Investors Defrauded in $770M ATM Ponzi Scheme; SEC Files Charges Against Operators

The U.S. Securities and Exchange Commission (SEC) has charged Daryl F. Heller of Pennsylvania and his companies, Prestige Investment Group, LLC,  and Paramount Management Group, LLC, with orchestrating a multi-year Ponzi scheme that defrauded investors of approximately $400 million.

According to the SEC’s complaint, filed in U.S. District Court for the Eastern District of Pennsylvania, Heller and Prestige raised over $770 million from roughly 2,700 investors between January 2017 and June 2024. The funds were purportedly used to invest in ATMs operated by Paramount, with investors promised fixed monthly returns from income earned from ATM transaction fees and related charges. 

Instead, the SEC alleges Heller misrepresented the size and profitability of the ATM network, using new investor funds and high-interest, short-term loans to pay earlier investors. More than $185 million was allegedly misappropriated for personal use, including luxury purchases and unrelated business ventures. However, investors were misled into believing that Prestige and Paramount were running a successful, nationwide ATM network.

“Heller allegedly 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,” said Scott A. Thompson, Associate Director of Enforcement in the SEC’s Philadelphia Regional Office. 

The SEC is seeking permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest, and civil penalties against the defendants and a conduct-based injunction and officer and director bar against Heller.

The case follows recent SEC charges against Kenneth Thom, who promoted himself as a trading “luminary”, for defrauding over 50 investors in a separate $600,000 scheme.