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L.A. Judge Issues Orders in ATM Scheme

March 28, 1998|Reuters

A Los Angeles federal judge ordered four men to repay more than $1 million they reportedly bilked from investors in an alleged scheme to sell and lease back ATMs, the Securities and Exchange Commission said. U.S. District Judge George King also ordered the four to stop selling unregistered securities and selling securities by fraudulent means. In one of the largest suits involving Internet fraud, the commission alleged in its civil complaint, filed in October 1996, that the four operated a Ponzi, or pyramid-type, scheme involving investment contracts for ATMs. The judge ordered that the four repay a total of $1,190,192 in money illegally received in the scheme, plus civil penalties. The SEC sought in its civil complaint to have the court find that the defendants committed the alleged crimes, order them to repay all the money they received, plus interest, and pay civil penalties. A lawyer representing the defendants said he had not yet seen the judge's order but that it apparently came about as a result of claims by the SEC that documents were not turned over in a timely manner.

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