2 men charged in NY with $80M Ponzi ATM scheme
NEW YORK — Two men lured victims into an $80 million Ponzi scheme by convincing them they were investing in thousands of automated teller machines that in fact were never purchased, federal authorities said Monday.
Vance Moore II, 55, of Raleigh, N.C., and Walter Netschi, 62, of McKinney, Texas, each face a charge of conspiracy to commit wire fraud and nine counts of wire fraud. If convicted, each count carries a maximum penalty of 20 years in prison and fines.
Netschi, who surrendered in New York on Monday, “will be pleading not guilty,” said his lawyer Michael Washor. “We reasonably expect that at the conclusion of a trial, he will be totally exonerated.”
Moore was arrested Friday in Garner, N.C. His New York attorney, Stuart Abrams, did not immediately return a call for comment.
U.S. Attorney Preet Bharara in Manhattan and the FBI said the men solicited investments for about 4,000 ATMs, saying they would generate revenue from cash withdrawal fees. In reality, the pair only purchased about 400 of the machines.
The ATMs supposedly were to be placed in retail locations around the country, including convenience stores, gas stations, malls and hotels.
“It was a classic Ponzi scheme, and the phantom revenue came from new investors,” said Joseph M. Demarest Jr., FBI assistant director-in-charge. “The scheme itself, until discovered, was one giant cash machine.”
Prosecutors said Moore used false monthly statements and other forms of deception to mislead clients. In one case, an investor went to see the machine he believed he had bought, only to be told by the hotel at the spot that no such ATM existed. Prosecutors say Moore lied to the man and told him the ATM had been moved to another part of Florida.
The alleged scheme occurred from 2005 to January 2008.
Bharara said the investigation is continuing.
(This version CORRECTS RECASTS thruout with additional details from indictment; corrects name of lawyer, Abrams sted London; RECASTS overlines.)
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