ATM LEASEBACK SCHEMES-- any insight?

[grimreaper]

We know that in 2014 the house cards collapsed because >>>there weren't sufficient funds coming in from new investors to pay off older investors. I believe that the number of NEW investors had been dwindling for some time and the tipping point came (2014) around FIVE YEARS post 2009 (the line between winners and losers). That's significant because FIVE YEARS happens to be the span of time it takes from transitioning from loser to winner! So.....even though the growth of new (post 2009) investors was eroding, Gillis could continue to pay off investors until he hit the wall in 2014. I think many of you will be surprised to see the # winners here vs losers.

[The Observer]

We know that in 2014 the house cards collapsed because >>>there weren't sufficient funds coming in from new investors to pay off older investors.

That is how every single Ponzi scheme ends, if not interrupted by law enforcement. There is no other way for a Ponze scheme to collapse. Thanks for stating the obvious.

I believe that the number of NEW investors had been dwindling for some time

Another obvious statement - the reason all Ponzi schemes collapse is because the number of new investors added is not enough to cover the current payouts. But here is the problem with your statement - it provides no facts. It is just your belief - and without any other fact to support it. It just happens I believe that wserra's great aunt Tillie raises prize-winning tomatoes in the Sea of Tranquility on the moon - and because Wes tells us that this is true. Unfortunately what I choose to believe doesn't mean its true either.

...and the tipping point came (2014) around FIVE YEARS post 2009 (the line between winners and losers).

You keep repeating this claim over and over again, but it based on nothing except your belief. You have never provided any facts, numbers or anything to justify this theory.

That's significant because FIVE YEARS happens to be the span of time it takes from transitioning from loser to winner!

No, it's not significant. It's a coincidence at best, or in this case you are just counting back 5 years from the time scheme collapsed, based on the five years of a typical payout and pronouncing this as the critical year. This is what mathematicians call "guessing." Why? Because you are not looking at any other facts, numbers, or audit figures, all of which would be necessary to declare any particular year as the "tipping point". But here is another coincidence - 2009 happens to be the year that Ted Newsom, in the 4th quarter of the year, started asking some hard and pointed questions about the NASI investment plan here publicly. Perhaps Ted was asking questions elsewhere as well. Think that this might have been the reason for investors starting to dry up? Or are you ignoring that little fact since it might take your theory down a notch or two?

So.....even though the growth of new (post 2009) investors was eroding, Gillis could continue to pay off investors until he hit the wall in 2014. I think many of you will be surprised to see the # winners here vs losers.

Not so. I have just shown that you have said nothing that sheds absolutely any light on how there could be nearly a 1:1 ratio in net winners to net losers. As I have said earlier, you are just making it up as you go.

[grimreaper]

yes...this is all conjecture...I've never said I could prove anything here..none of us can. I stand by what I have said until proven otherwise.

[The Observer]

yes...this is all conjecture...I've never said I could prove anything here..none of us can. I stand by what I have said until proven otherwise.

Another fine moment of irony brought to us by grimmie: I admit I am making stuff up, but I think it is true, so I will keep repeating this nonsense ad nauseum in the hopes that someone is going to believe it.

And of course the obvious question: How can he stand by a figure that is mathematically impossible to maintain? And one that he admits is only baseless conjecture?

[Tednewsom]

Gee whiz.

Actually, I long ago mentally distanced myself from any worries about my friend's finances. She'd made the choice to believe, despite the facts, and I knew the outcome was inevitable. So I genuinely have no emotional interest in how the numbers shake down, it's all an intellectual game at this point. With damned few specific facts, I may add.

Offhand, I'd say grimreaper's guess about 1000 net winners and 1000 net losers sounds right. That does not mean there's some big leprechaun pot of gold somewhere, but it's a reasonable deduction. There were +/- 2000 people involved at the end, that's a fact. The ratio of income to outgo in a Ponzi has to increase geometrically to survive at all. That would indicate there were +/- 1000 individuals involved (overall) during the first 2/3rds of the history of the scheme, +/- 1000 in the last years (roughly 5-6 years, the length of maturation of the "investment.") to make up for the financial bleeding of the earlier ones.

I know, for instance, that their chief sales person had 200 to 300 regular repeat customers, people whom had been in the scheme for 6, 10, sometimes 15 years. There was yet another salesperson, and it's likely they also had 100 or 200 regular customers. That leaves 1400 or 1500 people total drawn in by the chief sales crook, Gillis, who had the most to gain. I don't see the 1000/1000 split as unreasonable.

And, of course, "net winner" (and loser) is a plastic, flexible term, and amounts "won" (or lost) vary with time and the number of purchases. My friend owned 8 machines, but they were each bought separately over a period of 15 years. The early purchases thus became a drain on the overall NASI budget slowly as opposed to the maturation of a purchase of ten or 20 machines by high rollers. And really, each time an investor went back to the trough and bought more ATM contracts, this stopped the clock on the drain of their earlier (matured) investments... or at least slowed down the clock a bit, delaying the inevitable income/outgo imbalance disaster.

She, like some other so-called "net winners," scarcely has a big pile of dough accumulated. Heck, she's used the monthly NASI checks simply to pay her mortgage and utilities. Going after such a person in clawback would be pointless. She-- and I'm sure her situation is not unique-- is virtually judgment-proof. You can't get blood from a turnip. But on paper she would still be considered a "net winner."

But there were others who (if we're to believe what was reported by the court regarding the boneheaded investments done by high rollers in the last couple of years... and the statements here of old Beverlyhillsguy and that other overconfident jerk who owned 20 or 30 machines, and had idiot friends who owned even more)... then there are some "net winners" who 1) made it into the black and sucked up a mountain of dough and 2) have total net worth large enough to consider them deep-pocket targets for clawback.

Does that mean losers will ever make all their money back? Hell, no, and no one has said that. If they're really lucky, they'll eventually see 10 or 15 cents on the dollar.

[webhick]

Per the SEC complaint back in September, NASI raised $123 million in investor funds since 2013. It does not say how much of that was reinvestment of profits.

At the lower $12k rate, that's like 10,000 contracts in almost two years, the $19.8k rate places it at closer to 6200 contracts (the Dickwad Duo also allowed people to finance contracts, so some of those funds could be from even more investors or just payments on prior contracts). Out of the 30,000 or so they supposedly sold over 19 years. So, between 20% and 30% of the contracts were sold in the last two years of the scam.

[Hyrion]

Observer wrote:
why it will not possible to ever achieve a 1:1 ratio of net winners to loser, as some here fantasize about.

Well, ummm... no... no, I don't think there's been a soul on this board who ever said that.

Actually:

I estimate that there are 1000 winners and 1000 losers. 2000 total, since that was the total # checks issued prior to the melt down.

I'd say grimreaper's guess about 1000 net winners and 1000 net losers sounds right.

Ted has now officially added himself to the "souls who have said 1:1 is possible" group.

[Hyrion]

She, like some other so-called "net winners," scarcely has a big pile of dough accumulated. Heck, she's used the monthly NASI checks simply to pay her mortgage and utilities. Going after such a person in clawback would be pointless. She-- and I'm sure her situation is not unique-- is virtually judgment-proof. You can't get blood from a turnip.

Don't have to get blood from a turnip.

You just stated she has equity in a property she is/was paying a mortgage on - payments she made out of this scheme.

Whether or not the receiver will go after that, a court will sign off on it, she can lawfully avoid having to give it up, etc - I'll let the history unfold. I'm simply pointing out she may have more to loose then you claimed.

[grimreaper]

So, between 20% and 30% of the contracts were sold in the last two years of the scam.

BINGO.

Let's call it 25% sold in the LAST 2 YEARS ( somewhere between both 12K and 20K contracts). Keep in mind though, some of these contracts were purchased by>>PREVIOUS NET WINNERS<<< and if they REMAINED as such at the end, those contracts would not be counted in the *loser* column so the % of those contracts representing NET LOSERS could be substantially LOWER. We now have more or less another THREE years prior that encompass additional net losers..but again, not ALL contracts sold in that period were necessarily owned by net LOSERS for the same aforementioned reason.
This certainly bolsters my argument that total # net winners *COULD* equal net losers.

[Tednewsom]

You just stated she has equity in a property she is/was paying a mortgage on - payments she made out of this scheme.

Whether or not the receiver will go after that, a court will sign off on it, she can lawfully avoid having to give it up, etc - I'll let the history unfold. I'm simply pointing out she may have more to loose then you claimed.

I am well aware of that, and so is she. It's not comforting.

[Tednewsom]

Ted has now officially added himself to the "souls who have said 1:1 is possible" group.

Sure. Why not? A Ponzi scheme doesn't have to have numerically more late investors (ostensibly "net losers") than early ones (presumably "net winners") to collapse of its own weight. In fact, had the boys simply stopped at Year 10 and taken on no new suckers at all, it would have collapsed a year or two after the maturation of the existing contracts.

Plus, the existence of people who bought multiple machines skews the overall math both ways. Some guy who bought 40 of them in 2001 would be considered one "net winner," versus the ten other people in the same year who might have bought one or two, or three. Yet when you count 'em up, there's only 11 "investors."

[Gregg]

So, between 20% and 30% of the contracts were sold in the last two years of the scam.

BINGO.

Let's call it 25% sold in the LAST 2 YEARS ( somewhere between both 12K and 20K contracts). Keep in mind though, some of these contracts were purchased by>>PREVIOUS NET WINNERS<<< and if they REMAINED as such at the end, those contracts would not be counted in the *loser* column so the % of those contracts representing NET LOSERS could be substantially LOWER. We now have more or less another THREE years prior that encompass additional net losers..but again, not ALL contracts sold in that period were necessarily owned by net LOSERS for the same aforementioned reason.
This certainly bolsters my argument that total # net winners *COULD* equal net losers.

Writing it in bright colors doesn't make it any less ridiculous. Every new contract purchased represents a new loss in itself, if the person buying it sent any money in, that money might balance out previous winnings, but maybe not, what if their only realized net gains were more than years ago, and after that they reinvested rather than take cash? We don't know how the receiver is going to interpret that, and if the judge will go along with whatever claim he makes. Saying that a quarter of the contracts were sold in the last 2 years means nothing except they surely were net loss positions when the tent caught fire. And if they were financed, with 10% down, that number might represent 75% of all contracts sold, again, all at a net loss on the end date. And none of this changes the fact that it took 5 net losers to support the cash flow to each net winner, at a minimum after the initial investments turned positive cash flow.

[Gregg]

And how much has the receiver spent so far just counting the money, a million give or take, without recovering a dime yet. But, yeah, it could end well.......

[AndyK]

Then again, the receiver may be entering "blood from a turnip" mode.

[grimreaper]

. And none of this changes the fact that it took 5 net losers to support the cash flow to each net winner, at a minimum after the initial investments turned positive cash flow.

????
Care to explain this?

BTW...you could have a net winner (overall) who was a net loser in the last couple years. I'm acquainted with several.

[Tednewsom]

. And none of this changes the fact that it took 5 net losers to support the cash flow to each net winner, at a minimum after the initial investments turned positive cash flow.

????
Care to explain this?

BTW...you could have a net winner (overall) who was a net loser in the last couple years. I'm acquainted with several.

Gregg, your math is off. The payments per contract were +/-$333 a month, an annual total of $3996. One new sale at $19,500 takes care of annual payments to five previous investors. (or 4, if you just shave some off the initial price and feed it back to the new sucker, paying him back with his own dough.)

[The Observer]

Ted has now officially added himself to the "souls who have said 1:1 is possible" group.

Yes, he first said that no one had ever took this position on this thread, implying that I was wrong in claiming that people took such an extreme black-and-white position, now he is backing it up. I am at the point of giving up on Ted ever understanding something simple as the geometric nature of a Ponzi scheme - especially in light of the fact of grimmie admitting he is making it all up in the first place.

As an example of his not understanding:

A Ponzi scheme doesn't have to have numerically more late investors (ostensibly "net losers") than early ones (presumably "net winners") to collapse of its own weight. In fact, had the boys simply stopped at Year 10 and taken on no new suckers at all, it would have collapsed a year or two after the maturation of the existing contracts.

But mathematically impossible. Every one of these "examples", besides being vague and without any calculations to back it up, do not include what was being skimmed off the top. And when that happens, the Ponzi scammer is forced to add new suckers in order to get the original investors paid off on their original investment.

Plus, the existence of people who bought multiple machines skews the overall math both ways. Some guy who bought 40 of them in 2001 would be considered one "net winner," versus the ten other people in the same year who might have bought one or two, or three. Yet when you count 'em up, there's only 11 "investors.

And it would require a minimum of +/- 200 net losers in the scheme to offset those purchases so he could become a net winner (again, depending on how much he paid for the contracts and how many of those contracts you want to specify as being net winners vs. the ones he lost on). And that is another angle on this perspective - determining a net winner means counting up the number of contracts sold, not just the number of investors. In that case, it makes even a worse scenario in trying to reach that magical 1:1 ratio of net winning contracts vs. new loser contracts.

Writing it in bright colors doesn't make it any less ridiculous.

Please, it's all grimmie has left to make himself look important. If you take away his crayons, what else can he do to try pass himself as relevant?

Care to explain this?

Why? We have only explained a zillion times over the last year to you and you didn't understand it. Why would this time be any different?

Gregg, your math is off. The payments per contract were +/-$333 a month, an annual total of $3996. One new sale at $19,500 takes care of annual payments to five previous investors. (or 4, if you just shave some off the initial price and feed it back to the new sucker, paying him back with his own dough.)

Another sign that people are not getting it is when they start quibbling over the mathematics of an example you are providing. Gregg's point was not whether it took 4,5 or 80 persons to support the original net winner investor; even with your calculations, it would still take more than one net loser investor. I could quibble with your math omitting the investors who only had to put in $12,000. Thus your math is wrong as well. But even with that lower amount, you would still need more than one investor over the five years to offset the payouts and skimming.

I took Gregg's example to be based on him rounding up on the $19,200 figure for simplicity's sake. The point is that you need more than a 1:1 ratio to pull off this scam, especially if you have been running it for 19 years and skimming money from the new winners and losers.

[grimreaper]

Gregg's point was not whether it took 4,5 or 80 persons to support the original net winner investor; even with your calculations, it would still take more than one net loser investor.

This can't be analyzed as a pure *PYRAMID* because some post 2009 contracts (losers) were PREVIOUS winners reloading. So they still RETAINED their net winner status while eroding their profits. That goes to the bottom line line of ratio winners to losers.....many loses were absorbed by net winners... while still retaining the *winner* moniker.

[Tednewsom]

Every one of these "examples", besides being vague and without any calculations to back it up, do not include what was being skimmed off the top.

I'm not going to get in a fight over this, but I'll point out that a number of otherwise-canny people here have insisted that Gillis and Wishner must have taken only a small, reasonable salary in all the 17 years they ran the scam, because, of course, all their loot was dutifully used to pay their customers. Why should they skim anything? They were perfectly happy to let millions go through their fingers and pay it all out to their suckers.

Which does not make any sense if you factor in human behavior and old fashioned greed.

Point being-- though the NASI scam appears to be a Xerox of every previous "leaseback" scheme over the last 30 years, there are always variations, particularly in math. And at this point, there is little verifiable data on what exactly did happen. Our experts can make general, even specific observations on what may have happened or what might happen, but without the data, it's all guesswork.

[chronistra]

This can't be analyzed as a pure *PYRAMID* because some post 2009 contracts (losers) were PREVIOUS winners reloading. So they still RETAINED their net winner status while eroding their profits. That goes to the bottom line line of ratio winners to losers.....many loses were absorbed by net winners... while still retaining the *winner* moniker.

Why are you assuming they retained their net winner status?

Say they bought five contracts on Jan. 1, 2007; they weren't net winners on those contracts until Jan. 2012. At that point, they bought five more contracts. With the money from those last five going to pay both the old and new contracts, they were still net losers until mid-2014, just about the time the scheme collapsed. If they bought six or seven or ten new contracts in/after 2012, they were net losers through the end of the scam, even though they were in before 2009.