$41M Ponzi Style Investment Scheme Looked to Leverage ATM Sales
Three Plead Guilty to Nationwide Ponzi Scheme Involving ATMs and Advertising Monitors
Two residents of Oxnard, CA and a South Carolina man pled guilty last week to participating in a $41 million investment scheme that defrauded approximately 700 investors across the country.
Alan G. Flesher, Wayne D. Flesher, and Nancy Carol Khalial solicited investments in two Ventura County companies, Unlimited Cash Inc. (UCI) and Douglas Network Enterprises Inc. (DNE), over a period of at least four years. According to the U.S. Attorney’s Office, the defendants told investors that the companies would sell ATMs and “Ad Toppers” (computer monitors capable of displaying video announcements) and then display them in commercial locations for profit.
The defendants told investors that they would receive income from the ATM transaction fees and any advertisement revenues generated by the Ad Toppers. In reality, however, most of the ATMs and Ad Toppers sold to investors were never displayed in commercial locations. Instead, the defendants used the majority of the investors’ funds for their personal purposes and to perpetuate the Ponzi scheme, which began at least as early as April 2001, according to the SEC.
In April 2006, the SEC filed a Complaint against Wayne Douglas Flesher, Nancy Carol Khalial, UCI, DNE, Clifton Curtis Sneed, Jr., and Sneed Financial Service, LLC, for fraudulently offering and selling more than $18 million worth of Ad Topper investments. Alan G. Flesher was not named in the Complaint. Federal charges were not filed against Flesher, Flesher, and Khalial until Aug. 2010. (To learn more about the SEC’s allegations, click here.)
Based on the plea agreements, each defendant could face up to 340 years in prison for his/her role in the investment scheme. Sentencing hearings are scheduled for October 1.