* SEPTEMBER 21, 2009, 9:48 A.M. ET
This is exactly the sort of scam I'm worried about (recent article from Dow Jones):Two Charged in ATM Ponzi Scheme By CHAD BRAY
NEW YORK -- Two men are facing criminal charges for an alleged $80 million Ponzi scheme that revolved around purported investments in automated teller machines, prosecutors said Monday.
Vance Moore II, 55 years old, of Raleigh, N.C., and Walter Netschi, 62, of McKinney, Texas, have been charged with conspiracy to commit wire fraud and nine counts of wire fraud. Each charge carries up to 20 years in prison.
"Vance Moore II and Walter Netschi used false promises and fake returns to steal tens of millions of dollars from their victims. We will continue to use the full resources of our office to expose the perpetrators and vindicate the victims of complex financial frauds," said U.S. Attorney Preet Bharara in a statement.
Mr. Moore was arrested in Garner, N.C., on Friday and Mr. Netschi is expected to surrender to federal authorities in Manhattan on Monday. Mr. Moore is expected to appear in federal court in North Carolina Monday. Mr. Netschi is expected to appear before a U.S. magistrate judge in Manhattan on Monday.
Prosecutors from the U.S. Attorney's office in Manhattan alleged Mr. Moore and Mr. Netschi solicited more than $80 million in investments in ATMs that they represented to investors were placed in retail locations nationwide, including convenience stores, gas stations, malls and hotel. Instead of using the money to purchase ATMs, the men used the money to further their fraudulent scheme and enrich themselves, the government said.
Mr. Moore and Mr. Netschi entered into contracts with victims falsely representing they have purchased about 4,000 ATMs, prosecutors said. About 90% of the machines purportedly purchased either didn't exist or weren't owned by the men, the government said.
To further the scheme, Mr. Moore and Mr. Netschi allegedly sent phony monthly reports and payments to victims purportedly related to their investments, prosecutors said. The payments weren't revenues from the ATMs, but were from money the men had collected from new investors, prosecutors said.
Write to Chad Bray at firstname.lastname@example.org