ATM Ponzi Scheme
Ponzi Scheme fraudsters purported to sell non-existent machines to investors and then lease them back from those investors in exchange for monthly “lease” or “rent” payments. However, in general, the machines did not exist, and fraudsters used the money from new investors to pay earlier investors monthly returns.
GEABP, led by partner Michael Devorkin, brought a putative class action in New York federal court on behalf of certain victims, and worked with attorneys in California, who brought separate class action, and with SEC Receiver to prosecute claims against financial institution that allegedly aided and abetted the scheme.
GEABP, working with other firms and the Receiver, negotiated and obtained court approval of final settlement of $33.55 million, enabling victims to recover approximately 46% of their losses, in what the Court considered “meaningful relief for investors who lost money,” which is “exponentially more than the typical result” in similar cases.