The pitch was as simple as it was enticing: purchase an ATM for $12,000 or so and receive 50 cents on each transaction it processed. Nationwide Automated Systems Inc., the sponsor of the offer, was promising annual returns of up to 20 percent.

There was, of course, a catch: Investors were prohibited from contacting the shops and other places their ATMs were located.

That, according to the Securities and Exchange Commission, was because only a handful of the 31,000 machines NASI sold actually existed. The SEC shut down the company late last month, saying its principals, Joel Gillis and Edward Wishner, were actually running a $123 million Ponzi scheme, with most of the investors living in the L.A. area.

“There were doctors, lawyers and CPAs who invested substantial sums of money,” said Alan Broidy, a bankruptcy and commercial law attorney in Century City who’s representing about a dozen NASI investors. “I believe it’s more than $123 million. It’s not Bernie Madoff, which was in the billions, but this is not a mom-and-pop Ponzi scheme.”

Two days after the SEC’s initial complaint, filed under seal Sept. 17, NASI filed for Chapter 7 bankruptcy protection. A federal judge agreed to the government’s request to halt Gillis and Wishner from conducting business two weeks later, ordering NASI’s assets frozen and prohibiting the pair from destroying documents. The complaint was unsealed earlier this month.

Gillis and Wishner, the complaint says, told investors NASI owned the automated teller machines. It would sell them the ATMs and lease them back, paying investors with the revenue generated by fees of $2.50 or $3 on each transaction. While it claimed to have as many as 31,000 ATMs in its network, the SEC said, NASI generated revenue from just 235 – nowhere near enough to support payments necessary to keep up with promised returns.

The company, formed in 1996, was located on the third floor of a mid-rise office building that sits on a hill in Calabasas, overlooking the 101 freeway. It brought in about $123 million over the last 20 months, the complaint alleges, and “less than 2 percent of that amount represents legitimate ATM transaction revenue.” The balance, it says, was “overwhelmingly” money coming from new investors.

“The scale of defendant’s fraudulent offering,” the complaint says, “is staggering.”

SEC officials declined comment. The company’s voicemail box no longer accepts messages, and neither Gillis nor Wishner, both of whom live in Woodland Hills, replied to emails.

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