Feds Charge Two In ATM Ponzi Scheme

Investors ponied up $80 million for allegedly bogus company

September 21, 2009

Ponzi Schemes • California Arrests Alleged Mastermind of Multimillion Dollar Ponzi Scheme • Ponzi Scheme Targeted African-American Churches • California Sues Bernie Madoff Associate • Feds Charge Two In ATM Ponzi Scheme • New Jersey Firm Pays $7.2 Million In Ponzi Scheme • Illinois Broker Accused Of Running $10 Million Ponzi Scheme • California Files 79 Criminal Charges in $200 Million Ponzi Scheme • New Jersey Broker Charged In $10 Million Ponzi Scheme • Bank Of America Sued In Internet Ponzi Scheme • New Jersey Man Arrested in Ponzi Scheme • States on High Alert for Investment Fraud • $7 Million Ponzi Scheme Nets Prison Term in California • Feds Charge Atlanta Investment Firm With Fraud • SEC Charges Mortgage Executive Ran $30 Million Ponzi Scheme • California Police Make Arrests In Alleged Ponzi Scheme • Ponzi Artist Blamed for $150 Million in Losses • Autosurf Sites the Latest Scam Sensation --- • Scam Alerts

On paper, it looked like a "can't miss" investment. Own a piece of 4,000 ATMs in high traffic locations around the country and share in the transaction fees from the thousands of consumers in need of cash.

Maybe such an investment would pay off, but it didn't for the investors who poured money into what federal prosecutors say was an $80 million Ponzi scheme. The U.S. Attorney for Manhattan has charged two men -- Vance Moore of Raleigh, North Carolina, and Walter Netschi of McKinney, Texas -- with nine counts of wire fraud and one count of conspiracy.

"Moore and Netschi knew when they collected these funds that the promises on which the fund-raising was based were false," according to an indictment unsealed in Manhattan federal court.

According to the FBI, the defendants never purchased more than a few ATMs. Instead, they used some of the money to pay generous returns to early investors. Those early investors, convinced they were in on a great thing, helped spread the word, convincing others to invest as well.

"The defendants claimed the revenue in their investment opportunity derived from ATM fees," said FBI Assistant Director-in-Charge Joseph Demarest. "In fact, it was a classic Ponzi scheme, and the phantom revenue came from new investors. The scheme itself, until discovered, was one giant cash machine."

A lawyer representing Netschi said his client is innocent and said he intends to take the case to trial.

Report Your Experience
If you've had a bad experience -- or a good one -- with a consumer product or service, we'd like to hear about it. All complaints are reviewed by class action attorneys and are considered for publication on our site. Knowledge is power! Help spread the word. File your consumer report now.

Share		Follow us on Twitter.

Back to the top |