ATM LEASEBACK SCHEMES-- any insight?

[Hyrion]

YMMV?... huh?

Your Mileage May Very

[JamesVincent]

YMMV? I'm sure that's a useful acronym, if you know what it means. However, in my case... huh?

Your Mileage May Vary.

[webhick]

YMMV? I'm sure that's a useful acronym, if you know what it means. However, in my case... huh?

Yawning makes mice vulgar.

[notorial dissent]

Sorry. YMMV. Your Mileage May vary.

[Tednewsom]

Could it be "Your Mileage May Vary"? I'm just guessing, mind you.

[wserra]

Could it be "Your Mileage May Vary"? I'm just guessing, mind you.

Nope. "Young Mormons Marry Virgins".

[Tednewsom]

I spoke to one of the attorneys prosecuting the case (David Zaro, I think it was. I should write this stuff down). It's a comfort they know not only the history of this incarnation of the scam but the similar scams which preceded it.

He verified a supposition discussed here, that the specific dates and monetary amounts listed in the complaint, which mostly go back only two or three years, were used because they could be documented and attested to; that although the scam goes back nearly 20 years, for the purpose of litigation, bankruptcy and potential recovery, they used only the more recent, verifiable acts. That the case is based on a small handful of specific events of recent years does not exclude victims whose involvement dates back further than those incidents.

The procedure is complicated by the chaotic hand-written records Wishner kept.

So far, no one has found any explanation of why there were two specific prices for ATMs, $19,800 and $12,000. It seems to be entirely arbitrary.

I also spoke at length to my friend who was victimized-- the reason I got interested in this mess in the first place. At 60, she now has to hustle as if she was 30, simply to keep her financial head above water and not lose her house, because the phantom NASI "profits" were what she was using to pay her mortgage.

Multiply her fears and desperation 2000 times for the 2000 other victims and you can get an idea of the evil these two bastards caused. I wish them both a long life behind bars with a big tattooed biker named Chewy who loves old ass.

[notorial dissent]

Ted, thank you for the update. I'm not surprised that they only went with what they could easily get their hands on, and that probably wasn't all that easy considering the lack of actual record keeping. At any rate, they have enough to prove fraud, ongoing criminal activity and multiple counts of it, certainly enough for a very lengthy jail sentence if it comes to that, and lots of leverage with their case. Personally, I would suspect that actually reconstructing the company's books would be prohibitively expensive, and largely guesswork at this point. My suspicion, as it has been all along, is that the buy in amounts came down to whatever they thought the market would bear. Since the idea was to separate the client from their money, it really didn't matter how much they sold the non-existent machines for, low overhead and all that. The higher figure brought them in more money, but no investment brought them nothing. I wouldn't be surprised if there hadn't been a few "special" deals along the way. I suspect though, that the figures they used were a threshold figure to keep out the looky loos and just get people with money to invest.

I quite understand your frustration, and no argument that they have done a great deal of harm, and probably to a lot of people who could ill afford it, which to my mind is the worst sort of nastiness.

[The Observer]

That the case is based on a small handful of specific events of recent years does not exclude victims whose involvement dates back further than those incidents.

Does that mean that the prosecuting attorneys will pursue any net winners that are beyond that three-year window of secured evidence? I would find it hard to see a scenario where the evidence is non-existent or hard to reconstruct to allow pursuit of the "early birds". But I don't know that your statement means that the net winners can breathe easily or not.

My suspicion, as it has been all along, is that the buy in amounts came down to whatever they thought the market would bear. Since the idea was to separate the client from their money, it really didn't matter how much they sold the non-existent machines for, low overhead and all that. The higher figure brought them in more money, but no investment brought them nothing. I wouldn't be surprised if there hadn't been a few "special" deals along the way. I suspect though, that the figures they used were a threshold figure to keep out the looky loos and just get people with money to invest.

I tend to agree. Ed and Joel just struck me as opportunistic predators, and if they thought they could get away with pushing the higher buy-in price in certain circles, then they would do it. I thought at one point in this sordid story, the explanation our fraudsters was providing to certain people for the higher price was that it was getting harder to place machines and thus the costs for doing so had risen. But then again, for the budget crowd, all it took was for our crooks to just announce that there was a brand new opportunity to invest in the $12K level price line and the marks lined up. But if anyone was paying attention and noticed that these two explanations were concurrent with each other, that would have been another tip-off that something was not right.

[notorial dissent]

Observer, I quite agree with you about Ed and Joe, and I think opportunistic is the right word to use here. I really do think it was a case of getting money in rather than consistency, but they seem to have had limits beyond which they wouldn't go, probably having figured out what they could get away with.

My suspicion, based on prior experience, is that they will go after prior net winners based on three things, length of time back(statute of limitations), the quality of the records they can piece back together, and the cost of putting the records back in to usable and triable form, and the attendant cost of actually going after the money in court. I don't know what the record reconstruction has cost them so far, but my impression from the receiver is that it has been expensive, and I would suspect it would increase, possibly exponentially, the further back they go since Ed and Joe didn't make any pretense apparently at keeping records.

[Gregg]

I can't see any scenario where any litigation by the receiver seeking clawbacks is cost effective enough to be viable. In terms of providing restitution, he's gonna have to get a lot more than he is going to easily find just to cover his own expenses and I think ultimately the case ends with taxpayer funds being used to pay the expense of the receivership and no refunds.

Just how it looks from behind perimeter here at the Well Armed Bunker Complex.

[Tednewsom]

Eh. Though there are any number of working-class victims to whom clawback would be financially uncomfortable or even impossible, there are also a great many extremely wealthy suckers in the "net winner" column. Gillis spent much of his time scamming people at country clubs and yacht clubs, suckers with more money than they knew what to do with (and frequently, less sense than God gave a drunken goose.) Though the precise dividends received by such people may be gone, they have total assets which could and should be considered vulnerable.

I know a bookkeeper who had a client enmeshed in the scheme, "owning" twenty or thirty ATMs, constantly buying more. Despite the bookkeeper's suspicion, she followed the client's suggestion and bought in, times two or three. Shortly after her buy-in, she belatedly did Due Diligence and confronted Gillis and actually got her money back. She's therefore a "net winner" because she received about two months' worth of "profit," but totally cashed out. Now, years down the line, her obstinately faithful client is out something like a half million, which affects her not in the slightest. She's sitting on an uncountable pile of inherited wealth and knows about as much about investing as the average poodle. But if the bookkeeper had let her "investment" ride, she'd be financially wiped out.

[grimreaper]

I agree ...there are net winners I'm familiar with who those who added more ATMS over time and are subject to significant claw backs..even if it's just within the statute of limitations period. They will NOT use taxpayer funds to make the net losers whole...no way. The litigation and grunt work (forensic analyses) will be funded by the government to some extent, so don't think that the receiver is hobbled in his effort to peruse net winners. The receiver will also be eligible for a percentage of the claw back...giving him more incentive to take action. How much will clawed back is the question, but the bulk of any funds given back to net losers will come from claw backs...not from taxpayers or any miniscule seized assets.

[Tednewsom]

There is another source of repayment. Any third-party referral services and certainly the banks which NASI used could have & should have been aware of what was slipping in and out of their institutions-- at least according to this precedent:

http://www.bankrate.com/finance/persona ... eme-2.aspx

[grimreaper]

From the latest report 01/30/2015)


In order to pursue claims to recover fraudulent transfers to insiders, investors,
and other third parties, an accurate accounting is necessary. Pursuing such
"clawback" claims requires a detailed accounting of all transactions between the
applicable transferees and NASI. Obtaining this critical information requires the
Receiver to review and analyze a very large volume of transactions to obtain the
relevant information. Although substantial work remains to be done, significant
progress has been made and the Receiver anticipates filing a report on his forensic
accounting in the next 60 days.

B. Clawback Claims
Claims to recover fraudulent transfers from the Receivership Entities are
important assets of the receivership estate that will have a significant effect on what
is ultimately available to distribute to investors. The Receiver intends to seek Court
authority to pursue these claims in the near future and will lay out a proposed
process for identifying and pursuing claims, including giving recipients of the
applicable transfers incentive to settle without litigation.

[Tednewsom]

FYI, Quatloos experts and NASI victims (or even supporters):

A documentary filmmaker named Dan Chace is shooting a video on the saga of "National Automated Systems," and has thus far shot interviews of several investors, including one with the company's leading salesperson. I sat for him for three hours yesterday and was impressed with his questions and his understanding of the story. He was an investor briefly, who bought in but cashed out after only a couple months, because he needed to liquefy his assets. Got his money back without a peep from The Boys.

He's looking for others to talk to on camera, either experts in the field, and/or victims of the scam. He does hope to interview Gillis and get his side, as well, which may be problematic, but that would be swell.

Any California-based investors-- satisfied or disgruntled-- or those knowledgeable about pyramids, Ponzis, MLMs and the like-- I'd stronger suggest you talk to him. Let me know -- either via a Quatloos PM or at act3prods@aol.com -- and I'll put you in touch with him directly. (Or, heck, you can drop him a line at chacedan@gmail.com).

Maybe it'll be a chance for you to blow off steam. Maybe you'll learn something. And maybe-- maybe-- the end result will stop some other innocent person from losing everything they have.

[The Observer]

Well, it's good to see that someone wants to chronicle this tragedy. Hopefully, he is persusing the threads here at Quatloos in order to see the other examples of scamming and fraud that goes on.

...including one with the company's leading salesperson. I sat for him for three hours yesterday and was impressed with his questions and his understanding of the story. He was an investor briefly, who bought in but cashed out after only a couple months, because he needed to liquefy his assets.

I wonder how well this salesperson sleeps at night. If he is as knowledgeable about what happened at NAS as you state, I would wonder at what point did he realize this was a scam and not realize that he needed to leave his employment and inform the authorities of what was going on?

Or are you saying that the documentarian is the person who has understanding of the NAS saga?

[Tednewsom]

To Ted Newsom............I still wonder what is this all to you? Could it be unrequited love? I think you need to get a life and stay out of other peoples business.

Oh, it could be. Or, like the time I saved your ass by doing due diligence on Mr. Lawsuit, it could simply be me being concerned about someone getting ripped off by a charming, fast-talking crook.

If she loses her house, Frances-- you will be responsible. She trusted you.

Ladies and gentlemen, allow me to introduce "investor," also known as Ms. Frances McCafferty, the chief sales person for NAS for approximately the last ten years. Hey, maybe even 15. As I have said several times (without naming her), I think Frances is personally smart, honest and trustworthy. However, I think these recent developments show her to be yet another victim of a couple of fast-talking con men. And as I have also said repeatedly, a good con artist loves using smart and honest people as a shield.

Are you saying that Ms. McCafferty was employed and paid by NAS to sell their product to others? If so, I would think that the motivation for her posting here (under a pseudonym no less) has more to do with her own personal desire of keeping her paychecks coming in rather than with an honest belief that NAS' reputation needs to be defended. I wonder how she would feel about that reputation if NAS had bounced her paychecks.

Mea culpa... perhaps. It's been called to my attention that Frances McCafferty says she has never posted on Quatloos, was never directly aware of this thread or the information therein, and was not the anonymous poster calling him/herself "investor" above-- that this was someone else whom Frances suspected (but asked, and received a denial that it was her.), and thus "investor" remains a mysterious unidentified presence.

Since this Mystery Investor took personal potshots at me and clearly knew inside personal information, I'd appreciate confronting my accuser.

Hey, on the other hand, maybe I can take a little solace in knowing that "investor" is probably getting a knock on the door from the SEC and the FBI right about now.

My apologies to Frances, if she was indeed not the "investor" who so vigorously defended those honest pillars of the community, Joel "Dough-Face" Gillis and Bill "Numbers" Wishner.

[Tednewsom]

I wonder how well this salesperson sleeps at night. If he is as knowledgeable about what happened at NAS as you state, I would wonder at what point did he realize this was a scam and not realize that he needed to leave his employment and inform the authorities of what was going on?

Sorry if this is unclear. The video guy had bought a machine, then got out for reasons unconnected to smelling rats. He has remained friends with the NASI salesperson who got him to invest in the first place. As for her-- she steadfastly remained loyal to the grifters until the moment SEC and the law clamped down on the grift, at which point she realized what was really happening. And that's years' worth of denial. She understands now that it was a major life mistake, and is not blind to the harm that was done.

Or are you saying that the documentarian is the person who has understanding of the NAS saga?

That, too. He's spoken to a number of other victims, and has read this thread from beginning to end.

[worried]

Last I read, Gillis and Wishner were supposed to be sentenced March 30th, anybody have any knowledge of this? Has it been delayed, etc?