Kiosk- and ATM-leasing fraud, highlighted by recent breach of contract lawsuits filed against ATM- and/or kiosk-deployment companies, is on the list of the top 10 investment frauds of 2002 released Aug. 26 by the North American Securities Administrators Association (NASAA).
Kiosk, ATM and telephone fraud is 10th on this year's list, which highlights the most common practices used to bilk investors out of their money.
Both the kiosk and ATM industries have been the subject of fraud-related lawsuits this year. On May 1, 179 investors filed suit in Los Angeles Superior Court against kiosk deployer Web Booth and fast-food restaurant company McDonald's, alleging that Web Booth defrauded investors of $8.2 million for a series of Internet access kiosks located at McDonald's (See story: Anatomy of a kiosk suit).
Only 40 kiosks were deployed and Web Booth's principal owner, John Perry, allegedly disappeared last December after draining his company's bank account. A deposition of McDonald's executives was scheduled for the end of August.
Earlier this year, kiosk-ATM-payphone deployer PayStar Corp. (OTCBB:PYST) was sued by more than 100 investors, alleging fraud and breach of contract in its payphone and ATM divisions (See story: PayStar accused of fraud in lawsuit). The company denied the charges and said it would contest the suit.
Several class-action lawsuits are pending against the now-bankrupt ISO Credit Card Center (CCC) and several of the leasing companies that financed ATMs sold by CCC.
This year's list highlights the volatility of the stock market. Unlicensed agents selling securities top the list, followed by deceptive stockbroker practices in the second spot and analyst research conflicts in third.
Founded in 1919, the NASAA is a voluntary watchdog association whose membership includes securities administrators in all 50 states, the District of Columbia, Puerto Rico, Canada, and Mexico.
