Receiver’s 13th Report

Lucky Thirteen!  I guess. The Receiver has settled with 333 Net Winners and has managed to recover almost $38 million. There are 217 letters to Net Winners still outstanding.  The fund balance at the end of September sat at about $34 million. There are only 129 ATMs left in operation, with the monthly income is now down to around $11k per month on average. I wonder how much longer they’ll keep it running before it’s not worth the scrap metal the outdated machines have become. As of the November 28th, the global mediation with CNB is still ongoing. Also, there is now another class-action, filed on September 30th, for investors outside the State of California.  The case number is 1:17-cv-07463.  At least this one is on Pacer, so I’ll get that up in a few days along with updates on the other dockets in the library. These reports are becoming increasingly boring in contrast to the first few which were full of juicy goodies.  Once the Receiver gets a plan approved then it won’t seem like more of the same.  

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Motion Denied

As you already know, the Receiver filed a motion on October 31st for the court to approve his plans to start distributing money. Well, the hearing to approve the motion was set for yesterday, December 4th, at 10 AM.  Then last Thursday, the court moved the time up to 9 AM.  I honestly assumed that the motion would go through just fine since it all seemed really cut and dry.  But then I checked the docket today and it’s been .  No explanation, of course.  Just that it’s denied. I’m hoping that it’s some kind of technical glitch, like they misspelled something or didn’t get the notice about the change of time for the hearing.  Otherwise, I’m a bit stumped as to why it would be denied. Remember, the plan was that within 30 days of the court approving the motion, those who lost money would receive correspondence from the Receiver about how much their claim is and what to do next.  Then, anyone disputing the claims would be allowed to and after all the claims were settled, then the payouts would commence. So, this is a wrench. Hopefully a little one.

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One at a Time: The Payne Case

This one was filed in the LA Court system back in March against City National Bank and Patrick Brian Fitzwilliam.  Looking at the case summary, it seems to be going better than the Nairn case, which looks like it’s on life support. This class action suit is only open to those who lost money with NASI and who are over the age of 65 (they’re going for an elder abuse claim, in addition to others). Considering that many of the investors were elderly at the time the Dickwad Duo convinced them to lose their life savings, this is not a bad angle.  Unfortunately, not all were elderly so…that…sucks. In any event, the complaint outlines some facts and a bit of a timeline.  Of course, these facts will have to be proven, but it’s interesting nonetheless. Fitzwilliam became Senior Vice President and the branch manager for the Woodland Hills branch of the bank in 2004. By this time, NASI had grown to one of the largest depositors at the branch. Whenever deposits were made, Wishner would almost always bring them to Fitzwilliam to deposit. During those visits, Ed would also initiate transfers between bank accounts to cover the checks.  In 2004,

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The claims process begins soon!

Great news everyone!  I updated the docket today! That’s not it.  Keep reading. The Receiver filed on October 31st. Per the filing, there’s about $34 million sitting in the Receivership and the amount keeps going up thanks to recovery efforts, mainly in the form of clawbacks and court judgments.  The Receiver has identified 1,350 investors (or investor groups) who ended up with a loss. I need to make it very clear that what you’re about to read hasn’t been approved by the court yet and this ball doesn’t roll without approval from the court. Within 30 days of approval from the court, each of the 1,350 investors should receive: Information about the process. The proposed claim amount A schedule showing their transactions A W-9 (All investors need to return the W-9). If the investor doesn’t agree with the proposed claim amount, they have 60 days to reply in writing with supporting documentation. For any claim disputes, the Receiver will review and attempt to resolve them.  If they can’t be resolved then the court will have to intervene. It’s pretty simple, but there’s still no quite telling how much you’ll get or even when it’ll start coming.  The proposed claim amount

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Update on those US Treasury Checks

The Receiver has confirmed that the checks are from the criminal case, which is different from what the Receiver is doing, and so they cannot answer any questions about them. If you have questions about the checks, you’ll need to contact the US Attorney’s Office in Los Angeles or the US District Courts in Los Angeles.

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US Treasury Checks

Several of you have posted comments about receiving checks from the US Treasury, referencing the Dickwad Duo.  Okay, maybe they didn’t print that on the check.  Maybe.   These checks are very likely not related to the Receivership but related to the restitution.  I checked the docket a few hours ago and there is no mention of the Receiver filing a plan to pay the victims.  Also, the Receiver filed the eleventh report today and there is no mention that payments have been issued. You may recall that the criminal case concluded with not only prison time, but also a combined restitution of $124,542,945.55 – meaning that between the two of them, they need to pay all that back to the victims.  To the best of my knowledge, they can garnish a portion of prison wages, monies dropped into their prisoner account, and SSI (although prisoners can’t collect while incarcerated) for restitution. I don’t have much information beyond that.  I don’t know what’s been garnished or seized, nor do I know if or when more checks will be issued. All I can say is, <sarcasm>don’t spend it all in one place.</sarcasm>

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One at a Time: The Nairn Case

There have been a number of filings, but I’ve got to hit this one at a time.  Some of them are pretty sensational and, well, there’s this one.  This one is sad. The Complaint The basis of the complaint can be summed up in two points: There are regulations which require banks to implement and enforce procedures to identify and report financial scams.  As of 2001, ATM Leaseback scams were among the top 10. The plaintiffs allege that, under these regulations, the bank should have uncovered several red flags all related to Joel or Ed getting slapped by a Securities Commission or having registration revoked. That NASI used legit processors to receive their legit ATM income, but spent out far more than that on the ATM fees.  The other monies deposited into their account often had “ATM Leaseback” written in the memo on the check. It all boils down to “how could CNB not have known that NASI was a Ponzi so therefore they knew it was a Ponzi.” The Response Then CNB filed an Anti-SLAPP motion.  From what I gather, one premise in this motion is that whatever due diligence CNB performed is considered protected speech.  That seem weird

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Good News, Bad News

Clawbacks The Receiver has managed to recover $28,969,711 from 164 net winners, with another $984,379 due in payments.  So we’re looking at close to a $30 million recovery…on IIRC $125 million in losses.  There are another 100 demand letters still out there and there are 16 cases still in court. ATMs There are now only 158 ATMs still in service.  Remember, we keep losing them because contracts expire and the ATMs are too expensive to replace or because they’re just too old.  Honestly, guys, this ATM business is dwindling.  We’ve lost almost half of what we started with.  And there’s no mention of a sale, not that I expect to be one. Oasis/Fiji/Studio Maui The Receiver seems determined to go after Oasis to sell of any viable assets as well as get back large amounts money that Oasis wrongfully took from NASI and Oasis.  They have been dragging their feet with the paperwork, only sending part of what was requested and the Receiver offered them a settlement.  They did not bite and now the Receiver is suing them.  As for Studio Maui, they only have four trailers, which I gather are all crap.  Richmand (Studio Maui’s principal) agreed to purchase

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Catching Up: Receiver’s Reports & Criminal Case

Holy crap.  Nearly 6 months behind.  I think we can do most of this in one post.  I’ll cover the what’s left of the criminal case and then cover the three Receiver’s reports that have been released.  I’m also temporarily removing the “By the Numbers” page so I can have a chance to update all the numbers. When we last saw the Dickhead Duo, they were freshly incarcerated and we were awaiting the restitution hearing.  Well, the hearing has come and gone and Ed & Joel owe $124,542,945.55 in restitution combined. The Fifth, Sixth and Seventh Receiver’s reports were filed.  To date, he Receiver has settled with 41 Net Winners and has recovered $13,924,461.03 with another $2,375,571.86 due in payment arrangements and $1,690,000 in settlements pending court approval. In the The Receiver states that he has sent another 36 demand letters. The percentage of settlements vs the amount of letters sent is 52.6% and 12 complaints have been filed.  The higher the percentage, the better.  Since there are 36 letters outstanding, 50-ish% is really good.  The percentage of cases filed vs total claims is only 15.8% and the rate of active cases vs the total claims is 3.9%.  The lower

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Happy Incarceration!

The Bureau of Prisons Inmate Locator now shows that Ed and Joel are both in custody. Ed’s registration number is 68555-112 and he is currently residing in Terminal Island FCI, a low security prison in San Pedro, CA. Joel’s registration number is 68556-112 and he is currently residing in Lompoc USP, a medium security prison in Santa Barabara, CA with adjacent minimum security camps.  I’m not sure if Joel’s staying in the camp or not.  Medium security seems a little high for a white collar crime.  If he’s staying in the camp, then he’s got a bit easier than Ed, since low security has more security than medium.  

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