News

Defendant in $80 million ATM Ponzi scheme sentenced to prison

March 1, 2011

A  U.S. District Court Judge in New York sentenced the principal in an $80 million ATM Ponzi scheme to eight years in prison last week.

Judge Thomas P. Griesa sentenced Vance Moore II, 57, of Raleigh, N.C., to 97 months in prison and two years of supervised release.  Moore pled guilty last October to one count of wire fraud conspiracy and nine counts of wire fraud for his involvement in the scheme.

Moore's co-defendant, Walter Netschi, previously had been found guilty of the same charges by a federal jury after a three-week trial, said Preet Bharara, United States Attorney for the Southern District of New York. Judge Griesa is scheduled to sentence Netschi in April.  Federal prosecutors charged the two men in September 2009.

From 2005 through January 2008, Moore and Netschi successfully solicited $80 million worth of investments in ATMs purportedly deployed in various retail locations, including convenience stores, gas stations, shopping malls and hotels, Bharara said.

Moore and Netschi claimed that ATMs were purchased by Netschi from third parties and serviced by Moore. They also told investors that the ATMs would generate revenue streams based on ATM surcharge fees.  Moore provided investors with false documents he created showing that the investor-owned ATMs were earning monthly revenue.
 
"In fact, 90 percent of the more than 4,500 ATMs were actually owned by other people and companies or did not exist," Bharara said. In addition, monthly revenue payments that investors received were not revenues from the ATMs. They were other investors' funds misappropriated by Moore and Netschi in order to further conceal their scheme from the victims.

The scheme also involved Moore and Netschi engaging in sham purchase negotiations with other companies that owned ATMs, so the two men could acquire information about the machines during the due diligence process. Moore and Netschi then used the information and documents they obtained from the companies to further deceive investors, Bharara said.

"Vance Moore created an elaborate scheme to deceive investors, and he continued to lie when questions were asked," Bharara said. "Today's sentencing is another reminder that those who engage in Ponzi schemes will not go unpunished."

The prosecution was handled by the Complex Fraud Unit of the U.S. Attorney's Office.