ATM LEASEBACK SCHEMES-- any insight?

[Tednewsom]

The $123M was for a 1 1/2YR period from Jan 2013 on.

And my playful guess-timate was $59,400,000 x 2 years -- $118,800,000.

I'm better at this than I thought. Hey, what's $4.2 million between friends?

[webhick]

One thing that helped keep the scam afloat for a while longer was the actual ATM revenue. Per the receiver, that pulls in between $90k and $150k per month.

Also, the receiver's report mentioned that one of the servicers withheld $25k from September's fee payment. I bet that was a loan repayment.

[Tednewsom]

And that's actually helpful at a certain level. If it was $150,000/month, that would take care of five hundred "profit" payments per month at $333 each. That's a substantial bumper if you've only got a couple thousand contracts. When you get into the 10,000, 20,000 and 30,000 contract levels, not so much at all.

[NYGman]

Having spent the last few days reading this thread from start to finish, I have to say this is an amazing thread. From the initial questions, to the defenders of this business plan swearing it is legitimate despite obvious red flags, to the downfall, and postings from scammed investors.

This thread has everything, and had me riveted from start to finish.

Three things come to mind in this thread, that may have helped those that got caught up in this.

1) If it is too good to be true, it probably is. - A Guaranteed 20% ROI in perpetuity is really hard to believe
2) You can't con an honest man. - To believe this was legitimate, you must have been dishonest to yourself.
3) There is no such thing as a free lunch.

I am not saying those who lost out deserved it, I am sure most don't and this is going to cause hardships, but some people do make it easier for people like these to to take their hard earned money.

[Judge Roy Bean]

The $123M was for a 1 1/2YR period from Jan 2013 on. ...

I don't see a date-range specified in the Receiver's report. I'm assuming it was in one of the other filings.

[Tednewsom]

This thread has everything, and had me riveted from start to finish.

I'm working on the sequel, "Freeing a man sentenced to prison for the rest of his life for a crime which never happened." I'll work in an ATM scene for the fans of the first one as an in-joke.

[Number Six]

Having spent the last few days reading this thread from start to finish, I have to say this is an amazing thread. From the initial questions, to the defenders of this business plan swearing it is legitimate despite obvious red flags, to the downfall, and postings from scammed investors.

This thread has everything, and had me riveted from start to finish.

Three things come to mind in this thread, that may have helped those that got caught up in this.

1) If it is too good to be true, it probably is. - A Guaranteed 20% ROI in perpetuity is really hard to believe
2) You can't con an honest man. - To believe this was legitimate, you must have been dishonest to yourself.
3) There is no such thing as a free lunch.

I am not saying those who lost out deserved it, I am sure most don't and this is going to cause hardships, but some people do make it easier for people like these to to take their hard earned money.

Of course you can con and honest man, fraud is ubiquitous and most of the victims are people who don't do their research or don't have good advisers. Life is full of dumb luck translating into big profits, most rich people got that at least partly through dumb luck and kept it through shrewd tight wad methods.

[NYGman]

Of course you can con and honest man, fraud is ubiquitous and most of the victims are people who don't do their research or don't have good advisers. Life is full of dumb luck translating into big profits, most rich people got that at least partly through dumb luck and kept it through shrewd tight wad methods.

I see Fraud and a Con as two separate things. You can defraud an honest man, but to con someone takes some dishonesty on the part of the person being conned. Maybe it was a bad point then, as I can buy that some were defrauded, but others were certainly conned.

[Reader]

Those of you who are posting helpful stuff, thank you. There's little encouragement for many of us.

For those who are projecting dishonesty onto the investors, this is more adequately a reflection of yourself.

With their actual machine inventory making 90k-150k with just 300 machines, it seems, that if they were honest they could have had a great business.

For some understanding, it was pitched basically like this (at least to me it was):
"Machines are about $6k each, with the investment of $19,800 we are able to buy 3 machines with a small handling charge. This way, we always retain 2/3rds control of our business. For each machine, the minimum fee per transaction is $3. We place machines by lease, with a 90 day exit clause, to make sure the machines will perform at a location. Many of our machines are "take over" of existing, placed machines. We guarantee the investor a minimum of 660 transactions per month, the location gets 50 cents per actual transaction. Maintenance and servicing we out source and it tends to be a minimal fee over the entirety of our inventory. We retain large cash reserves used towards financing the refilling of the machines with cash, we structured our business this way, and share the wealth with our investors, while retaining control. As long as investor machines make near 500 transactions a month, we have close to $1,000 per month cash flow (after rental investor obligations) from the machine to cover maintenance and operating fees. This is more than enough. We have contracts for most of the Hilton Hotel chain, we own two machines in the Waldorf Astoria, and we are regularly offered blocks of machines to take over from other companies, but we pursue a slow, cautious growth, so we don't always have machines available".

This made sense to me. My fears of "fluctuation" were mollified by the "two back up" machines keeping cash flowing into NASI.

It took me 9 years (from 2003 until 20012) to "pull the trigger", and not only give NASI all my money, but to mortgage my house as well. I was shown (multiple year) tax returns from other investors. Investors who claimed to have been receiving money for over ten years.

I'm pretty good at real estate investing, and I should have stayed with what I knew. Hind sight...20/20.

So, call me names if you want, from your high horses. I lost all my money, and the money I could borrow. The charities I contribute to regularly? They lost all my contributions. The local businesses I regularly frequented have lost. The hungry homeless guys I bought food for, the 100's of dogs and cats about to be euthanized that I fed and spent time hoping to socialize towards adoption, ... These are some of the things I did with my money and the free time it afforded me.

Now, I'm living on rationed peanut butter sandwiches. So enjoy your feeling of superiority. Be proud of your contribution towards making the world a better place, as you point your fingers at us.

The only people winning from this sad situation is the receiver, who, no doubt is going to make a fortune... Well, them, and the weak egos who need someone to point fingers at.

I feel sorrow for everyone involved, including Joel, and the folks who got me involved.

[grimreaper]

Sorry for your loss..it's devastating.
Having said that, you made two very deadly mistakes.
1)"We guarantee the investor a minimum of 660 transactions per month, the location gets 50 cents per actual transaction"

Right there is a huge RED FLAG. Even though you saw other investors getting paid for 5 years plus, it tells you something is WRONG here. No one on this planet can GUARANTEE a 20% return.

2) "not only give NASI all my money, but to mortgage my house as well."No comment required here.

I have friends and family who are in and I have resisted investing since 1999. Yes, I was tempted many times seeing returns year in and year out, but I knew it couldn't be sustained. I was stunned to see it lasted this long.

[NYGman]

Those of you who are posting helpful stuff, thank you. There's little encouragement for many of us.

For those who are projecting dishonesty onto the investors, this is more adequately a reflection of yourself.

I am truly sorry for your loss, and the fact that they took you for so much. But for 9 years, you had doubts, but seeing others profiting, you threw caution in to the wind, and invested every penny you had and some, on a guaranteed 20% return for life. You were honest with yourself for those 9 years, but then the lure of a guaranteed return without having to lift a finger, made you pull the trigger. This was easy money, and they suckered you in to it. The return were too good to be true, and after missing out on them for 9 years, you felt it time you collect too, or something like that. You had to be somewhat dishonest with yourself, to sink everything in to an investment like this and think it was a good investment. There is risk in everything. Without diversification you bear those risks.

I am not saying you are a dishonest person, you are probably quite honest, you didn't invest for 9 years, because you probably knew if it was too good to be true, it probably was. In year 9 something clicked, and you wanted in, so much so, that you made it your sole investment, wanting to reap as much as you could. This after 9 years of not doing it, seems intellectually dishonest to me. I think deep down you knew it was wrong, but seeing others still profit, you lied to yourself, and convinced yourself it was a good investment.

The way I see it, you were duped. You were conned, it was a good long con, and it took you in, eventually. Had you been entirely honest you would have seen the red flags, or asked the hard questions, or not settled for half-ass answers to the questions you asked. Guaranteeing a flat 20% isn't possible, no matter what business model you use, but the promise of it, allows one to suspend their disbelief.

It is unsustainable, and any opportunity offering a 20% return, in perpetuity, as in forever and ever, and ever, just can't be legitimate. I know you don't want to believe that you were less than honest with yourself, and that is fine. You made a grave mistake suspending your disbelief and unfortunately are paying dearly for it. But that is what a Con is. The better the con, the more certain you feel.

This is what con men do, they manipulate you, they prey on your greed, they make magical promises come true in the short term to enrich themselves in the long term. I feel very bad for you, and everyone else who got conned, who fell for this pitch, who invested short term or long term. I see that people lost their retirement, their income, their investments to this con, and I feel very bad for them. But at the end of the day, you had doubts for 9 years, something got the better of those doubts. That is what con men do. It just took them 9 years with you. 20% for doing nothing, guaranteed for life, and others collecting in excess of 9 years, how could you keep passing that up. I don't blame you, I blame the con men. However, I stand by the statement, you can not con an honest person. These guys were con men, plain and simple, they were bad guys, they are the ones responsible for the actual loss you suffered.

I did amend my position to say you can defraud an honest person. If you make a legitimate claim, and provide fraudulent information to back it up, you most certainly can be an honest person, who is deceived. But reading this entire thread, it looks like one big con to me. While some may have been defrauded, many were conned.

[worried]

I feel sorrow for everyone involved, including Joel, ....

Do NOT feel sorry for those sick bastards... they were GLEEFULLY stealing retirements and futures until the very last second, even LONG after they KNEW the FBI/SEC were closing in... Tednewsom wondered about their motivation, how could they have been put, or put themselves, into such a situation.... I too have tried to comprehend, and thought there might be SOME possibility that they were 'victims' of SOME sort. But, go back and read some of the posts on this forum, and in the official reports now about the very end of this saga... They are just literally sick sociopaths who find joy in destruction... No compassion for them.... none... at.... all..... and while I feel like ranting.... I DO have compassion for the victims, and always have, you had your HUMAN-NESS taken advantage of. Humans like to, HAVE to, BELIEVE in things, we're just built that way. We're essentially just completely irrational, chemical computers walking around motivated solely by emotions of one sort or another all day long. That doesn't mean we're not CAPABLE of logic (making decisions, taking actions, arguing) based solely on objective evidence, we just don't always do it, and that's ok. Enjoying music isn't logical, dreaming of being an astronaut or president isn't 'rational' for most of us, 'believing' in your favorite <insert whatever you want here>, is by definition not logical, but it's what makes us all human. You would never tell a little girl to not dream of being President, etc... . No, the real problems creep in when you actually take action, stake out positions in heated arguments, etc. based SOLELY on beliefs instead of objective evidence. But, because you're human, it's very easy to get you to do exactly that. You have to work at questioning yourself all the time before you take serious actions: "am I REALLY being objective on this, or am I ignoring some inconvenient truths?".... Like: just because Joel/Ed's charade had many similarities to a legitimate business, that was not, and never was PROOF that it was legitimate. The proof of the previous sentence was there to be found in the stories of all the OTHER ATM scams that got busted: they TOO looked like a real business, but turned out to be scams..... I wish a great many people in this world could take this lesson to heart and apply it to their whole life. There is monumental strife and suffering in this world caused solely by people taking DRASTIC actions based solely on 'BELIEFS'....... and victimizers like Joel and Ed need to be sitting in a jail cell where they can't hurt anybody else.

[Tednewsom]

Translation of pitch:

"Machines are about $6k each $2000 each back when we bothered to buy them, with the investment of $19,800 we are able to buy 3 machines with a small handling charge pocket the entire amount.

"This way, we always retain 2/3rds control of our business screw the suckers from get-go. For each machine, the minimum fee per transaction is $3 as far as we tell the marks.

"We tell the chumps that we place machines by lease, with a 90 day exit clause, to make sure the machines will perform at a location and then laugh like hyenas that they bought the gag.

"Many of our machines are "take over" of existing, placed machines, in that we just go through the phone book and find out where someone else's machine is and say it's ours. We try to keep a straight face when we guarantee the investor a minimum of 660 transactions per month, and lie that the location gets 50 cents per actual transaction. Maintenance and servicing we out source and it tends to be a minimal fee over the entirety of our inventory, extremely minimal, because we didn't do it once in 18 years.

"We retain large cash reserves used towards financing the refilling of the machines with cash to buy neat cars and boats and vacations, and to fund some other really hysterical scams, we structured our business this way, and share keep the wealth with from our investors, while retaining control.

"As long as investor machines make near 500 transactions a month, we have close to $1,000 per month cash flow (after rental investor obligations) from the machine to cover maintenance and operating fees, but since there were never any machines, we never worried about any of that shit. This is more than enough for us. You, on the other hand-- bwah-hah hah hah.

"We claim to have contracts for most of the Hilton Hotel chain but of course that's more utter bullshit, we say we own two machines in the Waldorf Astoria and luckily none of the dopes ever bothered to call them and find out different, and we are regularly offered blocks of machines to take over from other companies dodging investors who wonder where their money went, but we pursue a slow, cautious growth plan to flee to a country with no extradition, so we don't always have machines available, like, ever in 18 years.".

[Judge Roy Bean]

The spectrum of participation is usually broad in these kinds of things. Granted, there are some who may be able to convince the authorities that they were innocent rubes - but don't be surprised if the investigators appear suspicious.

Get your own professional counsel.

[ATM'd]

Just as a point of interest. We keep hearing about a scam totalling $123 million.

That number was from an early report which stated that $123 million had been taken in from January 2013 to mid 2014.

I think we're going to find that this scheme totalled over $360 million. That's 30,000 machines at (only) $12,000 each over the duration of the scam. Not just from January 2013 forward.

[grimreaper]

Just as a point of interest. We keep hearing about a scam totalling $123 million.

That number was from an early report which stated that $123 million had been taken in from January 2013 to mid 2014.

I think we're going to find that this scheme totalled over $360 million. That's 30,000 machines at (only) $12,000 each over the duration of the scam. Not just from January 2013 forward.

Exactly.
The friends and family I know had been in this as far back as 1998...with many making purchases in the intervening years up to 2008. The *other shoe* has yet to be dropped and many investors don't have a clue what's coming their way.

[notorial dissent]

The preliminary report was just of what they estimated they took in so far this year, and they haven't verified it yet either. It may be quite some time before they get an actual forensic total since the prior year records are not what one could call good. I'm betting the overall report will take some time to complete.

[Gregg]

I thought I had read that the $123 million was the total, and that 95% of it was in the last 18 months, lemme see if I can find where I got that idea in my head.

[Tednewsom]

Bear in mind that the high figures represent cash flow through the company, not total scammed profits. It isn't as if Wishner and Gillis kept everything that came in from their new suckers. Indeed, the superficially successful function paid out to investors regularly, which is why it appeared attractive. Until recent times, with few minor hiccups, investors received checks on time. That's what I learned from my little mathematical time line experiment. If the company raked in ten million a year, chances are they paid out seven or eight. Yes, they'd receive a salary, but I expect that was (on paper) fairly reasonable, if someone were to examine the books.

Gillis accidentally revealed the ingenious, satanically brilliant aspect in his interviews, caged in terms that made it sound like the company was taking a risk right along with its customers-- when in fact the opposite was true. He said that for every $19,800 investment, NAS actually bought three machines, one for the customer and two for the company. On the surface that sounds like they're so confident in their own product, they'll double-down on the bet.

But since there were no real ATMs, the arrangement was even more profitable. It meant that on paper, they were investors at every level of the pyramid. From the very beginning, they, as "investors" received a chunk of the profits from NAS along with the suckers. In fact, for every $333 check every investor received, NAS gave itself a check for $666-- which went not to the company (thus not officially part of the company's annual profit) but directly to the investors: i.e., Joel Gillis and Ed Wishner.

Plus, unlike every other "investor," they did not need to wait the 5 or 6 years to work their financial way back up to zero-- since they were playing with someone else's money. They were both, personally, in profit on every given transaction from the moment the mark signed the check.

[ATM'd]

This is a recent news release. Nothing really new, but it does summarize the story.

http://www.courthousenews.com/2014/11/1 ... scheme.htm

This was brought to my attention because I established a Google news alert for all the involved names. You may want to do that too. I was hoping this one was a notice of his arrest. No such luck.