Banks That Financed The Prestige Funds Scam
If you invested in the Prestige Funds and are now facing collection efforts from your bank, you may be more than just a victim of a Ponzi scheme—you may have a legal claim against the financial institutions that financed it.
Our firm is currently investigating the role of banks in the Prestige Funds Ponzi scheme. We believe that investors who were steered into these “leveraged” investments may have grounds to fight back against bank demands for repayment.
The Scheme: A “Business” Built on Ghosts
The Prestige Funds, alongside Paramount Management Group, sold private-placement investments in the ATM industry. They promised investors:
- Fixed monthly payments (often representing a 24% annual return).
- Significant tax benefits via ATM depreciation.
- Direct ownership of the ATM machines.
The reality was far darker. Recent evidence and employee admissions suggest that while the Prestige Funds claimed to operate over 38,000 ATMs, they actually owned as few as 8,000—most of which generated little to no revenue. Investor funds were not being used to grow a business; they were allegedly being used to pay back earlier investors or were misappropriated for personal gain.
The Bank’s Role: Financing the Fraud
Our investigation focuses on the “ATM loan programs” designed by banks specifically to facilitate these investments. In some cases, a bank acted as the financing arm for the scheme.
We are pursuing the theory that banks may be liable to investors for:
- Failure of Due Diligence: Banks are required by the Bank Secrecy Act (BSA) and OCC Safety and Soundness Standards to verify collateral. If banks had verified the existence of the ATMs, the scheme might have been uncovered years ago.
- Fraudulent Security Interests: Some banks claimed to hold “Purchase Money Security Interests” (PMSI) in the ATMs. However, legally, a PMSI typically requires the debtor to actually possess the collateral. Since the ATMs were part of a passive investment managed by Prestige, these security interests may have been invalid.
- Knowledge of Red Flags: In some instances, bank officers were allegedly involved in multiple similar schemes simultaneously, including Water Station Technology and CETA.
The “Double Victimization” of Investors
When the Prestige Funds collapsed in early 2024, the banks stopped receiving payments from the scheme. Rather than acknowledging their own lack of oversight, some banks have begun mass-filing collection actions against the very investors they helped recruit into the scam.
We Want to Hear From You
If you took out a loan to invest in the Prestige Funds or Paramount, you should not have to face the bank alone. We are investigating claims that banks may have violated the Washington State Securities Act and the Consumer Protection Act by selling these intertwined loan and investment products.
Contact us today if:
- You invested in the Prestige Funds or Paramount Management Group.
- A bank provided you with a “specialty” loan to fund that investment.
- You are now being asked to pay back a loan for ATMs that may never have existed.