Magazine article American Banker

'Scrip' ATM Outfit Shut Down

Magazine article American Banker

'Scrip' ATM Outfit Shut Down

Article excerpt

The Securities and Exchange Commission has shut down a company that raised $10 million while allegedly misleading investors about the placement of cashless, or "scrip," automated teller machines.

The SEC, which on July 20 filed a complaint against Cash Link Systems Inc. in U.S. District Court in Dallas, said the Miami company failed to deliver some machines, to put investor-owned ATMs in high-traffic locations "as represented," and to distribute returns to investors.

Scrip machines, which dispense receipts to be redeemed for cash at the register, are cheaper to own than normal ATMs and are used by small or rural merchants. Experts estimate there are 5,000 such machines in the United States.

The SEC's complaint said Cash Link claimed that investors who put up $11,685 for three scrip machines could expect a "conservative" return of $2,100 a month. According to the SEC, nearly 700 people invested in the company, which was formed in July 2003.

The agency also said that Cash Link and its president, Alan Levine, failed to disclose to investors that the company had been issued cease-and-desist orders in December 2003 by the South Dakota Division of Securities and the Texas State Securities Board in February 2004. Nor were investors told about a criminal investigation by the Postal Service, the SEC said.

Mr. Levine, 70, of South Florida, could not be reached for comment. His attorney, Barry Witlin of Barry E. Witlin PA in Plantation, Fla. …

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