ATM LEASEBACK SCHEMES-- any insight?

[The Observer]

The address is public knowledge. I'm honestly telling people not to harass him. There's no point in it. If you give him a heart attack at home before he serves a day in prison then justice is not served.

But I don't disagree with you. I'm redacting.

My only concern was that Quatloos not get the blame for anything that might happen. I understood you were sincere about the "no harassing" warning. Thanks.

[The Observer]

...ut as I read on, my blood started to boil as I read all the fantasy-drivel about Joel's angelic intentions...

It is par for the course. Joel sees that he has nothing to lose by spinning the NASI narrative in such a way that it will give him some chance of avoiding a long term in prison. Given his sociopathic attitude, there was no way that he was actually going to step up and take full responsibility. I am sure the court will take full notice of his selfish attempt.

[webhick]

Ms. Winn opined that “[Mr. Gillis’s] motivation was not greed or personal financial gain, but rather he wanted to be the person who makes people money and could be the good guy/hero.”

And since being a good guy/hero requires honesty and integrity, Joel said "fuck that noise" and became the villain instead.

No, the doctor didn't say that...but Joel has a serious disconnect with reality.

[worried]

Page 95 of Joel's sentencing fantasy brief:
He actually conned his father-in-law who writes in his character reference letter for Joel that he is now 92 years old and was an 'investor' for 13 years. He must have been one of the first.... and he's NOT in the list of losers in the Loss analysis,... so that means he must be on the CLAWBACK list... Joel's 92 yr old father-in-law is looking at 7 YEARS worth of clawback, the only question is "how much".... I wonder if they'll be sharing Thanksgiving dinner this year?...

I'm not looking to steal webhick's thunder (I couldn't match her humor anyway), but I can't contain myself... the only other actual 'investor'/victim to write a character reference for Joel is Robert Newton who lost only ~$7k on an over $400k investment (that's not considering the lost interest he WOULD have gotten in a REAL investment). ALL the rest of the character reference letters talk about what a wonderful and giving person Joel is.... except that they all forget he was SUCKING THE LIFE BLOOD OUT OF 2400 OTHER PEOPLE so that he could act like a nice guy and buy all them dinner!!!... sickening... The 'loss analysis' is very sobering, 30 reference letters, THOUSANDS of victims....

There's an entry in the loss analysis on pg 165/249 that almost fits the reported profile of BeverlyHillsMan, an initial investment of 16 machines at $12k (for $192k) and then later investments that come very close to the total 250 machine number (260) that BHM told us he owned on the very first pages of this thread...the net loss makes the timing about right as well.... I always kind of felt that his denial of the $19,800 price made him real.... same with SomeYuppie...

The largest entry in the deposit column of the loss analysis is on page 183/249 at $9.9M+, all deposited AFTER 2007, that is an 'investment' in 826 machines at $12k/each (don't understand the odd number of the deposit: $9,918,653)... Is that the 'Adam' character BHM referenced in his one and only post?... or it 'Adam' in the clawback list?...

I don't see Elena Pezini (an early poster on this thread) on the loss list... another happy clawback victim?...

... and i do see my family member in the loss list... thanks Joel, and Ed, you evil bastards...

[The Observer]

To be fair, we have to understand that Joel's response to the proposed sentencing was crafted by his defense lawyers. It is their job to make whatever arguments they think will help reduce the sentence that the court hands down. Sometimes that means they are going to take the risk of making an over-the-top statement if they think it will help their client in the long run. I read through the 39 pages and I think overall, they did their best in at least trying to create some holes in the prosecution's recommendation for sentencing. I am not a lawyer, so I will leave up to the few attorneys that participate on this site for their own expert opinion on whether Joel got his money's worth for his defense.

That being said, I think the strongest arguments made were the ones regarding Joel's health and age.Those are real factors and will have to be considered by the court before deciding to send Gillis away for effectively a life sentence. I don't buy the argument Joel will have "...a difficult experience..." in prison, especially if he is ordered to report to a minimum security facility. But his health, especially having COPD, is certain to deteriorate under prison health standards.

The weakest arguments were the ones alleging that Joel never intended to harm anyone, that this was somehow not really his fault due to the alleged destructive behavior of risk-taking and gambling, and that most of the money was paid back to the investors. I find the claim that Joel started off this venture as a legitimate enterprise for five years somewhat lacking; I wonder if there are any witnesses during that five year period who would come forward and relate whether Joel promised them a 20% return, as well as any of the original investors who put up the $11 million for the Starwood venture. If so, then I would have to think that would prove Joel had already decided on running this scam as a Ponzi.

The silliest argument was the one that Joel never took on new investors, he just accepted re-investments from the same investors. I think the defense realized that they needed to clean that up, so the explanation for why NASI ended up with 2400 victims was that they were all the result of "referrals." We know that even that is not true, there were several stories of Joel chatting up potential investors at the yacht club, he had investors going out and landing new fish for NASI (and possibly receiving commissions for doing so), and pretended to have secured new ATM sites so new investors could get in. If you believe Joel's attorneys, you would have to think that Joel was constantly turning away new investors because he didn't want to see them get ripped off: "Sorry, but I am not taking your money, I am restricting this scam to people who I have already fleeced; I'm just not comfortable doing the same thing to a bunch of new strangers."

The most complicated are the arguments related to the loss calculations, but even here I think the defense created some doubt as to the government's calculations - at least in terms of the fact that the government did not include the other business entities who received checks from NASI in offsetting the loss amount. I am not sure why the government did not provide these figures to the defense and I have no idea how the court would take this consideration in terms of sentencing. webhick is right about the nonsense that reinvestment should not be included as a loss, and I would expect the court to see through that.

I discounted all of the relative and friends' statements on what a wonderful and tragic figure that Joel was. It was only expected that the defense would proffer only letters in support of Joel. The problem for me is that already knowing how Joel treated people with disdain and indifference, it only makes him look more of a sociopath than I already thought he was.

And claiming that Joel's $300k yearly skim was a "modest" salary was silly. There are doctors and lawyers out there who would love to make $300k a year, regardless of how modest that figure may be to Joel. Yes, I know the defense is using this as another example of what a great guy Joel was by not taking more. But it leaves a bad taste in my mouth; if I was the judge, I would add 2 years to the sentence just for them using the word "modest." Then when the defense complained, I'd explain that the addition was modest and that Joel is real lucky that I didn't add more.

The government is alleging $125 million in losses with 1,300 investors and that 650-700 net winners "profited" by $100 million. But nothing is provided in terms of what the receiver believes is recoverable from the net winners, and how much of that $100 million is still within the time frame for clawbacks. So as expected, no 1-1 ratio of winners to losers, and from what we can see most of the money went right back to investors to keep the scam running.

[The Observer]

The other nagging issue I have with the claim that Joel ran NASI for 5 year as a legitimate business is exactly that: 5 years. Five years was the magic number where the original investment would have to be paid back. It is coincidental, but I can't help but wonder if the $11 million investment that Joel secured at the point was motivated by the realization that he needed to get more investors to keep the scam going and was pleasantly shocked to see that the results meant he could keep this scam going for far longer than he thought.

[webhick]

That being said, I think the strongest arguments made were the ones regarding Joel's health and age.Those are real factors and will have to be considered by the court before deciding to send Gillis away for effectively a life sentence. I don't buy the argument Joel will have "...a difficult experience..." in prison, especially if he is ordered to report to a minimum security facility. But his health, especially having COPD, is certain to deteriorate under prison health standards.

I understand that sticking old people in prison is expensive for the tax-payer and the conditions aren't exactly like a nursing home....but he was still scamming people just last year. He was healthy enough to run a Ponzi scheme right up until the government blocked all avenues for him to continue to do so. As for the COPD, it really depends on what stage he's in. My grandmother's had it for years and rarely touches her oxygen. If he's early stage, then something else will likely kill him long before the COPD under prison conditions will. Also, unless he's paying for all cleaning and maintenance, he and his wife are maintaining a large home. How is it he can be healthy enough to do that, run a ponzi scheme, and attend charitable events but not healthy enough to sit in a cement room for a few years and think about what he's done? Does he somehow think that's going to be easier than doing 1000 community service hours while he's "destitute?" (That description was claimed in another filing).

The silliest argument was the one that Joel never took on new investors, he just accepted re-investments from the same investors. I think the defense realized that they needed to clean that up, so the explanation for why NASI ended up with 2400 victims was that they were all the result of "referrals." We know that even that is not true, there were several stories of Joel chatting up potential investors at the yacht club, he had investors going out and landing new fish for NASI (and possibly receiving commissions for doing so), and pretended to have secured new ATM sites so new investors could get in.

He also had at least one salesperson working for him.

The most complicated are the arguments related to the loss calculations, but even here I think the defense created some doubt as to the government's calculations - at least in terms of the fact that the government did not include the other business entities who received checks from NASI in offsetting the loss amount. I am not sure why the government did not provide these figures to the defense and I have no idea how the court would take this consideration in terms of sentencing.

I believe that the pre-sentence report was produced sometime in May, along with a loss analysis produced around the same time. A lot seems to have changed in the four months it took Joel to respond. Like the investor that Joel cites as being a net winner. That guy was sued in July. Fighting it, of course. I could have missed it, but I have not seen a sentencing recommendation from the prosecution. The reason why the receiver likely didn't factor in the companies/trusts is because it was still (and likely is still) being researched and/or complex. If a person put in the investment and had all payments directed to a company owned by two or three people who are unrelated by blood or marriage, then is it legal to basically attach the debt to the company to offset the human's loss?

The problem for me is that already knowing how Joel treated people with disdain and indifference, it only makes him look more of a sociopath than I already thought he was.

And don't forget all his charitable involvement. A cystic fibrosis event is far more likely to have big money than say, our food pantry's annual Halloween party. I don't doubt his sincerity of caring about people he knew who have the disease, but I also think he saw a gold-plated opportunity every time he attended a gala.

The government is alleging $125 million in losses with 1,300 investors and that 650-700 net winners "profited" by $100 million. But nothing is provided in terms of what the receiver believes is recoverable from the net winners, and how much of that $100 million is still within the time frame for clawbacks. So as expected, no 1-1 ratio of winners to losers, and from what we can see most of the money went right back to investors to keep the scam running.

I think this is because the information that Joel is responding to is now six months old. A lot has happened since then. Anyway, the receiver is doing a 7 year reach-back and not the five we thought he might in the beginning so 2007 to shutdown would be within the time-frame.

This bothers me:
Joel said that 90% (or 88%, depending on what part of the document you're reading) went back to investors. What time period did they average that over? If you assume clawback period, 10 million over the last seven years is only 1.5m a year. Salaries and taxes for Ed & Joel alone cost over $650k. Lease came up to something like $60k a year. At least a million was loaned to Fuel Doctor by NASI, but not sure when. Not to mention that in the last year and half, J&E withdrew close to a million. And how much did NASI pay employees? Overhead? Health insurance? And I highly doubt it was 90% at the beginning of that scam. At the beginning, they would have been flush with cash, versus the end when they bounced close to $3m in checks while bleeding the company dry.

I'm still inputting the loss analysis. Up to page 19 of 35. So far for the victims, post-2007 losses average 50% of the original investment. As for the winners, the list is incomplete as it is missing entire pages. I input what I had. Of course the whole point was to be able to cross-reference easier and look for patterns. Those two reports are a few months apart as well. I wonder if the receiver would be willing to email a copy of that winner list that Joel is referencing, with the understanding that I don't release it or start publishing victim/winner names.

[webhick]

The other nagging issue I have with the claim that Joel ran NASI for 5 year as a legitimate business is exactly that: 5 years. Five years was the magic number where the original investment would have to be paid back. It is coincidental, but I can't help but wonder if the $11 million investment that Joel secured at the point was motivated by the realization that he needed to get more investors to keep the scam going and was pleasantly shocked to see that the results meant he could keep this scam going for far longer than he thought.

I didn't even notice that. I hope someone from way back then can legitimately contradict what Joel is saying.

[worried]

Well, the claim that a deal fell through with Starwood hotels is something that somebody (like a prosecutor's minions) MIGHT be able to verify or debunk. I don't believe it myself. I found evidence myself that Joel was into other scams (I wrote a post with links a LONG time ago in this thread).

He scammed his OWN FATHER-IN-LAW at that 5 yr mark (when the poor old guy was almost 80 years old!!) ... both those guys are filthy, evil, blood-suckers. The fact that his father-in-law wrote a glowing character reference, and the facts IN it, to me, actually have the opposite of the intended effect. It shows just how manipulative he is. The poor old guy lived through the deaths of TWO little girls!!! then his WIFE gets stricken!! THEN, THEN!, here comes Joel to deliver the final blow, all the while acting like the good guy... sick, sick, sick... The stories from the head-shrinks about his upbringing have the opposite of the intended effect as well, they show that he was indeed bred to be a crook and sociopath and CAN'T BE TRUSTED....

All those friends and family who wrote those letters are a LONG way from realizing just how badly THEY have been victimized as well. He bought their love and admiration by victimizing thousands of people.... someday, someday they may be able to face just how badly they were betrayed... maybe...

It really hurt me to see my family member's name on that damn 'loss analysis' list, more than I thought it would. It's not very rational of me, but I can't help it....

[Gregg]

The other nagging issue I have with the claim that Joel ran NASI for 5 year as a legitimate business is exactly that: 5 years. Five years was the magic number where the original investment would have to be paid back. It is coincidental, but I can't help but wonder if the $11 million investment that Joel secured at the point was motivated by the realization that he needed to get more investors to keep the scam going and was pleasantly shocked to see that the results meant he could keep this scam going for far longer than he thought.

I didn't even notice that. I hope someone from way back then can legitimately contradict what Joel is saying.

I don't see a need for much documentation, he took one dollar for the purpose of an equipment leaseback investment, he spent zero dollars on the equipment for the benefit of the investor. As soon as he failed to transfer legal title to the first machine, he committed fraud, and everything that follows is a continuation of the original fraud.

[worried]

The other nagging issue I have with the claim that Joel ran NASI for 5 year as a legitimate business is exactly that: 5 years. Five years was the magic number where the original investment would have to be paid back. It is coincidental, but I can't help but wonder if the $11 million investment that Joel secured at the point was motivated by the realization that he needed to get more investors to keep the scam going and was pleasantly shocked to see that the results meant he could keep this scam going for far longer than he thought.

I didn't even notice that. I hope someone from way back then can legitimately contradict what Joel is saying.

I don't see a need for much documentation, he took one dollar for the purpose of an equipment leaseback investment, he spent zero dollars on the equipment for the benefit of the investor. As soon as he failed to transfer legal title to the first machine, he committed fraud, and everything that follows is a continuation of the original fraud.

EXACTLY!... and there are more than a few victims who can very colorfully, I'm sure, refute the claims of Joel's compassion for their loss (go read "snookered"'s posts)...

[The Observer]

I understand that sticking old people in prison is expensive for the tax-payer and the conditions aren't exactly like a nursing home....but he was still scamming people just last year.

Agreed. The only point I was really making is that these are the most legitimate arguments that Joe's defense team could make, not that these will necessarily get Joel what he is asking.

He also had at least one salesperson working for him.

Yes, I had forgotten that.

The reason why the receiver likely didn't factor in the companies/trusts is because it was still (and likely is still) being researched and/or complex.

That occurred to me as a possibility last night. But not having seen anything from the prosecution on this point, I really didn't want to speculate any further.

If a person put in the investment and had all payments directed to a company owned by two or three people who are unrelated by blood or marriage, then is it legal to basically attach the debt to the company to offset the human's loss?

Legal or appropriate accounting method? I don't have an answer since I can't remember if there were any instances where an individual gave Joel the money and told him to issue the payments to his or her corporation instead. Or vice-versa. If there were, then where I come from, that's seen as a potential tool for underreporting income.

...I also think he saw a gold-plated opportunity every time he attended a gala.

I daresay you are right.

This bothers me:...

A lot of it bothers me, mainly due to the fact that on any given day the figures change. So one can never pin down to any reasonable sense of accuracy of what actually was lost and what was paid out to who. I can't help but believe that Joel and Ed set up their hobo accounting system on purpose in order to frustrate any future prosecutions.

[The Observer]

It really hurt me to see my family member's name on that damn 'loss analysis' list, more than I thought it would. It's not very rational of me, but I can't help it....

I don't think your reaction is irrational. I would think a lack of reaction on your part would mean that you really don't care about your relative and their loss. So don't feel bad if this is getting to you...it should be. Too bad it isn't affecting Joel.

[notorial dissent]

The other nagging issue I have with the claim that Joel ran NASI for 5 year as a legitimate business is exactly that: 5 years. Five years was the magic number where the original investment would have to be paid back. It is coincidental, but I can't help but wonder if the $11 million investment that Joel secured at the point was motivated by the realization that he needed to get more investors to keep the scam going and was pleasantly shocked to see that the results meant he could keep this scam going for far longer than he thought.

You have a nasty suspicious mind, AND I concur.

[webhick]

Leave it up to a Virgin Island Gunsmith...

[The Observer]

Leave it up to a Virgin Island Gunsmith...

Yes, we tend to get jaded and cynical very quickly.

[notorial dissent]

Yes, but where does the comma really go?

[Arthur Rubin]

Yes, but where does the comma really go?

[Tednewsom]

Can someone explain Exhibit 43 to me? Are these lists of presumed "Net Winners," people whose investment actually exceeded their investments?

I've read much of these 249 pages, particularly the dozens of letters attesting to Joel Gillis' innate sweetness and tender caring, his loyalty to friends and family, his many charitable works, and his upstanding belief in his Jewish faith. My heart goes out to this wretched victim of circumstance. In his deep, mistaken desire to please people, due to his harsh father and the subsequent gambling addiction for which he bravely sought help, he made one tiny little mistake. Surely it is unfair to punish this generous and kind 75 year old man for a minor misstep in an otherwise blessed and humane life.

Further, his lawyer's precedential arguments touched me deeply. The very idea of unfairly imprisoning this sickly gentlemen is ludicrous, because he's been so cooperative since he was caught red-handed. And truly, there is solid jurisprudential logic in giving him the least-harsh punishment allowable, because other scam artists have gotten less punishment for stealing more, and some grifters have gotten longer prison terms for stealing less. Anyone who would disagree with the obvious logic there clearly does not understand the purpose behind the attorney offering an overwhelming amount of authentic legal gibberish.

I want to puke.

This ratsucker robbed people. This was not some minor error in judgement, this was a criminal enterprise which stretched over two goddamned decades. This scam was a focused, intentional fraud, and despite the claim of Gillis' original "good intentions," was designed from git-go as a grift. This groveling, sniveling weasel, whom the world now see for the snake he has always been, conspired to rob people of their lives, their futures, their children's futures. He personally profited to the tune of millions of dollars; screw that "the investors got most of the money" baloney. I don't give two healthy shits whether his cousin likes him. It doesn't matter that he showed up for his dentist's grandson's Bar Mitzvah. Who cares that some of his idiot suckers still haven't realized he's picked their pockets for years?

This massive amount of nonsense reminds me of the classic definition of the word chutzpah. A young man murders his father and mother-- then throws himself on the mercy of the court because he's a poor orphan. That, ladies and gentlemen of the jury, is chutzpah. His family and precious friends describe Mr. G. as a caring man, always there for you, giving, listening, helping. They're describing a true mensch. I offer an alternative Yiddish term: goniff.

[Tednewsom]

The defendant's invocation of his religious and presumed devotion and respect to its tenets particularly galls me.

In Anon. v. State of Israel (35 (4) PD 438, 1981), the judge was similarly asked to be lenient, since the convicted thief had always been such a nice, upstanding, religious fellow. Defendant Anon had been in the State of Israel's foreign service; over a three year period he embezzled a sum of $80,000 dollars in an elaborate fraud scheme. Upon conviction, the trial judge sentenced him to three years. The defendant argued before Israel's Supreme Court that Anon had been a constructive member of society, that he had returned the embezzled funds, and that he would not commit such acts in the future. Therefore, he argued, a prison sentence should not be imposed on him.

In his opinion, Justice Elon asserted that, "Crimes in which the criminal takes advantage of the authority and trust reposed in him by deceiving those who relied upon him are counted among the most serious crimes which undermine the foundations of civilized society."