Alleged ATM Ponzi Scheme Snags Hedge Funds

Oct 7 2009 | 10:00am ET

The latest Ponzi scheme isn’t a hedge fund fraud, but allegedly a defrauder of hedge funds.

According to prosecutors, a pair of scam artists took in a number of smaller hedge funds and private equity firms as part of an $80 million Ponzi scheme. Federal prosecutors in New York have charged Vance Moore II and Walter Netschi with running a fraud that promised victims it would invest their money in automatic teller machines.

According to the indictment, Netschi told investors that he placed ATMs in high-traffic retail areas. He then had the investors sign an agreement with a phony company allegedly run by Moore, which was supposed to service, process and maintain the ATMs.

The two claimed to have purchased some 4,000 ATMs, but about 90% of those were either fake or owned by other companies, prosecutors said. Meanwhile, the promised returns in excess of 20%.

Both men have been charged with wire fraud and conspiracy.


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