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U.S. Securities and Exchange Commission

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 23095 / September 29, 2014

Securities and Exchange Commission v. Michael B. Ferguson and Transactions Unlimited, Civil Action No. 3:14-cv-04188 (N.D. Cal.)

The Securities and Exchange Commission today charged a Foster City, Calif., businessman and his company with bilking more than $12 million from investors in a fraudulent automated teller machine (ATM) scheme that unraveled late last year.

The SEC complaint filed in U.S. District Court in San Francisco charges Michael B. Ferguson and Transactions Unlimited, which did business as ATM Plus. The complaint alleges that the ATM scheme dates from at least 2005 and continued until Ferguson stopped paying investors in late 2013. Ferguson allegedly told investors that ATM Plus owned or operated ATMs located at malls around the U.S. and had lucrative agreements to brand ATMs for several major ATM distributors. Although Ferguson and ATM Plus paid investors millions in purported profits from their business, the vast majority of the funds was new investor money, the hallmark of a Ponzi scheme.

According to the SEC's complaint, Ferguson paid investors far more than he was earning from his ATM and branding businesses, and when the earnings dried up in 2011, he continued to raise funds from investors and pay them purported profits up until late 2013. The SEC complaint alleges that Ferguson went to great lengths to keep the scheme going, including fabricating ATM transaction data in investors' account statements and sending a forged contract to an investor purporting to show purchases of several ATM machines. The scheme raised at least $12 million from at least 160 investors, many of whom were from the San Francisco Bay Area, and Ferguson pocketed almost $1 million from it.

In March 2014, the Santa Clara County District Attorney's Office arrested Ferguson and charged him with securities fraud, burglary, and grand theft in connection with his ATM business. He was recently released pending trial.

The SEC's complaint charges ATM Plus and Ferguson with violating U.S. laws on securities registration and antifraud provisions of U.S. laws and SEC rules, and seeks permanent injunctions, return of allegedly ill-gotten gains, and civil penalties.

The SEC's investigation was conducted by Robert J. Durham and Erin E. Schneider. The SEC's litigation will be led by Sheila E. O'Callaghan and Mr. Durham. The SEC appreciates the assistance of the Santa Clara County District Attorney's Office.

 

http://www.sec.gov/litigation/litreleases/2014/lr23095.htm


Modified: 09/29/2014