Episode 2 - ATM King: Royally Screwed
ATM King: Royally Screwed
Episode 2
The Check's in the Mail
Overview
The ATM investment scheme in Lancaster County began as a beacon of financial opportunity but concealed a dark reality. Engrained community figures marketed it as a foolproof way to earn passive income, yet beneath the surface, financial mismanagement painted a far grimmer picture. This episode reveals how a trusted local operation unraveled into one of the region’s most devastating financial collapses, leaving 2,700 investors scrambling to understand how their savings disappeared in a cascade of mismanagement, deception, and false promises. We’ll go through all of the events of the area’s biggest Ponzi in timeline format to make it easier to see it play out.
Red Flags Everywhere
Investing in ATMs can be profitable, especially when machines are located in high-traffic locations like convenience stores, busy retail areas, and nightlife hotspots. Regardless of how well the machine performs, most investors won't recover their initial costs until one year of ownership. In order to really understand what happened between April 2024 and October 2024, let's dive into some of the inner workings of the Heller's operation and highlight the red flags that most only saw in hindsight.
Red Flag #1
Heller charged investors approximately $15,000 per ATM, all expenses included. (An investment required the purchase of seven ATMs). However, the typical market cost for an ATM with a location contract in place is generally $2000-8,000 per machine.
Heller claimed an empire of 25,000 ATMs. At a markup of $7,000 (maximum market cost) each, Heller (and others) enjoyed a profit of approximately $175 MILLION.
Red Flag #3
Heller's investors were told that they would receive monthly checks of ~$2,100/month immediately after the ATMs were operational, which generally happened within 75 days of purchase, regardless of machine performance.
If Heller owned 25,000 ATMs, there would be a fixed monthly cost of $7.5 MILLION - regardless if the machines made that or not.
Where does the money come from when the machines aren't even plugged in?
Red Flag #2
Heller kept all the money within his reach from the minute the investor signed the check. Not only was he making money off the sale of the ATMs, he also controlled all of the money the ATMs made.
2024 Timeline: April - October
April 2024
On April 29, 2024, investors expected their monthly payout but instead received an unsettling email from Daryl Heller, CEO of Prestige Investment Group. The email announced an abrupt shift from monthly to quarterly payouts, with the next payment scheduled for June 30, 2024. The email emphasized this move as a "necessary adjustment to align with evolving market conditions," but offered little concrete reasoning. Heller promised this change would "ensure the long-term stability of the investment," a claim that did little to calm the mounting worries of investors.
For years, they had come to rely on consistent monthly returns to pay bills, support families, and reinvest for their futures. The announcement jolted the sense of stability and trust that had kept the scheme afloat. Behind the scenes, this decision was not proactive financial planning but a desperate bid to buy time amidst growing operational struggles. The April email set the stage for the larger unraveling that would soon engulf the entire operation.
Heller's initial email to investors advising that they won't get paid in April
May 2024
By early May, mounting concerns turned to frustration as Heller issued a series of follow-up emails that did little to quell investor fears. One email referenced "unexpected market pressures" and "temporary liquidity challenges," while another vaguely promised that "operational adjustments are underway to stabilize cash flow." Yet, these assurances were undermined by the lack of specifics, leaving investors questioning the true extent of the issues. Attempts to contact customer support for clarity were met with either automated responses or prolonged wait times, further eroding trust. It wasn’t long before investors began exchanging rumors and anecdotes on social media and other forums, hinting at the chance their money is completely gone.
Zook: "I need to protect myself..."
Nearly a month after the initial missed payment to investors, one of Prestige's top fundraiser, Dave Zook, went into CYA (cover your ass) mode. He puts Heller on notice that any of the unmet demands will result in legal action. Those demands included:
Financial statements for Paramount Management
Proof of cash balances on hand for Paramount and its companies
A meeting with Paramount leadership before May 30th (within 6 days of the email)
Demand for answers by Zook in May 2024
June 2024
The end of June proved disappointing to investors as Heller's promised date of June 30 passed without payments. This failure to deliver triggered widespread alarm among his 2,700 investors. Investors who had initially remained patient began organizing calls and meetings, sharing their frustration and growing skepticism. Meanwhile, some investors attempted to trace the locations of their machines, only to uncover instances of non-operational ATMs or empty spots where machines were meant to be. Unease turned into outright panic as the month closed with no sign of resolution.
Receiving no response from his May 24th email, Zook began legal proceedings as promised. On June 14, Kelley-Clarke legal group, representing Zook, accused Heller of lacking transparency and failing to provide documents to dispel rumors of fraud and self-dealing. The firm demanded the following of Paramount with expected dates of compliance:
June 21 - Financial statements, proof of cash balances, and correspondence between Paramount and any affiliates regarding the decision-making process of recent fund distributions
June 25 - An in-person meeting with Paramount leadership
Dave Zook's legal team demand letter to Paramount
View the full letter
Heller responded on June 20 by email directly to Zook and offered a litany of excuses for the missed payments. Missing from that email were any requested documents or an attempt to have an in-person meeting.
Zook testimony regarding Heller's excuses for missing payments
Throughout July 2024, Daryl Heller’s communications to investors grew increasingly desperate as promised payouts continued to elude investors.
On July 10, Heller sent an email claiming, “We are still waiting on funding… Expect it later today/overnight,” but the day came and went with no payments issued.
Just twelve days later, on July 22, he announced yet another delay, stating, “We are putting the final payment date of July 31 to be conservative… We cannot allow another date reset.”
July 2024
Zook attorney demand for Paramount to preserve evidence
View the full letter
These assurances rang hollow as investors grew weary of the shifting excuses, but at least they were receiving communication. As evidenced by two letters from Zook's attorneys, Paramount continued to ignore their legal demands. Attorneys for Zook sent certified letters to Paramount on July 17 and July 24 to demand that evidence be preserved and also be sent to them.
First Investor Lawsuit Filed
August 2024
By late August 2024, tensions between investors and Paramount Management Group reached a breaking point.
Lawsuit Filed: Prestige Fund v. Paramount Management Group LLC
On August 23, Jerry Hostetter, the minority owner of Prestige, had attorneys filed a lawsuit on behalf of investors in Lancaster County Court against Daryl Heller and Paramount Management, accusing them of withholding $65 million in owed payments. Matthew Haverstick was listed as the primary attorney for the case.
Demands: Investor control of Paramount Management Group
The investors demanded immediate court intervention to assume control of the struggling ATM network, citing “immediate and irreparable harm” if left unchecked. They alleged that Paramount’s failure to remit payments since April 2024 had created an escalating crisis, with the total unpaid amount surpassing $80 million when factoring in August’s missed payments.
Initial filing by investors against Paramount
Information Discovered: Dave Zook's affidavit identifies another key player
Included in the lawsuit documents was an affidavit from August 22, in which Zook explained that Paramount was supposed to collect monthly ATM revenue and distribute it as contractually obligated to investors, vendors, site owners. Zook testified that Jorge Fernandez, a former Paramount employee, notified him on August 8 that the cash supply vendor for Paramount had stopped services due to non-payment. The insider also stated that ATMs owned by Paramount in Puerto Rico were being shut down for the same reason.
Proceedings: Zook's testimony and Judge's decision
Four days after the filing on August 27, the court heard initial arguments. Plaintiffs argued that seizing the ATM network was critical to prevent further financial damage. During the hearing, Paramount admitted not making payments for five consecutive months but defended its operations, claiming that ongoing efforts to restructure and secure funding would stabilize the situation. Judge Leonard Brown III ultimately denied the emergency control request, stating the plaintiffs had not demonstrated that Paramount’s mismanagement required such drastic intervention. He concluded that the dispute could be adequately addressed through monetary damages.
Zook's testimony described Fernandez someone with "deep connections and relationships in the ATM industry..." According to an investor pitch presentation from 2022, Fernandez is lauded for his years of expertise and leadership in the electronic payment industry.
Of note, the presentation points out that Fernandez was the Senior Vice President of Cardtronics. According to historical industry news, he managed marketing strategies along with mergers and acquisitions from 2008-2017. From there, Fernandez joined Paramount as Chief Development Officer.
One may ask themselves: Why would such a successful leader move from a role as Senior Vice President of the world's largest ATM management group in Houston, Texas, to Chief Development Officer at a significantly smaller operation in Lancaster, PA?
Months later, this question will be asked again when a Reddit user claiming to be Fernandez himself claimed to have been in charge of Paramount's acquisitions, but had no ties to Heller's "inner circle".
Who is Jorge Fernandez?
Slide from investor presentation highlighting Fernandez
View the investor presentation
September 2024
The complicated arrangement of ownership and control of the Prestige group led to a brief power struggle that played out in the courts in September.
September 12 - Attorneys from the LeVan Stapleton Segal Cochran law firm filed paperwork to enter the case as representatives of the Plaintiff, followed by an immediate request to discontinue their lawsuit against Paramount. However, this firm did not represent the original Plaintiff, Hostetter.
September 12 - In a response that same day, the original Plaintiff's legal team filed an emergency motion to dismiss the previous requests. In the filing, it was suggested that the LeVan group circumvented normal court procedures by filing the paperwork with the court first, then notifying all other parties. It also suggests that the LeVan group represents Heller and that Heller was actively involved in the latest scheme and provided text messages to support the claim.
Hostetter's legal team response to Heller-backed attorneys
Despite the legal sideshow, the lawsuit triggered settlement discussions. On September 24, the parties agreed to pause litigation and pursue a potential buyout proposal. The conditions for putting the lawsuit on hold while pursuing a settlement agreement were strict:
Paramount must present settlement terms to Prestige Fund owners for their approval during a webinar which must occur by October 1
Paramount would need to create the proposal and provide all of the logistics of the settlement process, including a presentation to Prestige Fund owners, by September 26
The webinar must be conducted by October 1
An initial payment of the settlement would be made no later than October 21
All money owed to settle the case would need to be paid by November 20
For everyone involved, the question was: Would Heller make the initial payment by October 21?
Heller's Buyout Proposal
October 2024
On October 1, Heller presented a buyout proposal to investors via webinar, offering partial repayment based on how long individuals had been invested. He framed the proposal as the best path forward, claiming it would allow investors to recover most, if not all, of their initial contributions. However, the buyout terms were uneven. Long-term investors would receive less, as their original investments had already yielded payouts, while recent investors would receive higher reimbursements to account for minimal returns.
Investors' decision on buyout: Overwhelmingly, yes
Voting on the settlement began October 2 and closed October 8. An average of 87% of investors across all 25 funds approved the buyout, surpassing the required majority threshold.
Buyout Timeline: To be completed by November 20
This decision triggered a court-mandated timeline for repayment: 40% of the owed amount was to be distributed by October 21, with the remainder due by November 20.
Another contract broken: Heller missed the first buyout payment
As the first payment deadline loomed, Heller postponed the payouts until October 31, citing “administrative delays” and unresolved documentation. He also promised to increase the initial payment from 30% to 40%.
On October 31, investors received yet another update that funds were still not ready, further eroding confidence in Heller’s leadership. It was later revealed that no signed agreements with funding partners existed, raising questions about whether the settlement plan was ever viable. By the end of October, frustration turned into outright outrage as investors realized that, once again, they had been misled. Many began organizing independent legal actions to recover their funds.
Creditors Close In
While Daryl Heller’s ATM network appeared to crumble under mounting investor lawsuits and financial mismanagement, a closer examination reveals a broader pattern of legal troubles that cast further doubt on his business dealings. The money is most likely gone, and everybody wants just a sliver of what's left in an attempt to salvage anything from the investment.
Click on the links below to see all of the cases that involve Daryl Heller (and often his associates) as a defendant. Each link will open up a new tab, so you may need to disable your pop-up blocker.
First National Bank v. Daryl Heller (2 cases)
Orrstown Bank v. Daryl Heller (3 cases)
What's Next?
The fallout from the ATM scheme accelerates as the magnitude of betrayal becomes undeniable. In the next episode, we peel back the layers of Daryl Heller’s operations. Lavish spending, high-stakes gambles, and questionable ventures emerge, painting a stark contrast to the struggles of those he left behind. How could the mastermind of such an elaborate operation juggle a crumbling empire while indulging in a life of excess? And what does this reveal about the deeper motives behind one of Lancaster County’s most shocking financial betrayals? Stay tuned as we delve into the unraveling of Heller’s empire and the growing calls for accountability.
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)