$138M??

[the-real-steve]

Wow. Lots of people have lots of questions....

https://lancasteronline.com/business/lo ... ffbd5.html

[mike]

That seems like a wild amount of cash for an ATM company, even one with 6,000-10,000 machines, to owe its investors.

The owner and I have a mutual connection on Linkedin, but I have no idea who he is. Is he associated with the Amish/Mennonite community in some way? Seems like he had to have had some sort of relationship if numbers of them invested in his company.

In addition to owning Paramount, looks like he is board chairman of another similar company called ShareNet.

Looks like he is also co-founder of a nonprofit outreach to African children.

His LinkedIn profile states:

A results focused entrepreneur and venture capitalist that has founded many companies in the telecom, technology, energy, crypto, pharma and public exchange spaces. The majority of these assets are Portfolio Companies under Heller Capital Group which is a boutique private equity firm.

An August article talks about the lawsuit filed against Heller's company by one of its investors on behalf of all investors. The person bringing suit, the president of another investment group, "admitted he did not have the authority the file the suit, but he felt he had to act to protect the 2,700 investors and 25 funds."

None of this sounds good. Big chance of some kind of financial wrongdoing here, and yet another large investment scheme that Mennonites and Amish, among others, have gotten sucked into.

It never ceases to amaze me how much money some people have to invest into entities that are essentially gambling with their money. I suppose it's no more risky than picking stocks. But even then if you work with a reputable brokerage you would have at least a bit of guidance and good advice. Why on earth do people choose this sort of investing over more secure ways to save or invest money such as traditional savings accounts or CDs just for the sake of potentially earning a few more percentage points of interest? Is it really worth it?

[the-real-steve]

That seems like a wild amount of cash for an ATM company, even one with 6,000-10,000 machines, to owe its investors.

The owner and I have a mutual connection on Linkedin, but I have no idea who he is. Is he associated with the Amish/Mennonite community in some way? Seems like he had to have had some sort of relationship if numbers of them invested in his company.

If I have my story right, his dad was a minister in the LC church many moons ago. I had worked with his brother as a farm hand when I was a teenager.

Originally, he claimed to have 25,000 ATM machines. His second in command claims it is more like 10,000 at best.

[Judas Maccabeus]

Pyramid scheme?

[Grace]

That seems like a wild amount of cash for an ATM company, even one with 6,000-10,000 machines, to owe its investors.

The owner and I have a mutual connection on Linkedin, but I have no idea who he is. Is he associated with the Amish/Mennonite community in some way? Seems like he had to have had some sort of relationship if numbers of them invested in his company.

If I have my story right, his dad was a minister in the LC church many moons ago. I had worked with his brother as a farm hand when I was a teenager.

Originally, he claimed to have 25,000 ATM machines. His second in command claims it is more like 10,000 at best.

Yes, Daryl Heller's father and his grandfather were ministers in a Lancaster Conference church in the Clay/Lititz Area. I think his dad is retired at this point. I feel bad for his parents, they must be so grieved. Heller lives in a very upscale home in the gated Bent Creek community.

[mike]

Pyramid scheme?

It must happen so easily even to a legitimate enterprise. Attract investors by offering just a bit higher than market rate of return, and then when all that interest comes due, cash dries up quickly, so you attract more investors using the same tactic, which snowballs on you, and eventually you are insolvent.

[Ken]

It never ceases to amaze me how much money some people have to invest into entities that are essentially gambling with their money. I suppose it's no more risky than picking stocks. But even then if you work with a reputable brokerage you would have at least a bit of guidance and good advice. Why on earth do people choose this sort of investing over more secure ways to save or invest money such as traditional savings accounts or CDs just for the sake of potentially earning a few more percentage points of interest? Is it really worth it?

Well, there is a difference between investing in public companies (traded on the stock exchanges) and private companies such as this one. Public companies are pretty tightly regulated by the SEC. Public companies have to produce quarterly reports, audits from independent accounting firms, etc. And fraudulently reporting false information if you are a public company has severe criminal consequences. That doesn't mean it doesn't sometimes still happen (Enron, Theranos, etc.) but it is uncommon.

It isn't clear from the article but it looks like this is a private company for which none of those regulations would apply. So for investors it is pretty much buyer beware. What he did is still criminal fraud of course. But it is easier to hide and snowball this sort of thing when you aren't subject to quarterly reporting requirements, independent audits, etc.

One of my hobbies is studying investing. And I frankly if you are going to invest in equities, I don't see any good reason to do anything other than invest in broad-based low-fee index funds. Anything else is a fools game. As these investors are going to find out. In the religious world there is too much affinity-based investing based on trust, family connections, and so forth. It often doesn't end well. I recently spent the past year disentangling my elderly parents finances from their previous financial advisor whom they knew through long-time Menno connections. He was retiring anyway so it had to be done. There was no fraud or cheating happening. But he had their finances tied up in a whole complicated mess of individual stocks and annuities and funds that definitely paid higher fees and sales commissions to him. Probably to the tune of several tens of thousands of dollars over the decades. Did they get higher earnings as a result? No. They did no better and perhaps worse than had they just been invested in two or three generic low-fee index funds. But their finances were such a complicated mess that they had no real idea what they were really invested in and why.

[mike]

I don't see any good reason to do anything other than invest in broad-based low-fee index funds.

I agree.

[JohnH]

I suppose one should never invest in a business then.

[mike]

I suppose one should never invest in a business then.

That's the only kind of investing that I do.