Before the FBI raid, the lawsuits, layoffs and missing millions, three Lancaster County friends with long experience in private businesses set up Prestige Investment Group. They used Prestige to raise more than $700 million from 2,700 investors to finance automatic-teller machines on the Pennsylvania and Massachusetts Turnpikes and in thousands of other locations.
Those ATMs, run by Lancaster-based Paramount Management LLC, were a popular investment among the county’s Amish and Mennonite farmers and business owners, as well as Lancaster County’s country-club set and their out-of-state contacts, from 2012 until Paramount’s financial collapse last year.
The trio, whose formal educations concluded in 12th grade at Lancaster Mennonite School, had deep and personal ties to key Lancaster County constituencies, whose faith has now been profoundly tested:
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Daryl Fred Heller, son and grandson of Mennonite pastors, parlayed profits from a telecom business he cofounded at the end of the 1990s into a hometown investment firm, Heller Capital Group. He attracted investors to a constellation of his businesses — Bitcoin machines, hunting suppliers, the biggest cannabis grower in Michigan, an upscale restaurant and market in his hometown of Lititz — and to Paramount, the ATM group, which he also founded.
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David Zook, whose family runs a string of Amish woodworking enterprises, set up The Real Asset Investor, an office promoting “high yield cash flow investments” in a car-wash chain, self-storage sites, energy exploration, real estate and tax shelters, as well as Paramount ATMs. He drew investors from local networks and via podcasts, radio programs, hotel-hall meetings and social-media postings, some depicting him with local and national officials like President Donald Trump. Zook is also co-author of Building Chicken Coops for Dummies.
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Jerry Delmar Hostetter, after building and selling a 400-employee hog-management business, became a prominent figure in Lancaster. He served as president of the Lancaster Country Club, a fundraiser for the hospital in Ephrata, and a bank board member advising aspiring Lancaster-area business founders and helping recruit investors for Heller’s Paramount ATMs and other local enterprises.
Paramount was among the most visible stars in Heller’s constellation of businesses. Heller founded Paramount and oversaw its staff of payments professionals. Zook, Hostetter and their business associates were some of its leading pitchmen, promoting the funds and convincing others to invest.
Heller, with his “people of faith” and community background, became “a real icon in Lancaster County,” Zook said in an interview. But after Paramount stopped paying investors last spring, Zook said he began to feel “betrayed.”
“We all lost a ton of money,” he said, and he wonders where it went. “It’s ugly. The authorities could step in any day.”
Last year, Hostetter, Zook and other former Heller associates sued for the missing money. Heller gave up control of the ATM company. Hostetter and Zook demanded records. In a December hearing, ATM experts testified that Heller’s list of ATMs didn’t match the company’s much shorter list of working ATMs.
In January Judge Leonard G. Brown III found the ATM company in contempt of court. But Brown declined the former partners’ demand that the court find Heller personally liable for an estimated $593 million in investors’ losses. He noted that they had earlier agreed to accept a fraction of that sum: $138 million.
Attempts to collect any money have been stalled by Heller’s Feb. 11 bankruptcy filing in New Jersey, where he owns a Shore house. One lender accused him of hiding assets from creditors and the IRS. In his filing, Heller listed the value of his private investments at $220 million and his debts at $148.6 million, mostly to lenders to his businesses.
According to the filing, Heller owes at least $52 million to Needham Bank in Massachusetts, $23 million to Silverview Credit Partners in Florida, $22 million to Chicago Atlantic, $5 million to the IRS, and millions more to other private-credit lenders and central Pennsylvania banks.
The ATM investors, not listed as creditors, are waiting to see whether the FBI and SEC officials who have been scouring company records will recommend civil or criminal charges — and wondering if and how they might get their money back.
Heller in a statement said he has been limited in his response to accusations while federal investigators are reviewing the case. He said his former partners have mischaracterized his actions, and he denied “deceitfully diverting” funds to his own troubled investments. He said he looks forward to telling what happened when it’s the right time.
How the investment was supposed to work
Promotional materials for the ATMs, circulated by Zook and others, invited prospective clients to invest in $104,000 increments. The money was put into dozens of Prestige funds that financed the purchase of ATMs run by Paramount and drew income from ATM fees. Some investors borrowed money from local banks to fund their investments.
The promoters said a $104,000 investment would yield payouts of $2,125 a month for seven years for a total of $178,500 — a return of more than 8% a year, far above what banks were paying insured depositors. Investors could make far more, they added in the brochures, by writing down the value of the investments for tax purposes as the ATMs aged.
The money was to come largely from ATM fees. For Paramount’s Pennsylvania Turnpike ATMs, the company charged $3.50 per use; $2 went to the Turnpike Commission, and the rest was split between the expenses of running the ATM network and investor returns, so long as the terminals were busy enough to cover costs as well as returns.
The partners assured investors that the business had good prospects, due to the growing number of people who couldn’t afford smartphones or traditional banking services and relied on ATMs, plus the potential new uses of ATMs for cryptocurrencies and foreign payments.
The sales materials did not stress other realities in the ATM business: the decline in ATM use and in demand for ATMs; a drop in the need for cash as toll roads, laundromats and casinos switched to digital payments, and the 2022-24 jump in Federal Reserve and bank interest rates, which made financing ATMs more expensive.
Paramount unraveled last spring when the company missed its monthly payments to investors. In notes to investors and documented in court records, Heller first said payments would resume on a quarterly basis, then missed a series of his own deadlines. As investors began doubting they would get paid, anonymous complaints accumulated on online bulletin boards, including a Reddit thread that attracted hundreds of posts.
In August, lawyers for Hostetter, Zook and other managers of funds that had invested in the ATMs sued Heller and his company, demanding the overdue payments.
Last fall, Judge Brown ordered Paramount to repay investors $138 million for payments due since the April default. When the company didn’t pay, Heller as its majority owner agreed to transfer managing control to his minority partners and fellow managers, led by Hostetter and Zook.
The court also ordered Heller to supply financial records and confirm the whereabouts of thousands of ATMs that had been purchased with investors’ money, including some Heller had arranged to sell to other ATM networks.
In a hearing on the former partners’ lawsuit in December, ATM experts testified Heller’s lists didn’t match the company’s much smaller verifiable inventory. Paramount’s suppliers had already removed cash from many of its remaining machines. That month, Paramount laid off all its staff, effectively ending the business — though Heller said later in a statement that he still hoped to revive Paramount.
Paramount, like other independent ATM networks, had a bank that sponsored its use of the Visa and MasterCard payment networks. The company used MetaBank, an Iowa-based company now known as Pathward Financial Inc. since selling its name to Facebook in 2022, according to Jorge Fernandez, a Paramount official from 2017 to 2022.
Operators like Paramount typically “have to go through background checks on the principals and provide audited financial statements,” Fernandez said. But Paramount was different, he added: “I never saw an audited financial statement while I was there.”
“I had 100 questions,” Fernandez said. “But there are things Daryl did not share.”
Fernandez said some potential investors wisely refused to put money into the ATMs without audited statements. “I put money into it based on the community and the people. My mistake.”
Zook says the sponsoring bank assured him it was “doing regular audits.” Pathward officials didn’t respond to calls seeking comment.
In written statements this winter, Heller has denied wrongdoing and disputed accusations by his former partners, who he notes collected “tens of millions” from the company while it was paying on time.
“It is no secret that I am the subject of an ongoing federal investigation,” Heller wrote in a public statement Jan. 22.
Heller’s former partners in the ATM funds now say they were fooled along with their clients. “Me and my family, we’re some of the biggest victims in this case,” Zook said.
That’s why Zook joined with Hostetter to “wrest control of the network out from Heller at great financial expense,” paying for lawyers to sue their former partner, he said. “And we got the judgment for investors. Who knows if we can collect on it? For all of us, banks, financial institutions, promoters,” as well as the more than 2,700 individual investors, “it’s an embarrassment.”
Zook said he first invested in Heller’s ATMs in 2012 and started promoting Paramount to others only after several years in which the company made steady monthly payments with interest.
The impact of Paramount’s default has stalled Zook’s other investment efforts, he said. “We are focused on the ATM business and trying to figure out how to get money back for investors; we are not aggressively raising cash for other projects. It’s ugly, and it’s not what it was portrayed to us.”
Heller’s problems beyond the ATMs
Other parts of Heller’s business empire have been unraveling, too.
In early February, a court in Michigan took control of Heller’s marijuana business, including the state’s largest cannabis-growing operation, and gave it to a receiver after a bank complained the company had defaulted on a $51 million loan personally guaranteed by Heller.
Eric Warfel, a long-time Lancaster County banker, alleged in a lawsuit, first filed last year and later updated, that Heller sold his Cessna jet, shooting-supply business and a Lancaster City home, and filed for bankruptcy protection in New Jersey, where he owns a house in Sea Isle City, even as he failed to pay $9.5 million in loans and interest owed to Warfel’s Deerfield Capital, which financed Paramount in its last months.
The Lititz market, developed by Heller, shut down in early 2024 “for renovation,” according to a sign on the property, but remains closed a year later.
While business partners and other creditors are pursuing Heller, the Paramount collapse has affected the largest number of investors.
“The Amish and Mennonite communities in Lancaster are heavily invested in this. It’s the biggest group of multimillionaires you never heard of,” said attorney Matthew H. Haverstick, a Lancaster area native who filed suits against Paramount on behalf of Hostetter and Zook.
The Lancaster court is now managing at least a dozen lawsuits seeking repayments from Heller, his investment company, and his ATM company. Several were filed by banks and others by local business owners who invested in Heller’s ATMs.
One suit demanding repayment was filed by the estate of the late Lancaster outlet-mall developer Richard Welkowitz, who said Heller failed to pay $3 million he owed Welkowitz for ATMs. Welkowitz was also one of the largest debtors to Par Funding, a Philadelphia loan company declared a Ponzi scheme by a federal judge in Florida. According to the suit, Welkowitz asked for but did not receive detailed Paramount financial statements.
In the most recent lawsuit against Heller, filed Jan. 27 by Haverstick, Heller’s former partners and fellow investors accused him of “a wide-scale fraudulent scheme” against investors resulting in last year’s default.
The former partners allege in that lawsuit that many of the ATMs Heller claimed to have purchased with investors’ funds “never existed, were purchased but stayed in a warehouse, were sold to more than one entity.”
In public statements, Heller has accused his former partners of spreading “false and malicious” claims after collecting “tens of millions” from the same investments over the years.
Heller called his former partners’ claim that Paramount had bought 38,000 ATMs but could account for less than 10% of that total “misleading,” denied “deceitfully diverting” company cash to his own investment company, and blamed his former partners’ litigation for driving business away from Paramount.
“I will have the opportunity to defend myself against the federal investigations and in time, [his former colleagues‘] allegations,” he said, “and I look forward to the opportunity.”
Chris Felix, an early investor in the ATMs, said, “It’s turning into a circular firing squad. Dave is saying he didn’t know about the actual condition of Paramount under Heller’s management. And then you’ve got Heller saying it’s a misunderstanding.”
Eaton Hopkins, a later investor, said: “It’s a trail of pain and loss that will take a long time to fully understand. I personally know a lot of people that lost a lot of money on this scheme — money they didn’t have to lose.”
