(Anchorage, AK) – Wednesday, Alaska Attorney General Treg Taylor filed a lawsuit against James Francis Dainis and six companies owned by Dainis (264KB PDF), alleging that they engaged in widespread fraud in the ATM industry.

According to the complaint, Dainis sells ATMs to small business, non-profits, and ANCSA corporations, and provides related services, including connecting the machines into the financial system. In many cases, Dainis’ ATM-owner clients fill their machines with cash. In return, the ATM-owner should receive a transfer of funds equal to the amount withdrawn (a “cash settlement”), plus the ATM-owner’s share of any surcharges that ATM users pay when they withdraw money (a “surcharge settlement”). But since at least 2013, Dainis has repeatedly stolen both cash settlements and surcharge settlements.

The complaint states that a full accounting of Dainis’ fraudulent scheme is not complete, but that some victims suffered tens or hundreds of thousands of dollars in losses, and that Dainis likely stole millions dollars of cash and surcharge settlements from his ATM-owner clients.

According to the complaint, since 2017, at least fourteen of Dainis’ ATM-owner clients have filed suit against him.

“This sad case highlights the incredible amount of damage that an unscrupulous person in the financial industry can cause,” said Attorney General Treg Taylor. “The Department of Law is committed to bringing bad actors to justice, but we also encourage small businesses to be careful who they do business with, and to regularly audit their financials.”

The Department of Law is asking any ATM owners who believe they may have been defrauded by Dainis to send an email to consumerprotection@alaska.gov or to call (907) 269-5200.

In addition to defrauding his ATM-owner clients, Dainis is also alleged to have defrauded four companies that he sold business interests to. In one instance described in the complaint, Dainis sold his supposedly exclusive contractual right to provide processing services for 307 ATM terminals owned by his ATM-owner clients to Know-Tone Incorporated for $1,080,000. But Dainis did not have any such contractual rights, and in any event, he refused to transition his business to Know-Tone.

The complaint goes on to say that after defrauding Know-Tone, Dainis entered into contracts with three separate companies promising to provide a percentage of his future revenue in exchange for immediate cash. The contracts with EBF Partners, LLC, Fox Capital Group, LLC, and Pearl Delta Funding, LLC (“the receivables financing companies”) provided Dainis with over $1 million in cash. But after a short time Dainis stopped allowing the receivables financing companies access to his revenues.

The complaint states that more than $1 million in court judgments against Dainis remain unpaid, and that Dainis is still facing several lawsuits and potential future lawsuits. According to the complaint, in order to hide assets from creditors, Dainis created two shell companies, LGD Enterprises, LLC (a Wyoming corporation) and LGD Enterprises LLC (a Washington corporation), which he used to purchase real estate. The complaint also alleges that Dainis has moved money out of the United States.

Dainis has created numerous corporations, obtained numerous business licenses, and registered numerous business names, including:

Alaska

• Societe Financial LLC – 99577 (Previously “Sociate Financial Group Limited Liability Company”), which obtained the following licenses and name registrations:
  • Societe Financial LLC – 733635 (Business License)
  • Alaska ATM Service – 909561 (Business License)
  • Cajeros Automaticos de Mexico – 1063576 (Business License)
  • Cajeros Automaticos de Mexico – 995269 (Business License)
  • Commercial ATM Services – 984179 (Business License)
  • Northwest ATM Services – 937535 (Business License)
  • Outpost ATM Services – 1063577 (Business License)
  • Alaska ATM – 117956 (Business Name Registration)
  • Alaska ATM Sales – 121129 (Business Name Registration)
  • Alaska ATM Sales and Service – 121130 (Business Name Registration)
  • Alaska ATM Service – 103462 (Business Name Registration)
  • Alaska ATM Service – 10018067 (Business Name Registration)
  • Alaska ATM Service – 10122712 (Name Reservation)
  • Alaska ATM Service – 10199405 (Business Name Registration)
  • Alaska Teller Machine – 99578 (Business Name Registration)
  • ATM Network – 133079 (Business Name Registration)
  • Outpost ATM – 117957 (Business Name Registration)
  • Outpost ATM Service – 118094 (Business Name Registration)
  • Outpost ATM Services – 117955 (Business Name Registration)
• Societe Financial Group LLC – 10018053, which obtained the following licenses:
  • Societe Financial Group LLC – 999879 (Business License)
  • Outpost ATM Services – 999935 (Business License)
• Commercial ATM Services, LLC – 10018066, which obtained the following licenses:
  • Commercial ATM Services, LLC – 999900 (Business License)
  • Commercial ATM Services LLC – 1006409 (Business License)
  • Commercial ATM Services LLC – 2084860 (Business License)
  • Advanced ATM Systems – 2098254 (Business License)
  • Advanced ATM Systems – 1006410 (Business License)
• Commercial ATM Services of Alaska LLC – 10025928, which obtained the following license:
  • Commercial ATM Services of Alaska LLC – 1014586 (Business License)

Oregon

• Commercial ATM Services, LLC – 1617127-90, which obtained the following license:
  • Northwest ATM – 774100-91 (Business License)

Washington

• Commercial ATM Services LLC – 604-781-788
• Northwest Bank Equipment LLC – 604-938-311
• Northwest Bank Equipment, LLC – 604-694-214
• LGD Enterprises LLC – 604-941-231

Wyoming

• LGD Enterprises, LLC – 2019-000866632

Arizona

• Societe Financial LLC – R19152037 (Foreign LLC Registration)
• Societe Financial Group LLC – R19279344 (Foreign LLC Registration)
• Commercial ATM Services, LLC – R19279388 (Foreign LLC Registration )

Mississippi

• Commercial ATM Services, LLC – 1179695 (Foreign LLC Registration)

Missouri

• Commercial ATM Services, LLC – 1179695 (Foreign LLC Registration )

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  Alaska, atm, dainis, fgraud, fraud, lawwsuit