- Key insight: Daryl Heller weaponized valuations of ATM portfolios to conceal poor liquidity.
- Expert quote: An SEC prosecutor said Heller "exploited his connections to his community," portraying ATM investments as safe and reliable.
- Supporting data: $770M raised from about 2,700 investors; $185 million allegedly misappropriated.
Overview bullets generated by AI with editorial review
Federal authorities recently charged Daryl F. Heller, a Pennsylvania resident, and his companies, Prestige Investment Group and Paramount Management Group, with orchestrating a Ponzi scheme involving investments in ATMs.
The alleged scheme raised over $770 million from approximately 2,700 investors and resulted in estimated losses of $400 million. Financial institutions that made loans to Heller collateralized by the ATMs are pursuing this debt in bankruptcy proceedings.
The U.S. Attorney's Office for the Eastern District of Pennsylvania filed charges against Heller in August, to which he pleaded not guilty. The Securities and Exchange Commission (SEC) followed with parallel charges this month.
An attorney representing Heller in the cases did not immediately respond to a request for comment.
The SEC alleged Heller exploited community connections, deceiving around 2,700 retail investors, many from Amish and Mennonite communities, into believing in "safe and reliable" ATM investments.
Scheme overview
From January 2017 through June 2024, Heller and Prestige solicited investments, promising approximately 25% returns from a purportedly successful, nationwide ATM network operated by Paramount, according to prosecutors.
They told investors their money would acquire and operate ATMs, generating fixed monthly distributions from transaction fees. Many of these investors included retail individuals, notably members of the Amish and Mennonite communities in Heller's Lancaster, Pennsylvania, area.
Scott A. Thompson, Associate Director of Enforcement in the SEC's Philadelphia Regional Office, alleged that Heller "exploited his connections to his community and deceived retail investors into thinking the ATM investments were safe and reliable, when in reality he used only a fraction of investor funds to buy ATMs and misappropriated $185 million."
Fraudulent practices
Federal prosecutors allege Heller operated a classic Ponzi scheme, using new investor funds and high-interest, short-term loans from merchant cash advance companies to pay distributions to earlier investors.
Heller also allegedly misappropriated approximately $185 million of investor funds for his personal benefit, including acquiring a beach house on the New Jersey shore and financing his other businesses, some of which were cannabis-related.
Investigators highlighted several key deceptive practices relevant to financial institutions:
Misrepresented network size and profitability: Heller and Prestige allegedly overstated the size and profitability of the ATM network to investors and potential investors.
Internal Paramount records contradicted the inflated figures provided to investors, showing discrepancies of over 10,500 ATMs in service and over $380 million in ATM fee revenue compared to actual performance in just a 21-month period.
Fraudulent ATM valuations: The ATM portfolios Heller sold to investors were made up of used and often damaged or inoperable ATMs that Paramount bought for as little as $527 each.
Heller marked up the value of these ATMs by sometimes over 42-fold. Many of these machines then sat unused in warehouses, generating no income, according to prosecutors.
Manipulated investor presentations: During in-person investor presentations, Heller manipulated Paramount's ATM portal. He instructed an employee to create a "cherry-picked" subset showing only high-transaction-volume ATMs.
Investors selecting "random" ATMs from this portal unknowingly viewed only top performers, concealing the true poor performance of the overall network.
False financial reporting: Prestige, under Heller's direction, issued false account statements, distribution notices and even Schedule K-1 tax forms with inflated ATM income and depreciation figures.
These documents created the false impression that Paramount operated one of the nation's largest and most profitable ATM networks.
The unravelling
The scheme began collapsing in spring 2024 when key fund managers stopped recruiting new investors, according to prosecutors.
With new money drying up, Prestige stopped making monthly distributions to existing investors in April 2024. Heller offered a series of false excuses, including costly ATM upgrades and a purported acquisition, eventually promising a "complete buyout" to return investors' capital. These buyouts never materialized.
The unraveling triggered a cascade of legal actions.
Legal fallout
The investment funds to which Heller sold the allegedly inflated ATM portfolios filed a lawsuit against Paramount in August 2024, securing a $138 million judgment against the company in November 2024.
However, Heller failed to comply with court orders to provide an accurate ATM inventory and transfer title, instead selling ATMs belonging to the funds to a third party and diverting the proceeds.
Numerous third parties, including banks, merchant cash advance companies and ATM vendors, also filed lawsuits against Heller and his entities for breach of contract related to unpaid loans.
Heller filed for Chapter 11 bankruptcy in New Jersey in February 2025, listing unsecured claims totaling $137.4 million. Discovery in his bankruptcy case revealed he reported a net worth of $300 million a year prior.
Courts have since appointed an examiner to investigate allegations of fraud, dishonesty and mismanagement by Heller.
The U.S. Attorney's Office announced criminal charges against Heller, including securities fraud and multiple counts of wire fraud, and is looking for the court to force Heller to forfeit the fraudulent proceeds.
The SEC seeks permanent injunctions, recovery of defrauded funds with prejudgment interest and civil penalties against Heller and his companies. The commission is also looking to bar Heller from serving as an officer or director of any U.S. company.
