The president of a Calabasas company accused of orchestrating a 13-year-long Ponzi scheme that defrauded nearly 2,000 investors of more than $100 million pleaded guilty Wednesday.
Joel Barry Gillis, 74, operated Nationwide Automated Systems Inc. with Edward Wishner, 76, the company’s vice president, who pleaded guilty last week. The Justice Department said the men, both Woodland Hills residents, promised investors 20 percent annual returns if they purchased an ATM.
The government said Gillis and Wishner enticed investors to pay about $12,000 for each ATM, leasing the machine back to NASI in return for a payment of 50 cents for each transaction the unit processed. In fact, prosecutors said, only a few of the ATMs existed; payments to early investors were made not from transaction proceeds but from ATM purchases by later investors.
The U.S. Securities and Exchange Commission shut down NASI in late September and the matter was investigated by the FBI, which led to federal fraud charges filed last month.
Gillis and Wishner each pleaded guilty to conspiracy, two counts of mail fraud and one count of wire fraud. They are scheduled to be sentenced in federal court on March 30 and could face up to 80 years each, according to a statement released Wednesday by the Justice Department.
Check out previous Business Journal coverage here.
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