Prestige ATM
While Hilligoss currently has no disclosures in his CRD, it is alleged that he may have recommended private placements for Prestige Funds and Paramount Management Group to his customers. This placement eventually defrauded investors of as much as $400 million.
In December of 2024, the US Department of Justice charged Daryl F. Heller and two of his companies, Prestige Investment Group, LLC, and Paramount Management Group, LLC, with running and perpetuating a Ponzi scheme that saw them raise $220 million from 2,700 investors. Included were one count of securities fraud and four counts of wire fraud. In February of 2025, Heller filed for Chapter 11 Bankruptcy for the restructuring of the company.
The premise was that Heller and his company, Prestige, sold investments in funds that were allegedly invested in the operations of ATMs throughout the country that Paramount owned. Promising a 25% rate of return, the dividends were to be taken from the ATM transaction fees. In true Ponzi fashion, the “dividends” paid to current investors were simply money from newer investors and from high-interest, short-term loans from merchant cash advance companies.
While there was an ATM network, Heller misrepresented the number of ATMs in the network to investors while claiming a “safe” investment. With fewer ATMs than disclosed, the income was also much less than what they told investors. The company only purchased a small number of machines, most of which were old and inoperable, and left them sitting in a warehouse.
Heller misappropriated the funds in several ways, including:
- Purchased a beach house on the shore in New Jersey
- Finance other businesses
- Paid millions in commissions to fund managers who recruited new investors
The scheme operated from January 2017 through June 2024, when the number of new investors dropped and the company could no longer pay “dividends” to its current investors. The company first offered excuses and promises, but eventually told its investors that it would buy back their interests in the ATM funds. However, that never happened, and investors lost their money.
Other Allegations
In addition to recommending the Prestige ATM Ponzi scheme to clients, Hilligoss is alleged to have sold cryptocurrency investments to clients.
He also allegedly engaged in “selling away,” or recommending and selling firm clients securities and other investments not sold, vetted, or recommended by their broker-dealer. Selling away violates FINRA Rule 3270. In many cases, the broker has offered investments from their own broker-dealer firm or engaged in a “private placement” with a company in which they have a vested interest.
Did You Invest With Spencer Hilligoss?
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