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Raleigh man arrested in $80M Ponzi scheme

Posted September 21, 2009

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— A Raleigh man has been charged in an $80 million scheme to defraud people investing in automated teller machines, authorities said Monday.

Vance Moore II, 55, was arrested Friday at a warehouse at 1000 Management Way in Garner. A second man charged in the case, Walter Netschi, 62, of McKinney, Texas, surrendered Monday to federal authorities in New York and was released on a $3 million bond, authorities said.

ATM generic, cash withdrawal FBI: ATM scheme 'one giant cash machine'

Moore has residences in both Raleigh and Florida, according to court documents, but a search of Wake County property records turned up nothing under his name.

The U.S. Attorney's Office in Manhattan unsealed an indictment Monday charging the pair with nine counts of wire fraud and one count of conspiracy to commit wire fraud.

Authorities said the men solicited money from investors from 2005 to January 2008 by claiming they were placing about 4,000 ATMs in retail locations throughout the country. They told prospective investors that the machines would generate revenue streams by charging fees for withdrawals. About 90 percent of the machines didn't exist or were never owned by Moore and Netschi, authorities said.

The men would use money from new investors to provide returns to earlier investors, authorities said, and Moore would make up excuses when investors questioned discrepancies in their monthly reports or asked about ATMs they thought they had purchased. In one instance, authorities said, Moore told an investor that an ATM had been moved to a new location in Florida after the person visited a hotel where the machine was purported to be and couldn't find it.

"The defendants claimed the revenue in their investment opportunity derived from ATM fees. In fact, it was a classic Ponzi scheme," Joseph Demarest Jr., assistant director of the FBI in New York, said in a statement. "The scheme itself, until discovered, was one giant cash machine."

Raleigh lawyer Kieran Shanahan said he was brought into the case last year by a group of California investors who had lost $30 million in the alleged ATM scheme.

"These guys who have been indicted sold the same machines to multiple people, and it was a pure greed-driven Ponzi scheme," said Shanahan, a former federal prosecutor.

He said he hopes authorities can recover some of the investors' money, but said it's unlikely that will happen.

"It is my experience, both as a federal prosecutor and having looked at these transactions, that it is doubtful these investors will ever see their money again," he said.

38 Comments

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  • dlb800 Sep 22, 2009

    I think we should vote against ANY incumbant politician for the next 2 or 3 elections, that would send a message to them.

    As for criminals like this one, just make the punishment more severe. Capital punishment. If that doesn't prevent people from committing crimes, it sure will stop them from doing it again.

    If you don't think capital punishment fits the crime, then understand that's exactly why people will do the crimes. You need to make the punishment MUCH worse than the crime, and that may deter them from committing crimes.

  • Mr. Middle of the Road Sep 21, 2009

    Nice try at spinning it affirmative, but no one is buying it. The bottom line is there are crooked Republicans and there are crooked Democrats. Neither party has a monopoly on it. A lot of elected Republicans have been caught in affairs lately but that doesn't mean Republicans are any more prone to it than Democrats. Out own former Senator is a good example.

  • superman Sep 21, 2009

    A fool and his money is soon parted!

  • spinnerdunn Sep 21, 2009

    Yes, lets make a story about the Easter Bunny into an illogical political rebuke of Lenin's role in the Bolshevik revolution.

    After that, a recipe for pancakes!

  • affirmativediversity Sep 21, 2009

    Mr Middle of the Road,

    Remember the standards you are setting and the rules you want to play by.

    If Mr. Moore is a Republican, so be it...that would probably make him even more appealling to Geithner and the Whitehouse because:

    First they could trot him out as their "bipartisan" criminal contact, AND,

    When they get caught (remember they won't be in office for ever and by their rules the next administration can "reinvestigate") they can toss a Republican under the bus...that will probably be a nice change for you.

  • Every Good Boy Does Fine Sep 21, 2009

    Really?

    http://money.cnn.com/2009/01/06/news/economy/social.security.fortune/index.htm

    You can paint it any way you like but if more folks are on the dole than are paying into the dole...eventually the payers will have to abandon paying because the cost will be far too high and the system has to collapse. Ponzi. Even this article says that changes will have to be made. Those changes will have to be more in and less out. Again, the payers will reach a break point. We can't base our retirement on the promises of liars.

  • JOBMO Sep 21, 2009

    "bill brasky, thanks for reminding people about phil and wendy graham. they were both key players in the events that lead up to the financial collapse(planned theft) and of course the enron scamdal(more planned theft, or if you prefer" transferal of wealth from the needy to the greedy). how convenient that graham decided it was time to head back to texas for some family time, just before it hit the fan."

    Yeah Phil "The Recession is all in your mind" Graham has been mighty quiet lately hasn't he?

  • dbcooper41 Sep 21, 2009

    bill brasky, thanks for reminding people about phil and wendy graham. they were both key players in the events that lead up to the financial collapse(planned theft) and of course the enron scamdal(more planned theft, or if you prefer" transferal of wealth from the needy to the greedy).
    how convenient that graham decided it was time to head back to texas for some family time, just before it hit the fan.

  • TommyK Sep 21, 2009

    we all laugh and we all criticize, but what we fall to realize is that this all over the place. People have found out how to scam each and every one of us. It's just the smaller ones that they bust. Imagine if they dug into AIG and your banks deeper what they would find. It's a corrupt society that we live in and it matter if you republican, democrat, white, purple, old, young, etc. It's a means of survival of the fittest now a days. Feel sorry for my kids and their kids they are the ones that will pay

  • Mr. Middle of the Road Sep 21, 2009

    affirmative, sounds like Mr. Moore was a Republican. Oops!

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