Investor Heller allegedly pocketed a sum of $185 million, funneling the funds to personal ventures and corporations, according to the Securities and Exchange Commission's claims, in relation to an ATM investment scheme.
In a shocking turn of events, the Securities and Exchange Commission (SEC) has accused Daryl Heller of defrauding investors of over $400 million in an intricate ATM investment scheme.
According to the SEC, Heller, the mastermind behind the scheme, failed to distribute the proceeds from the sale of some ATMs belonging to the investors. Instead, he is alleged to have used these funds for personal gain, including the purchase of a beach house in New Jersey.
The scheme unfolded in a complex web of deception. Heller rigged an interactive ATM portal to show only his best-performing ATMs during presentations for investors, providing false reports about the performance of ATMs, and doctoring profit and loss statements.
The SEC further alleges that the ATMs sold to investors were often stored in warehouses and were not operational. Paramount, Heller's management group, is said to have sold 2,300 of these ATMs to investors for $52 million, representing a markup of over 4,000%.
Paramount, in an attempt to conceal the truth, provided bills of sale to investors containing serial numbers from the ATMs, without disclosing that they were sitting unused in warehouses.
Heller is also accused of directing Paramount to use investor funds to buy inexpensive or damaged ATMs. He is further alleged to have funneled $185 million from ATM investments into his own pockets and his other businesses.
Between 2017 and 2023, Heller and his ATM companies raised $770 million from 2,700 investors. The proceeds from the sale of these ATMs were used to make payments to earlier investors in a Ponzi-like manner and/or to fund Heller's other businesses.
When Heller didn't make the promised buyout by the deadline, investors were given control of all his ATMs. However, the situation took a turn for the worse when Paramount fired all its remaining employees just over a week after an FBI raid on their Lancaster city offices, leaving investors still waiting for their payout.
The SEC complaint states that Heller used a fraction of investor funds to purchase ATMs. The SEC also alleges that in the third quarter of 2023, investors were shown notices showing that their funds had 27,807 ATMs in service, but Paramount's internal documents only reflected 17,244 ATMs in the network.
In addition to the SEC's allegations, Daryl Heller was arrested on separate federal fraud charges. The details about which companies Heller controlled, the duration of his control, or the filing for bankruptcy in Delaware in 2023 are not currently available. Heller is also said to have transferred investors' money to other companies, including $92 million to a family of companies referred to as Blackford.
The SEC's allegations paint a grim picture of a complex and far-reaching fraud scheme. The SEC's actions serve as a reminder for investors to carefully consider the legitimacy of investment opportunities and to seek professional advice when necessary.
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