A former Houstonian is headed to prison for running an $80 million Ponzi scheme that involved selling stakes in non-existent ATMs. Part of his downfall: An investor apparently so impressed he owned an ATM that he went to see it in person.
The investor found he'd been scammed; a check of the records show a lot of Houstonians could probably have warned him beforehand.
Walter Netschi was convicted of fraud in federal court last week. Prosecutors said the 63-year-old McKinney resident and his partner, Vance Moore II, got people to invest in about 4,000 ATMs that didn't actually exist. Netschi faces up to 200 years in prison.
Before his graduation to the big time, Netschi lived in Houston and was involved in a series of dubious business ventures and civil suits filed in Harris County. We like to think he got his start here!
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In 1984, Greenway Bank & Trust sued a company called Career Sports; Netschi was ostensibly the backer who would help the company obtain a line of credit from the bank. In trying to recover a $130,000 loan, the bank's lawyers deposed Netschi, who said he invested in real estate, oil and gas, and "syndications, partnership-type situations." (Career Sports, which appears to have been as legitimate as the phantom ATMs, appears to have been a firm that managed pro athletes and, for some reason, help them find reputable CPA's for all their tax needs. One of the defendants in the case, a supposed investor in Career Sports, was Curtis Dickey, then an NFL running back with the Colts). The case was removed to federal court in 1989.
In 1987, a Wisconsin insurance company sued Netschi for defaulting on a $3,121 payment. However, in 1988, Netschi was ordered to pay the company $46,000.
But Netschi's first suit in Harris County dates to 1979, when he was accused of not paying for office space he leased in a bank building. The parties entered into an agreed order where Netschi would pay $2,3684.
There is one other civil suit listed, but unfortunately the file appears to have been purged. Netschi eventually moved to McKinney. We were just happy to discover that a guy facing 200 years behind bars for his role in a nationwide scam may have learned the tricks of the trade in our own backyard.