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More tri-county victims added to Ponzi scheme lawsuit

By   /   Monday, April 18th, 2016  /   Comments Off on More tri-county victims added to Ponzi scheme lawsuit

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The Santa Barbara law firm Hollister & Brace added more tri-county residents to its Ponzi scheme case in which investors were allegedly bilked out of about $125 million.

Joel Gillis and Edward Wishner and their Calabasas-based firm Nationwide Automated Systems Inc. allegedly sold investors on automated teller machines that often didn’t exist. Hollister & Brace’s amended complaint, filed on April 15, added three more Santa Barbara County residents.

Those include Santa Barbara County residents Michael Beresford, 74, and Henriette Beresford, 66. The Beresfords invested $288,000 in NASI from 2010 to 2014, according to the complaint. They received $196,707 as “phantom ATM rent,” totaling a $91,293 loss.

Pamela Jean Caswell, a 69-year-old Santa Barbara County resident, invested $60,000 in NASI in 2013. Caswell received $25,130.50 in rent, accounting for a loss of $34,869.50.

The original complaint listed Santa Barbara County investor Pamela Geremia. The 72-year-old invested $72,000 in NASI. She received $15,584.50 as rent on her investment, netting a $56,415.50 loss.

There are more than 700 expected California residents of the 1,251 total victims allegedly implicated in the ruse, according to the complaint.

Over a 15-year span, NASI falsely promised that investor money would purchase ATMs that would generate at least 20 percent annual returns, according to the original complaint filed by Hollister & Brace in federal court on March 18.

Investors paid a flat amount – from $12,000 to $19,800 – per ATM. In exchange, NASI would lease back the ATMs and pay investors a “rent” of 50 cents per transaction, which was well below the typical transaction fees of $2.50 to $3. But most of the 30,000 or so ATMs the firm said it had did not exist. NASI, not the investors, allegedly owned and operated 240. NASI did not make monthly payments to investors with ATM transaction revenue. Instead, it fleeced around $125 million from new investors to fund the pyramid scheme, according to the complaint.

The class-action suit also lists City National Bank as a defendant and its employee Patrick Fitzwilliam, who was allegedly in on the scheme.

• Contact Alex Kacik at [email protected]

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