I’m putting a hold on the final installment of the saga of Joel’s Sentencing Brief until this is covered in full.
Yet another class action was filed on September 29, 2017, and intended for victims located outside California. According to to the initial complaint, there are 500-600 victims located outside California who, together, lost about $45 million. Victims in California lost about $90 million. Off the bat, we have a discrepancy. The Receiver has been pretty consistently estimating $124-125 million. This case places it higher but this case is only counting from 2009-2014 – five years. Back when NASI shut down, people on Quatloos thought the Receiver could only go back five years but he ended up being able to go back seven. Perhaps because of the multiple jurisdictions of the victims (they are spread across thirty-six states), they can only go back five years in this case, which would account for the $10 million difference between this case and the Receiver.
The suit alleges what I now consider boilerplate allegations against Fitzwilliam and CNB and adds Fuel Doctor into the mix. How he knew, how he helped, etc. What’s interesting in this one are the details revealed. I’ll try to keep it to new information since we’ve heard everything else repeated too often already.
- From 2006 – 2014, $400 million of investor funds flowed through the accounts.
- There was a “Locations Account” to pay the 250 checks for the 250 locations for the lease of 250 real ATMs. Of course, they said that they had 31,000. I guess that means that .8% of their business was legitimate. Almost 1% you guys!
- They had three NASI accounts at CNB – Locations, Investor, and General.
- Fitzwilliam invested in November 2006. This is probably not a new detail. They made $480k in ATM “purchases” and received $735k and change. This made them net winners of over $255k.
- Fuel Doctor had an account with CNB which Fitzwilliam monitored and oversaw transfers.
- Fitzwilliam purchased the ATMs in four groups at ten ATMs per group, all under Bribet’s name to conceal his involvement from the bank. He also used certified checks instead of personal checks.
- Fitzwilliam had NASI remove his name from the mailing labels used to mail Bribet’s checks to them.
- In 2009, when his wife was fired from Wedbush, their assets at Wedbush were frozen, which put a major cramp in their finances.
- Since 2008, Fitzwilliam and his wife were trying to conceal their assets. They transferred homes to her father’s name. Yes, this matters because five days before she was fired and their assets frozen, her father made a payment for the last batch of ATMs but Bribet would get the proceeds.
- In September 2009, an ATM Leaseback Ponzi was busted in North Carolina. Dickwad Duo discussed the scheme with Fitzwilliam. The next month, Fitzwilliam sold back 20 of his 40 ATMs.
- NASI gave Fitzwilliam $60k in 2012 and he provided them with a promotional letter on CNB letterhead.
- Just before CNB told Fitzwilliam to fire NASI as clients, he received another $60k.
- The reason the investors’ checks bounced en mass in August 2014 was that another bank manager was covering for Fitzwilliam while he was away and refused cover all the rubber checks, as Fitzwilliam usually did.
- As an investor, Fitzwilliam received all the same notices that the other investors did. In May 2009, a notice was sent out announcing the sale of 4,000 ATMs to mini-marts (not hotels). In response, Fitzwilliam bought ten ATMs. Soon after, he noticed the disparity between the actual ATM income and how much was being paid out. This caused him to start asking questions about whether NASI had funds located in other banks. Wishner (truthfully) assured him that they did not.
- Fitzwilliam frequently dealt with investors who put stop payments on their checks and those who had checks bounce on them. From January 2008 to August 2014 over 50 incoming investor checks totaling $3 million did not clear the bank. If Fitzwilliam didn’t interfere, then CNB would have investigated this further.
- It was easy for Fitzwilliam to tell whether or not the ATMs he purchased were real ATMs because he could see all the checks cut to the actual locations for the real ATMs. He was the only investor who had access to this information.
- The number of investors tripled from June 2009 to June 2014 and the payouts quadrupled, but the processing fees from the real ATMs stayed the same as well as the number of checks issued for those real ATMs.
- In June 2014, when the SEC began its inquiry regarding NASI’s account documents, Fitzwilliam and CNB continued to process NASI’s stuff for two more months.
- Around 2009 and every year after, CNB investigated NASI. In 2009, CNB told Fitzwilliam to get more information about what NASI does, including their source of funds. Ed told him that he would not disclose the information to others at CNB and if he insisted, then Ed would take their business elsewhere. Fitzwilliam assured Ed that he would “push the matter past compliance.”
- In May 2010, CNB again asked Fitzwilliam to get information about NASI that would have exposed them. Based on the request, CNB mistakenly believed that NASI actually owned all those ATMs. Fitzwilliam gave the questions to Joel who emailed Fitzwilliam back with a “false, cryptic and incomplete response.” Fitzwilliam passed it on, hoping that it would satisfy the powers that be.
- Fitzwilliam’s ATMs were poor performers, causing him to bug the shit of out NASI to comply with the 20% promise. In the months that Fitzwilliam pushed NASI past compliance, his ATMs experienced a sudden increase of transactions.
- In the summer of 2008, Dickwad Duo invested $5 million of NASI’s money with EK Trading for some kilos of a “rare element” to resell at $87 million. It was basically to hide money in Panama. It remains missing. After that, they invested $5 million of NASI funds in Fuel Doctor.
- In 2009, Mark Soffa entered the picture. He obtained the North America distribution rights to Fuel Doctor and solicited investment from the Dickwad Duo. Between 2009 and 2014 NASI transferred more than $5 million to Fuel Doctor.
- Ed instructed Fitzwilliam to monitor the Fuel Doctor accounts the same way he did NASI’s accounts. Fitzwilliam provided a letter to Best Buy saying that NASI owned 50% of Fuel Doctor and was Fuel Doctor’s financial strength. He also helped get Fuel Doctor a loan of almost $45k from Factors Southwest.
- In 2011, Dickwad Duo tried to take Fuel Doctor public. It performed poorly. So, in 2013, Dickwad Duo got a consultant to raise funds in Europe. Once again, Fitzwilliam backed their financial health. He even said that to “date we have never experienced any issues or problems with any of their accounts and enjoy having their relationship here at City National Bank.” I’m surprised the universe didn’t open up and swallow him for that one. In any event, it didn’t help. Fuel Doctor couldn’t save NASI.
Well, that wraps up the complaint. It’s now past midnight and I have no hope of getting through the declarations from Ed, Mark Soffa, and the two investors while still being able to form coherent sentences. They will be forthcoming.