Episode 1 - ATM King: Royally Screwed
ATM King: Royally Screwed
Episode 1
Plain Folk, Fancy Fraud
Overview
Lancaster County, renowned for its agricultural landscapes, small communities, and a deep sense of trust, became the latest epicenter of a financial nightmare. What started as a promise of steady cash flow from ATMs, pitched by familiar and trusted faces, turned into a devastating betrayal. The lure of reliable income masked a web of deception, leaving investors grappling with the area’s biggest financial scandal in its history.
“One of my favorite investments”
The ATM investment pitch was simple yet alluring. Promoters assured investors they could buy into a network of automated teller machines, strategically placed in high-traffic areas, and collect a portion of every transaction fee. It wasn’t speculative or glamorous; it was grounded and straightforward, a perfect fit for Lancaster County’s pragmatic and community-oriented residents.
This promise of stability resonated deeply, drawing in farmers, retirees, middle-class families, and several small business owners across Lancaster County and beyond. For these investors, the math was appealingly straightforward: Buy a machine, collect steady payouts, and watch your money work for you. The pitch framed the investment as a modern opportunity steeped in old-fashioned reliability. It wasn’t just the promise of profit that sealed the deal, it was the people selling it.
Cover page of the ATM investment pitch - 2022
The Faces Behind the Pitch
Dave Zook, a Lancaster County native, became the face of local opportunity. Having grown up in an Amish family near Atglen, Zook understood the community’s values and used this connection to foster trust. As the founder of The Real Asset Investor, Zook played a pivotal role as one of the primary fundraisers for the scheme.
Using seminars, webinars, and one-on-one meetings, Zook framed the ATM network as a low-risk, high-reward investment offering reliable income and tax benefits. He often highlighted his personal success with the investment, lending credibility to his pitch and reassuring those who might otherwise have been skeptical. For many, Zook’s ties to the community and his approachable demeanor made the opportunity feel safe and attainable.
Dave Zook
Jerry Hostetter, another influential figure, was equally pivotal in driving the scheme forward. Known locally for his business acumen and deep community involvement, Hostetter co-founded Prestige Investment Group alongside Heller in 2011. His career included ownership of the Hostetter Management Company, a hog management business that grew from managing 30,000 hogs annually to an impressive 1.7 million before he sold the company in 2004.
Hostetter’s reputation as a successful entrepreneur, bolstered by his leadership roles at Ephrata Community Hospital and Lancaster Country Club, lent further legitimacy to the operation. Drawing on his extensive connections and persuasive approach, Hostetter attracted countless investors, many of whom viewed him as a reliable steward of their money.
Jerry Hostetter
Behind Zook and Hostetter stood Daryl Heller, the mastermind orchestrating the entire operation. A lifelong Lancaster County resident, Heller cultivated a persona of integrity, drawing on his Mennonite schooling and a family legacy of pastors to present himself as trustworthy. However, this image masked his role as the central figure in the scheme.
As the head of Heller Capital Group and the owner of Paramount Management Group, Heller controlled nearly every aspect of the ATM network, from deploying machines to managing payouts, and used his position to manipulate investors with carefully constructed narratives and polished spreadsheets.
Daryl Heller
A Blueprint for Easy Money
In 2011, Daryl Heller unveiled what seemed to be an unmissable opportunity for everyday investors. The concept was simple: investor money would purchase ATMs that would be placed in high-traffic locations such as convenience stores, gas stations, and airports. They would split the transaction fees with the ATM management company and the owner of the site. For many, the allure of a “set-it-and-forget-it” investment was too good to pass up, especially when paired with spreadsheets showing impressive past returns and glowing testimonials from early participants.
Here's how it was pitched to investors:
Investment – The investor would purchase seven (7) ATMs at a total cost of $104,000 through Prestige Investment Group. The investment period would be seven (7) years, which was reported to be the useful life of an ATM.
Everybody makes money – The investor would receive 25% of all transaction fees generated by the seven ATMs, projected to be a little more than $2,100 per month. That is a return of approximately $181,000 during the seven-year period. The other 75% of the ATM fees would be split between the owner of the location where the ATM sits and the ATM management group.
Investor tax benefits – All seven ATMs would depreciate over the seven-year period, which could be used to reduce an investor’s annual tax burden. The pitch projected around $41,500 in overall depreciation. Thus, the total return on the overall investment would be just shy of a quarter-million dollars (~$223,000).
For years, the system seemed flawless. Investors received consistent and substantial payouts, often earning returns of 10% to 15% annually, which reinforced their confidence in the operation. Families across Lancaster County and beyond began to see this opportunity as not just a way to supplement their income, but as a pathway to realizing long-term dreams, whether it was funding their children’s education, expanding a family business, or enjoying a comfortable retirement. The network’s apparent success created an atmosphere of shared optimism, with word-of-mouth testimonials and glowing success stories drawing even more people into what seemed like a golden opportunity.
Court documents show the ATM money flowcharts used by Heller
"I invested in the ATM space and ever since – I’m talking every month – the cash flow just keeps pouring in. It has become my most passive investment and one of my favorite investments."
2017 episode of the “Real Estate Investing for Cash Flow” podcast where Zook appeared with Heller
Cracks Appear in the Foundation
Beneath the surface of this seemingly perfect operation lay a web of systemic flaws that would eventually unravel the entire network. Many ATMs were non-existent. Machines that did exist were often broken, unstocked, or poorly placed in locations with minimal foot traffic, generating negligible income and falling far short of the promised revenue expectations. Mismanagement amplified these problems as key operational funds, intended to repair machines, replenish cash, and sustain payouts, were diverted elsewhere. Heller’s focus on maintaining appearances and securing new investors meant that critical reinvestment into the network was neglected, accelerating its collapse.
Lulled by the reassurance of their monthly return, investors rarely questioned the operation’s integrity. By early 2024, however, the illusion began to falter. Returns became inconsistent, and some investors started noticing discrepancies in reports. Requests for detailed information about specific machines were often met with vague or contradictory answers. “I just wanted proof my machine was generating revenue,” one investor recalled in testimony, “They couldn’t even tell me where it was located.”
As trust eroded, Zook continued promoting the investment while Heller worked tirelessly to sustain the illusion, using altered spreadsheets and delivering unwavering reassurances to keep investors placated. By the time the flaws could no longer be ignored, the network’s collapse was inevitable. The operation, built on misplaced trust and a carefully curated illusion, left investors grappling with financial devastation and broken promises.
"I just wanted proof my machine was generating revenue...they couldn't even tell me where it was located."
Diagram of a standard Ponzi scheme
What's Next?
In the next episode, the unthinkable happens: Payouts stop. Investors who once trusted in the stability of the ATM network are left scrambling for answers. Excuses pile up, lawsuits begin, and an all-out effort begins by thousands to recoup whatever money they can. Stay tuned as we delve into the collapse and the unraveling of one of Lancaster County’s most shocking financial betrayals.
Episode Resources
CountySuite: CI-24-06012, CI-24-06012 (Lancaster County Civil Court). Retrieved December 21, 2024, from https://portal.lancaster.pa.countysuite-azuregov.us/courts.civil.publicsearch/(S(ea3uhz5fobhgfazjvc3uyva4))/ng/case/1143851
Umble, C. (2024, October 1). Investors in Lancaster-based ATM network await buyout offer after months of missed payments. Lancaster Online. https://lancasteronline.com/business/local_business/investors-in-lancaster-based-atm-network-await-buyout-offer-after-months-of-missed-payments/article_4db3b574-7f69-11ef-a7eb-e703bbb277f3.html
Disclaimer and other information
As these episodes pick up attention, I figured it might be best to document this disclaimer (most Watchdog articles don't get attention outside of our small town):
The author of this blog has no financial interest or investment, personal or familial connection, bone to pick, axe to grind, bellyache, personal vendetta, ulterior motive, or any other wild and/or sordid arrangement, with any of the parties identified or discussed in this series. It's simply personal intrigue at what appears to be a historical financial scandal happening right here in our local communities. I'm not a journalist, make no claims to such, and have no interest in competing with those who provide the news as a career. My goal is simply to provide the information I've compiled through news reports, court documents, social media, and personal contacts with investors in a comprehensive manner that puts all of the pieces together. There's more than just the hot local Prestige v. Paramount case - the numerous creditors filing lawsuits and dozens of our own neighbors losing jobs just before Christmas paint a picture of unbridled greed. <--- Again, you know, that's just, like, my opinion, man.
For another series of news reports, please view the many articles written by LancasterOnline reporters Dan Nephin and Chad Umble. (A paid subscription is necessary to view most articles)