A Look Back: Ed’s Sentencing Brief

We’ve already covered Joel’s infuriating response to the sentencing brief and now we’ll cover Ed’s.  I don’t focus as much on Ed, probably because we just don’t hear as much about him.  My theory is that while he had his fingers all up in those numbers, he didn’t do as much of the day-to-day scamming.

To start, this will only be busted up into two parts.  One for the majority of the filing and one for the character statements.

Edward Wishner, is, by all accounts, a loving father and husband who for decades has served his beautiful family and segments of his community honorably. That same man, however, has hurt – in some cases profoundly – other loving and beautiful families, some of whom also hail from Mr. Wishner’s community.

And we’re off and running!  His lawyer didn’t lay the whole “upstanding member of the community” on too thick while recognizing that he’s done harm to others.  I would have thrown the phrase “considerable and irreparable harm” in there somewhere, but we can’t win them all.

Mr. Wishner admitted his wrongdoing well before prosecutors charged him with a crime

And then they follow up with this noise again.  Like Joel, Ed lived in a land of denial for months before finally admitting wrongdoing.  The absolutely best time to come clean was in 2001 when the $11 million contract fell through.  It would have been easier and they would have been fifteen years younger.  Probably would have only had to pay a fine for unregistered securities. The next really good milestone to come clean was in June 2014 when the SEC subpoenaed their records.  I mean, how delusional do you have to be to not recognize that the jig was up at that point?  But they didn’t do that.  They continued to raise investor funds and operated like nothing was wrong.  In August, when a substitute bank manager refused to honor $3 million in rubber checks, they kept marching forward.  When the bank closed their accounts for just being positively awful, they opened new ones.  They didn’t stop until they were blocked from every angle.

Ed took that one step further – he paid off his mortgage and shifted his house to his wife’s name – likely with money he drained from NASI as it approached its demise.  What a stupid move – a shallow attempt to hide assets.

The response further indicates that Ed was super helpful with producing documents requested (to the best of his ability) whenever the Receiver requested them.  Well, except that time in mid-February 2015 when Ed had a stroke.

On March 25, 2015, the Receiver’s counsel contacted Mr. Wishner’s counsel and inquired whether Mr. Wishner had been receiving $1,500 per month in settlement payouts from Ms. Lisa Freede. The Receiver’s counsel explained that the settlement amounts were owed to Oasis and Mr. Wishner should not be receiving them. Mr. Wishner’s counsel wrote back to Oasis and Mr. Wishner should not be receiving them.

It goes on to say that Ed couldn’t recall any connection between these payments for a jewelry business and Oasis/NASI.  I’m on the fence.  Was this a really stupid attempt to divert funds that rightfully belong to the victims or is were the finances such an indecipherable mess that Ed honestly didn’t know that the money was connected to his scam?  Now that I say it out loud, I’m going with “divert funds.” In any event, once Ed was busted for this, he turned over the funds and told Lisa to start sending the money to the Receiver.

They then go on to say that Ed would help whenever the Receiver asked.  He could help by finding that $5m that disappeared in Panama (per the NY Class Action).  That would be nice.

Indeed, both before and after he became involved with NASI, Mr. Wishner ran a successful accounting business with hundreds of clients.

We’ve found out in past Receiver’s reports that Ed was depreciating phantom assets.  In over-simplified terms: When you own a business, certain large purchases (like a business vehicle or a building) are considered business assets. Assets are treated a bit differently in how you can write them off.  There’s something called a 179 expense, which allows you to write a huge chunk of it off in the first year and then there’s depreciation which allows you to write off a portion each year over the useful life of the asset.  Shut up, I don’t do taxes anymore. Nor will I ever again.  It’s like taking a pick-ax to the forehead.

So anyway, Ed was making up assets and depreciating them as if they were real.  That doesn’t bode well for his tax clients.  The good news is that by now they’ve had to hire other firms to do their taxes.  As you know, the bulk of my financial background is bookkeeping, which means that I’ve had the pleasure of working with a number of accounting firms.  The first thing a new firm does is get a copy of the old return and the books.  Then they immediately proceed to tell the client how incompetent their last accountant was.  Pretty much every time.  It was annoying then, but in this case, I feel better knowing that someone who didn’t perpetuate a fifteen-year fraud is going to be looking at those returns and possibly correcting them.

Several of those clients submitted sentencing letters. In the aggregate, these people describe a man fiercely committed to his clients, recounting several occasions where Mr. Wishner went above and beyond – often without pay, but always within the confines of the law – to save the day, or at least maintain an exacting standard of professionalism.

Again, the people that Ed helped professionally might want to have someone else check over his work.  It’s hard to believe that someone who routinely stepped outside the boundaries of the law can go to his other job and somehow maintain “exacting standard of professionalism.” Hey, let’s talk about his standards of professionalism.  Remember all those times that the bank demanded to know where all NASI’s money came from and Ed threatened to take his business elsewhere.  Is threats of mutually assured destruction up to some kind of “standard of professionalism” of which I’m not aware?

Gillis and Wishner paid themselves non-lavish salaries and Mr. Wishner maintained a six-day-a-week schedule as an accountant.

First of all, Dickwad Duo were each earning $300k per year from NASI.  That’s not modest.  Also, why was he working an extended workweek at all?  That’s why you have employees.  Look, every accounting firm I know hands off a good portion of the work to the lesser accountants in the firm.  As a new client, you’d only deal with the boss for one or two returns and maybe he’s your point of contact but the billing clearly shows that the person doing 75% of the work on your tax return is not the boss.  He (or she) has to review your file before even being able to answer any questions for you. So, why was Ed working so hard?

It is also significant that Mr. Wishner immediately accepted responsibility and started helping the receiver locate funds upon recognizing NASI’s inevitable failure.

The problem is that Ed didn’t recognize NASI’s inevitable failure until SEC stopped them from continuing.  The failure of a Ponzi scheme is inevitable from inception.  Any idiot with a calculator can see how it becomes more and more desperate for investors until it eventually can’t take in enough new money.  Well, any idiot that knew that they weren’t really leasing ATMs. So, Ed & Joel should have known, but none of the victims.

He did not bounce from one shady venture to the next, as this Court no doubt sees in many fraud prosecutions.

I’m not entirely convinced of this.  There have been reports that he was involved in Joel’s Prudential Petroleum scam, but I haven’t found any proof of this. I also found that he registered a few businesses in Nevada around the time of NASI’s inception with a couple of his clients (they may be nothing, still researching).  And I know they’re clients because they wrote letters in support of him.  I don’t consider it to be very professional to engage in side-businesses with your clients.  Case and point: He was Mark Soffa’s accountant and used that relationship to inject NASI into Fuel Doctor.  Look how that turned out.

So I feel like the jury’s still out on whether or not Ed engaged in scammy behavior.

And our next chapter will be on the character statements.  These are far less rage-inducing than Joel’s, thankfully.

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