Two California Business Owners Charged In 15-Year Ponzi Scheme

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Two California Business Owners Charged In 15-Year Ponzi Scheme

Joel Barry Gillis and Edward Wishner, two San Fernando Valley businessmen were charged this week with operating a Ponzi scheme that lasted fifteen years. Authorities believe the two received hundreds of millions of dollars from investors who believed their funds would be used to buy profitable automated teller machines.

Gillis and Wishner face federal conspiracy as well as mail and wire fraud charges relating to the loss of over $100 million by almost two thousand investors. The two operated Nationwide Automated Systems Inc. out of Calabasas, California. The company claimed to place, operate, and maintain ATMs in high-traffic locations, including hotels, casinos, and convenience stores. It also purported to operate more than 30,000 ATMs and was involved in over a billion dollars in ATM transactions each month.

Allegedly, Gillis and Wishner told their investors that the company would lease back the ATMs and pay the investors fifty cents for each transaction performed at their particular machine, guaranteeing annual returns of 20 percent for each ATM. The company solicited investors to use their retirement savings by asserting that the company’s sale/leaseback program would perform better than more customary retirement investment accounts.

NASI did, in fact, make monthly payments to investors, but prosecutors believe that money come from other investors. NASI also did operate a small number of ATMs. But there were no more than 250 of them, and they were owned by the company and not the investors. Prosecutors claim that the overall operation was nothing but a Ponzi scheme.

The scheme unraveled this past summer when NASI bounced about three million dollars in checks, and in response to hundreds of calls from investors, Gillis and Wishner “falsely sought to reassure the victim-investors that NASI was only suffering from accounting problems and technical delays relating to system upgrades, and that timely payment of investor returns would likely resume by the beginning of October 2014,” according to prosecutors.

Gillis and Wishner face up to twenty years in federal prison for each of their four charges if convicted.

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.

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