ATM LEASEBACK SCHEMES-- any insight?

[Lost Income]

I have a feeling we'll never know, because after 19 years the family could have easily accumulated cash stored in a bag or box somewhere the Receiver has no authority to search. When the smoke clears, I'm not expecting to get more than a token amount back.

[webhick]

Of course, the receivership documentation might be able to identify:

• 1) Total units purchased (whether on paper or in reality)

• 2) Total units purchased by the investors

• 3) 1 - 2 = Total units purchased by company (Gillis et. al.)

I'd actually be pretty surprised if 2 = 3.

The Receivership identified 239 real ATMs, none of which were owned by the investors (Joel admitted that he made up the serial numbers and got the locations out of the phone book).

Between Aug 8 and Sept 20, they raised $3.36 in investor funds. That's between 169 and 280 contracts sold in a 45 day period - potentially more than NASI even owned.

The Receiver identified 2,450 past or current investors. If each investor only held one contract, that's a ratio of 1 real ATM to 10 contracts. But we know that at least some of the current investors bought multiple contracts so the real ratio has got to be worse than 1:10.

Of course, if you believe that when Joel said that NASI owned 31,000 ATMs, he was really talking contracts to investors, then the ratio comes out more to 1:100.

[notorial dissent]

What it comes down to is not WHAT they said they did with the "investor's" money, since we know that was pretty much a lie from the get go, BUT, how much of that money was needed to keep the ponzi engine up and running and apparently humming along. The critical difference here is that unlike say Madoff's con, this bunch was having to shell out a fair piece of change each month to maintain the illusion. In Madoff's case he was largely just sending out fake account statements that showed the "investment" and the imputed increase each month, and since the marks felt safe and satisfied with the profit they thought they were getting they never questioned it or for the most part wanted their money back, and the ones who did could be easily paid back out of cash in hand. I don't think NASI could have afforded to do much of that, although it is obvious that they did cash out some people at various times to avoid conflict, and it probably cut seriously in to their cashflow a bit when they did, and they seem to have maintained this business model until the economy tanked, and by trickle down them, but there was never a run on the bank until it was way too late to get out at all.

[Tednewsom]

Well... the economic meltdown of 2008 didn't exactly bankrupt them. When it "tanked," it might have slowed them down for a few months while people were worried about their spare money, but 2008 was 7 years ago. They didn't evince any problems with the minimum monthly payouts to everybody until... well... until this board began to spread the word. And then, not really until last year (which is probably when the income-vs-outgo balance tipped into impossibility.) And although it seems logical for "a run on the bank" to have happened, it does not seem to have. The faithful remained faithful up to and past the obvious collapse; Gillis and Wishner were still hitting big-time suckers for a million, two million, three million bucks apiece near the end, and getting it.

Yes, you're right, Madoff's thefts were mostly on paper. He was probably a better accountant than Wishner, though see what it got him? Also with NASI, prior investors kept going back to the trough, because they were so happy with this can't-lose deal. That infusion of new money from old customers essentially stopped the clock for that investor, or at least backed the hands up a little. A couple more infusions of another $12000 or $19800 neutralizes that customer's drain on the company balance (assuming they're in the black for a given ATM or group of them.)

[grimreaper]

They took in $123M in the last year and half. 2400 Investors averaging 15 contracts per=36000 contracts @ $2500 ave payout per year=$90M ...or $135M for that last 1.5 years>>>BINGO...MELT DOWN.

[worried]

They took in $123M in the last year and half. 2400 Investors averaging 15 contracts per=36000 contracts @ $2500 ave payout per year=$90M ...or $135M for that last 1.5 years>>>BINGO...MELT DOWN.

That's not right. It was reported that there were 31000 contracts, not 36000. Using your $2500 per year payout, that's $116M in 1.5 years which is less than the $123M...

Recently I've read some posts that doubt that Joel and Ed were able to 'skim' very much out of the scam.... Going back to my (admittedly) simple spreadsheet model of this particular Ponzi, that model shows that they could have skimmed more than $100M over the years. That doesn't mean they DID, just that it's POSSIBLE mathematically. The reports of Oasis being supported by NASI, and the apparent habit of 'loaning' money and then 'forgiving the loan' sounds like 'skimming' to me.... It sounds/looks to me though that much of the skimmed money is gone though. There might be some trucks to sell, maybe a couple bigger players with SOME assets (an extra house or two) that are deemed culpable enough to go after. But, if there's also a bank account or two with 'skimmed' funds somewhere, it's very well hidden apparently... I was REALLY hoping the FBI/SEC would move in BEFORE the scam imploded by itself so that there might be some sizable funds to seize, I, and a few others, tried to help make that happen, but it didn't unfortunately.... grimreaper is holding out hope that there are thousands of "winners" with clawback-able funds. I think the math shows that's unlikely, though anything is possible. If a whole lot of people successfully got their money back from Joel and Ed at the end, then I suppose that would create a lot more "winners" that the math wouldn't show....

[grimreaper]

grimreaper is holding out hope that there are thousands of "winners" with clawback-able funds.

Yes, this is a FACT. Now, whether they can be RECOVERED is another matter.

[webhick]

grimreaper is holding out hope that there are thousands of "winners" with clawback-able funds.

Yes, this is a FACT. Now, whether they can be RECOVERED is another matter.

I've been through just about all the filings and I can't recall an instance where such a fact was established. Perhaps you could point me in the right direction?

[grimreaper]

$123 M taken in for 1 1/2 last years wasn't enough to cover payouts.
I think the potential PROFIT total is what counts...not the number of investors in the winning column. Having said this, I error-ed saying it's in the thousands. The TOTAL was around 2400..so that can't be the case. I was trying to make the point that we have around $100M in total profits subject to claw backs. We're going to find out very soon.

[webhick]

grimreaper is holding out hope that there are thousands of "winners" with clawback-able funds.

Yes, this is a FACT. Now, whether they can be RECOVERED is another matter.

$123 M taken in for 1 1/2 last years wasn't enough to cover payouts.
I think the potential PROFIT total is what counts...not the number of investors in the winning column. Having said this, I error-ed saying it's in the thousands. The TOTAL was around 2400..so that can't be the case. I was trying to make the point that we have around $100M in total profits subject to claw backs. We're going to find out very soon.

So...not a "FACT."

[Gregg]

$123 M taken in for 1 1/2 last years wasn't enough to cover payouts.
I think the potential PROFIT total is what counts...not the number of investors in the winning column. Having said this, I error-ed saying it's in the thousands. The TOTAL was around 2400..so that can't be the case. I was trying to make the point that we have around $100M in total profits subject to claw backs. We're going to find out very soon.

Less than $10 will be recovered. You're just a little delusional.

[webhick]

$123 M taken in for 1 1/2 last years wasn't enough to cover payouts.
I think the potential PROFIT total is what counts...not the number of investors in the winning column. Having said this, I error-ed saying it's in the thousands. The TOTAL was around 2400..so that can't be the case. I was trying to make the point that we have around $100M in total profits subject to claw backs. We're going to find out very soon.

Less than $10 will be recovered. You're just a little delusional.

I hear that rich people can argue their way out of almost any bill. Just takes an army of lawyers. Hell, they'll even spend more than they owe doing just that.

Those who invested more than they could lose, on the other hand, likely won't have to argue that hard.

In the end though, how much that gets clawed back really depends on how many can afford to pay it back and how generous they're feeling that day.

[Lost Income]

The Receiver has posted new docs. But same old same old....Receiver & crew continue to spend from what little money they have recovered with no significant results and will likely need lots more time, while the crooks whom have confessed continue finding money to live off of while they freely walk the streets and provide no help to the Receiver. Typical progress from our typical laid back legal system.

[notorial dissent]

Even on a relatively straightforward close down and pay off, which this wasn't, when the company actually kept good real books and records, it can and usually does take months and months and month to get things settled, and they had NO books to start with and next to no records, so I really am not expecting much in the very near future.

I still haven't seen anything resembling real figures so I still don't have a real feel for what the final, let alone the initial payout is going to be. At this point I still haven't seen anything to make me feel that Gregg's estimate is anything but overly generous.

[webhick]

Even on a relatively straightforward close down and pay off, which this wasn't, when the company actually kept good real books and records, it can and usually does take months and months and month to get things settled, and they had NO books to start with and next to no records, so I really am not expecting much in the very near future.

I still haven't seen anything resembling real figures so I still don't have a real feel for what the final, let alone the initial payout is going to be. At this point I still haven't seen anything to make me feel that Gregg's estimate is anything but overly generous.

When I tried to crunch numbers based on what facts we do have and enough reasonable speculation to round it out (erring on the side of caution of course), I only came up with $0.18 on the dollar (and that actually includes paying out the Receiver/Legal team billings).

I wanted to get an average or something from Ponzitracker (or at least a comparison for similarly sized schemes), but I don't see an area where they list the average payouts for Ponzis.

[grimreaper]

I hear that rich people can argue their way out of almost any bill. Just takes an army of lawyers. Hell, they'll even spend more than they owe doing just that.

Those who invested more than they could lose, on the other hand, likely won't have to argue that hard.

In the end though, how much that gets clawed back really depends on how many can afford to pay it back and how generous they're feeling that day.

An *army of lawyers* won't be able to put up a defense, since there is none in a scheme deemed a *PONZI* by the court.

From May 27 filing:

B.
"Clawback Claims
The Court has recently authorized the Receiver to pursue clawback claims
and approved the Receiver's proposed procedures for prosecuting
such claims. The
Receiver is moving forward with settlement demand letters and will file complaints
against profiting investors who choose not to accept the authorized settlement offer"

So, when judgments/complaints are filed against winners who refused the initial offer (either discounts of 30% at first, then 20%), they will then have THAT to deal with, defense lawyers notwithstanding. Can they stonewall? Will receiver pursue with liens and/ or repos? Will they give the judgments to a *third party* collector? How successful will those efforts be?

[webhick]

An army of lawyers could make it look like there's nothing to get even when there truly is. They can make it so expensive for the receiver to go after them that he has to cut his losses and move on. He can only pursue so hard before the cost/benefit ratio gets so shitty that he's just throwing good money away.

[notorial dissent]

As Webhick had pointed out, there is an immense difference between what might be recoverable, and what is in fact recoverable. Cost benefit analysis will determine what actually happens. The Receiver can issue all the demands and what not he wants to, but unless and until the parties involved are gotten in to court and a verdict against them happens, it is just so much noise and bluster, and as has been proven with so many of the ponzis getting anything back is often problematical at best. In many cases, I suspect the actual cost of going after the money would be more than they could hope to recover, and even if you get a verdict, you still have to collect, and as has been discussed before that too can be problematical and result in more legal time and expense.

[Judge Roy Bean]

...

An *army of lawyers* won't be able to put up a defense, since there is none in a scheme deemed a *PONZI* by the court.

Nonsense. There is always a defense and an army of attorneys isn't necessary. I suppose the phrase "motion practice" is not something you're familiar with.

So, when judgments/complaints are filed against winners who refused the initial offer (either discounts of 30% at first, then 20%), they will then have THAT to deal with, defense lawyers notwithstanding. Can they stonewall?

Yes. Some better than others. You may be conflating the two - a complaint must be filed and any number of motions filed and hearings held before a judgment is finally rendered; the judgment may even be dismissed with or without prejudice or issued in favor of the plaintiff or the defendant.

Will receiver pursue with liens ...

Only if they successfully sue and obtain judgments and there is real property to record a lien against - but collecting on them is yet another question. With liens on real property, depending the state/county the party is in, the rules vary on what happens next.

... and/ or repos?

No. Repossession, by definition, applies to property used as collateral for a loan.

Will they give the judgments to a *third party* collector?

Give, no, sell, possible but unlikely. Most of those buy debt at pennies on the dollar.

How successful will those efforts be?

It won't matter. If the court eventually allows the Receiver to sell the debt judgments (typically they will have a private auction), what they sell it for is the amount of the recovery.

[Gregg]

I still haven't seen anything resembling real figures so I still don't have a real feel for what the final, let alone the initial payout is going to be. At this point I still haven't seen anything to make me feel that Gregg's estimate is anything but overly generous.

I'm still trying to be optimistic, and I still wouldn't be surprised if the recovery fails to cover the expense of the receivership. Look at the mess of litigation Ken Bell is tied up with Zeek, and they had I think $92 million in the bank when the feds showed up and locked the doors.