Several years ago, Pavan Kumar Appannagari, a 45-year-old software engineer from Jersey City, New Jersey, was looking to invest.
He said he was looking for something that would generate a steady monthly income for his daughter’s future and to help fund his retirement.
In his research, Appannagari came across webinars and podcasts by Dave Zook, who billed himself as the “Real Asset Investor.”
The opportunity: Investing in ATMs.
Zook, of Atglen, was a fund manager for Prestige Investment Group, which raised money from investors and sent the money to Lancaster businessman Daryl Heller’s Paramount Management Group to purchase and operate ATMs, with investors paid from fees generated by the machines.
Appannagari now believes he’s the victim of a $700 million Ponzi scheme orchestrated by Heller and his associates, including Zook.
A Ponzi scheme is a financial fraud that relies on new investors to pay off earlier ones, and which collapses when the payouts are greater than the money coming in.
Appannagari is a plaintiff in a new class-action suit naming Zook and three other Heller associates: Jerry Hostetter, Mir Jafer Ali “Buck” Joffrey and Randall Leaman. The suit was filed Wednesday in U.S. District Court for the Eastern District of Pennsylvania on behalf of 2,700 investors.
“I’m the only earner in my family. This wasn’t just play money,” Appannagari said. “This was my (daughter’s) future… The financial stress is now forcing me to sell my home. The emotional toll has been even harder.”
The stress caused a medical crisis for his wife, who is still recovering, he said, “so the human cost is devastating.”
Appannagari made his first investment with Prestige in June 2023 and invested more in November 2023. In total, he invested $208,000. He said he never saw a cent of profit.
Zook’s offers “had a very, very credible pitch … it definitely did not sound like a get-rich-quick scheme. It sounded like a boring, monthly income kind of investment with some tax advantages,” Appannagari said Friday.
“People thought they were investing in tangible things — 38,000 ATMs that turned into less than 10,000,” attorney Jason Kane, a partner at New Orleans-based Peiffer Wolf Carr Kane Conway & Wise, said Friday. The firm is one of several representing the plaintiffs. “These victims are salt-of-the-earth people, who like Pavan, have lost their life savings.”
Filings in court cases involving Heller’s Paramount the Prestige funds owned by Zook and others say Heller misrepresented the number of ATMs in his network and assigned groups of ATMs to multiple owners. Testimony provided by former Paramount employees and reports by a bankruptcy examiner say Paramount never fully owned more than 8,000 ATMs, though it had some rights to fees generated by another 12,000 machines.
Heller’s lawyers have said the ATM business was operated legally, and Heller has alleged that the Prestige investors – Zook, Hostetter and Joffrey – took more money out of the funds than they were entitled to
Zook did not immediately return a message seeking comment Friday.
