Joel Barry Gillis, president of a Calabasas, California firm that was used to operate a Ponzi scheme that bilked investors out of over $100 million, pleaded guilty this week to federal fraud charges. Edward Wishner, the second man charged, pleaded guilty earlier this month. The fraud is believed to have lasted thirteen years and scammed about 2,000 investors who were told that their money would be used to buy profitable automated teller machines.
Both men pleaded guilty to conspiracy, two counts of mail fraud, and one count of wire fraud. They face a maximum sentence of eighty years in federal prison at their sentencings scheduled for March 30.
According to court documents, Gillis and Wishner ran Nationwide Automated Systems, Inc. (NASI), which claimed to place, operate, and maintain ATMs in high-traffic locations, such as hotels, casinos, and convenience stores. NASI further claimed to operate about 31,000 ATMs and engaged in over $1 billion in ATM transactions a month.
The pair’s victims paid a flat amount to purchase ATMs to be installed at specific locations. They then told investors that they would lease back the ATMs and pay investors fifty cents for each transaction made at their particular ATM, guaranteeing twenty percent annual returns on each ATM.
The overall operation was a fraud. The pair paid back some victims, but that money came from other investors, the defining element of a Ponzi scheme. The scheme collapsed this past summer when NASI bounced $3 million in checks.
If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-741-7503 to discuss your potential legal remedies or complete the contact form.