SEC charges once-popular ATM operator Prestige Investment Group of being a Ponzi-scheme and losing $400 million of investor money (and CEO Daryl F. Heller of misappropriating $185 million)

For years, enthusiastic Prestige investors couldn't pile in fast enough in and gushed about being “paid like clockwork”. But in the end, the house of cards came crashing down with investor lawsuits and jaw-dropping losses. Yet many Private Investor Club members spotted glaring red flags from the beginning and avoided the carnage completely, by walking away. Here’s how and why.

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The ATM Machine Pitch

From 2017 to 2024, Daryl H. Heller and his Prestige funds raised a whopping $770 million from 2,700 investors. The pitch was simple:

• Funds would buy and operate super safe, and boring ATMs.

• Each machine would generate steady surcharge income.

• Investors were told to expect close to 25% annual returns.
  

For many, the idea of consistent cash flow from everyday machines was very appealing. And so they piled in.

And for years, Prestige looked fantastic. Many investors gushed about being paid “like clockwork”. And Prestige’s reputation and asset base just grew bigger and bigger.

The Collapse: From Darling to Disputes

Then in late 2023, distributions suddenly stopped. At first they were just “delayed". But month after month, the payments never arrived. 

And then nervous investors began asking for answers:

• Some demanded to review the ATM fleet.

• Others pushed Heller for repayment schedules and/or buyouts.

• According to the SEC, Heller responded with new promises—but never delivered.

  
  

Multiple lawsuits followed, but investors were unsuccessful in recovering their money  before the SEC stepped in. 

And by then, $400 million of investor money was gone.

“Oh what a tangled web we weave”

The SEC claims that behind the scenes Prestige was actually propped up by:

• Distributions far exceeding profits.

• Ponzi-style payments from new investors or loans.

• Broken and/or non-existent ATMs.

• $185 million allegedly misused by Heller personally.

  
  

Heller has since filed for Chapter 11 bankruptcy and also faces parallel criminal charges.

“Don’t Just Walk Away…Run”

The Private Investor Club (PIC) is a group where investors source new deals and share their due-diligence.  And many PIC investors were also shown this deal.

On paper, it promised unusually high yields. But due diligence uncovered serious red-flags:

• Returns: Promised returns that look way too high for the claimed risk, are often tied to Ponzi-schemes. And at that time, an investor could have expected a safe return of a few percent per year (from U.S. Treasuries). Yet Prestige marketed the ATMS as both very safe, but supposedly yielding ~25%.

  
  

  

  And they never could explain the mismatch (and this was a giant, glaring red flag for many).
  

• Transparency: Ponzi-scheme are generally very secretive about low level details and often operate like black-boxes (where investors don’t fully understand how they work).So Heller was asked for proof that the pro-forma math added-up, by providing business financials (which would allow an investor to determine if they felt the underlying business model was plausible or not). But Prestige declined. For many, that lack of transparency was unacceptable and an enormous dealbreaker.
  

• Inexperienced leadership. I personally don’t want a green sponsor learning expensive lessons with my hard-earned money. And so I want to see them have a lot of experience: full asset class cycle and with little to no investor money lost. Here was Prestige’s experience:

  

  No one at the top had any prior experience managing investment funds nor operating large ATM businesses. For me (and many others), this was not even close to being sufficient. And even if none of the other (very major) problems had been there, this alone would have been immediately disqualifying. I'll also add that Heller literally claimed he rescued orphans! In my opinion, this was clearly an emotional pitch to distract from the lack of appropriate experience.
  

• Aspirational wealth pitch: Prestige used an aspirational wealth pitch (including showing an ATM literally throwing money in the air like confetti):

  
  

  

  This isn't something that's motivational to a sophisticated investor who is already wealthy. And so in general, high-quality experienced sponsors who are targeting sophisticated investors do not use this sort of pitch. On the other hand it's generally used by a sponsor who markets to unsophisticated investors to warm them up and motivate them to part with their money. And what I've found is that most deals targeted to unsophisticated investors have multiple things I personally can't stomach. So, an aspirational wealth pitch is a red flag for me personally.
  

• Too many promoters: Legitimate, successful experienced sponsors usually will organically develop an strong following of investors and rarely need outside promoters. But this deal was notably unique in that it was pushed by not just one but a small army of third-party promoters (including David Zook, Jeremy Roll, and others). Usually that's only required by green sponsors. And this was another red flag for me (and others).Additionally, every Ponzi scheme needs a steady flow of new investors to continue running. So in retrospect, this was how Prestige (allegedly) pulled that off.
  

Ultimately, a disciplined review process meant many PIC members avoided the major losses that have since been alleged by the SEC.

The Hall of Shame

If convicted, Heller will join an infamous list of other Ponzi organizers:

• Bernie Madoff ($65B, 2008) – fake trades, steady gains

• Allen Stanford ($7B, 2009) – “safe” CDs

• Jay Peak EB-5 ($350M, 2016) – ski resorts

• BitConnect ($2.4B, 2018) – crypto trading pitch

• Daryl F. Heller (alleged, 2025: $770M) – ATM machines
  

In my view, a striking element of Prestige, is how ordinary the pitch was. Unlike exotic derivatives or speculative crypto trading, ATMs are familiar and tangible. That ordinariness probably made the pitch even more convincing to many.

The “They Pay Like Clockwork” Trap

Some investors ignored the red flags and were swayed by peer feedback: 

“I’ve been paid like clockwork for years.”

That observation was true—but also a classic hallmark of Ponzi structures. 

Early investors nearly always get paid, because fraudsters use new money to keep the illusion alive. And this house of cards can go on for years before the entire structure collapses.Bernie Madoff’s investors said the same about their steady monthly returns. Stanford’s CD holders bragged about never missing an interest payment. Even BitConnect investors boasted about daily crypto payouts. Ultimately all were Ponzi-schemes.

So payment consistency is no reassurance of a legitimate investment. And in my opinion, it’s not a valid replacement for looking at everything else.

Painful Lessons for Investors

PIC members who demanded proof, questioned returns, and checked management claims, ended up avoiding losses. So in my opinion, the key lessons of Prestige were:

• Returns that are too good to be true … usually are.

• Transparency is non-negotiable.

• Clockwork returns are no proof of safety. And peer referrals aren’t a substitute for due diligence.

• Hard assets aren’t always hard.

• Experience and leadership background matters.

Key Takeaways

• SEC alleges Heller raised $770M in a Ponzi-like ATM scheme.

• 2,700 investors, $400M in losses.

• PIC members avoided exposure via thoughtful due diligence.

• Clockwork returns can be a red flag.

• Allegations remain unproven in court, but lessons are timeless.

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