left NASI insolvent, that the transfers were not customary or in line with NASI's operations, that the transfers were not arms-at-length transactions, that the entities receiving the transfers were not bona fide and innocent purchasers, and that NASI was aware of the fact they were going to be facing dissolution. This scenario would also apply to Ed and Joel as principals of NASI and under the law could be treated as alter egos if they personally transferred money or assets to others under the same criteria.

So in my layman's opinion, the "net winners" of the NASI scheme will not face wholesale liquidation of their personal assets at the hand of the receiver. If any of the net winners do not negotiate and secure a settlement, they at worst will face a court judgment. How that would be implemented by the receiver I do not know. Receiverships are limited in time and by the amount of the money that the receiver will be paid by whatever is left of the corpse of NASI. My guess is that a judgment received by the receiver can be used by the victims against the net winner, but on their own dime. Which is why I think your statement about most net winners agreeinng to settle for pennies on the dollar and the receiver agreeing to such settlement rings true. No receiver is going to pay their own money in recovering money for victims. Especially if it means expensive investigations and litigation to determine which assets and properties can be pursued and fought over in court.

But grimreaper can't do math and can't operate in reality. This is why he has his head in the clouds about what is going to be retrieved and recovered by the receiver. He simply will not accept the fact the receiver's job is to establish what was stolen and what can be quickly recovered up front and then bury the corpse of NASI.

There is no way there are 1,000 net winners here, I bet there's less than half that.

I would bet far less than that. If there are 200 net winners under the statuts of limitations, it would be amazing.

EDIT:I just read the latest entry on the Zeek thread and the receiver just filed suit against a number of "net winners". So that supports my theory that judgments have to be secured before any collection can proceed. The question is, of course, how far does the receiver go after the judgment is secured? My bet is not far.

[notorial dissent]

Along with what Observer and Gregg have said here. It is one thing to say that so and so made x$ profit off of the scam and needs to return that money to the corpus, it is another matter entirely to prove it, get a judgment, and then enforce it, ALL of which has to be done.

For the mathematically and reality challenged, all of the above involves going to court, often repeatedly, proving your claim, getting a judgment, and then getting a judge to enforce it, and then usually more legal action to get it all done, all of which costs a great deal of money, money, which the Receiver IS NOT going to spend if it means it is going to cost him more than he can possibly ever get back. Which is why it doesn't happen in a great many cases.

[grimreaper]

Correct me if I'm wrong, but the receiver gets funds through 2 sources. 1) The SEC/ Government funded (like whistle blower program). 2) a Percentage of recovered assets.
Someone suggested that if the receiver gets a judgment for assets (say a boat) that the victims would be responsible for recovering it? I don't think that's the way it works, since it's the receiver's function to obtain and distribute recovered assets. Maybe someone here can confirm?

[JamesVincent]

Correct me if I'm wrong, but the receiver gets funds through 2 sources. 1) The SEC/ Government funded (like whistle blower program). 2) a Percentage of recovered assets.
Someone suggested that if the receiver gets a judgment for assets (say a boat) that the victims would be responsible for recovering it? I don't think that's the way it works, since it's the receiver's function to obtain and distribute recovered assets. Maybe someone here can confirm?

That's what Gregg and Observer have been trying to tell you. The receiver can go to court to get a judgement BUT the enforcement of that judgement is a separate legal action. So to seize any physical assets, besides money in a bank account, must go through another hearing. And that is if the asset is even able to be seized. As far as I'm aware a judge will not sign off to seize someone's primary residence unless that person is liable both criminally and civilly. Things like boats, second homes, investments, vehicles (maybe, but again not if it's the only vehicle), basically things not essential for living may be up for seizure. And, again, for the receiver to get that far into it would require a great deal of money from where ever they are getting paid from and it may very well not be worth the hassle.

[Gregg]

Correct me if I'm wrong, but the receiver gets funds through 2 sources. 1) The SEC/ Government funded (like whistle blower program). 2) a Percentage of recovered assets.

The receiver is paid from the assets he collects unless those are not enough to cover the bill, if taxpayer funds are used, there is no recovery. I have seen some receivers paid hourly rates and others paid on contingency and don't know whether that varies by which agency sets them up, or just the choice of either themselves or the Judge.

Observer, it is typical of receivers to sell judgements that are not collectible in short time frames to debt collection agencies, said agencies paying anywhere from 5 cents on the dollar up depending on how easy its gonna be to collect. I've seen some agree to payment schedules over up to 24 months but that's about as long as they go.

Someone suggested that if the receiver gets a judgment for assets (say a boat) that the victims would be responsible for recovering it? I don't think that's the way it works, since it's the receiver's function to obtain and distribute recovered assets. Maybe someone here can confirm?

First of all you've been told a few times, it is not the receiver's job to recover assets for the victims, it is to conduct an orderly wrap of of the scam, if there's anything left over they can (but are not required by law to) return money to victims. There are also more than a one kind of receiver and different ways they come into being. Most are created by a judicial order and the instructions of the judge both in their creation and as they go along are the final word. I know the SEC can cause one to be created, and the ASD one was created after the investigation by the Secret Service, dunno if I can recall one being created at the behest of the FBI or the Justice Department directly. I'm also not sure how or is a State could create one.

FInally, the Receiver may get a judgement for $100,000 from a winner, the court says so, its the law. But if that winner flees to Panama, or hell, stays in Boca Raton, and doesn't send the check right along, the receiver is in the same position as hes MasterCard issuer when he doesn't pay his credit card.
Help me out if I stumbe here Observer et al...
The receiver, at the expense of the estate, has to find out if he has a boat, and further if he has any equity in the boat, if the boat is worth going after and then he has to get another judgement, in rem, (which means the receiver sues the boat itself, not the owner) against the boat. Having done so, he hires a repo man to go get the boat, and sells it on Ebay or at the local used boat auction etc...that's how the nice flashy $60,000 cigarette boat when seized only netted $6500....(CEPTrust case I forget the particular pimp who owned it but its in the file) No word yet on how much Andy Bowdion's Jet Skis are going to fetch, but they are paying $70 a month for a few years to store them so far.
That's for the guy who never leaves Broward County and just says "fuck you, come and get it" to the receiver. As I said, when they guy wants to have bank accounts and such and decides Dominica is nice this time of year, you have to do all of the above, but none of your US Judgements are enforceable in some countries, a lot of them with nice beaches, If Meyer Lansky and Lucky Luciano were alive today and walking down the beach in some of these countries they may be the least criminal person on the island. Between the ones going there to plan ahead and the ones who fled there with or without a reservation its not a place you want to play poker with strangers. Once the money goes to the Caribbean, its gone and if the person doesn't want to ever come back to Detroit or where ever he came from, I'd say he's untouchable. Reference above T LaMont Silver bragging about how cheap the help is on Dominica (which is not the more poverty riddled Dominican Republic, but is where the Pirates of the Caribbean films were made, and I gotta tell ya, is just a wonderful place to visit, I highly recommend it)

And I'm not a lawyer either, the regulars should know that, not sure if I had made it clear to others. I've been following/writing about ponzi schemes since I was working on my PhD and briefly considered writing my dissertation on the way HYIP fraudsters bank their money across borders through irreversible anonymous payments processors so I know more about following the money than any other aspect of it. I hate to out an attorney on the forum without their permission but I think its safe to say that the owner of Quatloos is Jay Addkinson who is a nationally known asset protection attorney and has surely forgotten more about any of this than most of us will ever know.