FBI agents aided by local police arrested private-equity investor Daryl Heller outside his Lancaster County home Wednesday, and U.S. Attorney David Metcalf unsealed an indictment charging the onetime automatic-teller machine promoter with one count of securities fraud and four counts of wire fraud.
If convicted, he could face years in federal prison.
Heller raised $770 million from 2,700 investors, concentrated in Lancaster County but also across the United States, in an “investment fraud scheme,” Metcalf said at a news conference announcing the indictment in Philadelphia.
Heller’s Paramount Management ATM company, through a network of Prestige Investment-branded funds promoted to the public by a network of salespeople, promised investors years of steady payouts, Metcalf said. But the funds defaulted in 2024 when Heller could not find enough investors to keep the scheme going, according to the indictment.
Investigators estimate losses at a net $402 million. Metcalf said the government has found some assets that might be used to reimburse investors but declined to estimate how much they might receive per dollar lost.
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SEC files a civil fraud complaint
Also Wednesday, the federal Securities and Exchange Commission, which has been investigating Heller and collecting complaints from investors for more than a year, filed a civil fraud complaint against Heller and his companies in Philadelphia federal court.
The SEC accused Heller of perpetrating a “Ponzi-like scheme,” promising 25% annual returns supposedly derived from a “successful, nationwide network of ATMs” but actually misrepresenting the size of that network, hiding large losses, and using only “a fraction” of investors’ money to buy working ATMs, while taking $185 million for his own use and paying tens of millions more to salespeople. The SEC wants Heller to repay investors and stop breaking the law.
Federal prosecutors say Heller lied to investors about how many ATMs he had purchased with their money and about the revenues Paramount derived from ATMs. His clients included the Pennsylvania and Massachusetts Turnpike toll roads, along with local grocers and other small retailers.
“Heller piled lie up on lie. He earned their trust to take their hard-earned money. But it was all a scam,” said Metcalf, alleging that Heller diverted much of the money investors thought they were pouring into ATMs to support his lifestyle.
He said Heller also used investors’ funds to pay debts for other enterprises and pay off earlier investors. Company records were “fraudulent” and “grossly misrepresent the number of ATMs” the company bought and the revenues they produced.
Heller plowed money into a restaurant and market in his native Lititz, the largest marijuana business in Michigan, and firearms businesses, among other projects, according to state court records in civil complaints filed against Heller by former business partners over the last two years and Heller’s own personal bankruptcy case.
ATMs were promoted as a good investment
Through a network of sales agents, Heller promoted ATMs as a growing business in the late 2010s and early 2020s, despite the fact fewer Americans needed cash and the ATM industry was slowing precipitously.
ATMs Heller purchased often piled up in storage, unused, according to prosecutors.
“New money was used to pay old investors,” Metcalf said, a classic tactic in illegal Ponzi schemes, though, unlike the SEC, federal prosecutors did not use that term in filing charges.
Metcalf said the investigation is continuing.
A federal class-action lawsuit filed last week, Batman Investments LLC v. Hostetter et al, accuses three salesmen of violating Pennsylvania securities law by selling unregistered securities: Jerry Hostetter, a former pig farm management company owner active in Lancaster’s social and philanthropic circles; David Zook, of Parkesburg, Chester County, who heads his own private-equity investment group; and Buck Joffrey, a West Coast investment salesperson. Randall Leaman, a former Paramount CEO, was also accused of fraud in the suit.
Investors included around “50 to 100 Amish,” according to Jorge Fernandez, a former Paramount official. Other investors were affluent business owners with roots in Lancaster County’s Mennonite communities, some of whom knew Heller’s father and grandfather, both Mennonite pastors in the family’s hometown of Lititz. Heller, Zook, and Hostetter are graduates of Lancaster Mennonite High School.
Other investors included both locals and residents of faraway states who had viewed promotional videos posted by Zook and other sellers, according to investor accounts.
Zook and Hostetter sued Heller on behalf of the Prestige funds in Lancaster County Common Pleas Court and won a judgment, which they have been unable to collect.
But one of the investors’ lawyers, Scott Silver, said in an interview that Zook, Hostetter, Joffrey, and Leaman “made tremendous amounts of money” and were “insiders” who assisted Heller.
“They are his right-hand men,” said Jason Kane, another lawyer for the investors. “They were talking to the mom-and-pop investors we represent and causing them to lose their life savings.”
A lawyer representing Zook and Hostetter didn’t return calls. Zook did not return a call left at his office.
U.S. Attorney Metcalf said his office planned to increase its focus on white-collar crimes, each of which potentially “ruins the lives” of many victims.
Staff writer Brett Sholtis contributed to this article.
Source: The Philadelphia Inquirer September 3 2025
