10 Individuals, Including 6 Pitchmen, Indicted In Alleged ‘Vendstar’ Bizop Scam That Fleeced Customers $10,000 At A Time, Prosecutors Say

“Instead of becoming successful entrepreneurs, the individual investors become victims of fraud, often losing their life’s savings. In this way, business opportunity schemes tarnish the American Dream of success through hard work. We will help protect the investing public by prosecuting these cases aggressively.” —  U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida., Oct. 10, 2012

Ten alleged bizop fraudsters, including six pitchmen from New York, have been indicted in the Southern District of Florida in a scam involving vending machines that fleeced investors $10,000 at a time, the Justice Department said.

The case was brought after a probe by the U.S. Postal Inspection Service that reached into at least three states and involved a company known as Multivend LLC, which did business as Vendstar. A grand jury returned the indictment in Miami.

Scammers gained a head of steam through newspaper and Internet ads, prosecutors said, alleging that purported “locating companies” assisted Vendstar in the scam.

Despite the claim customers’ machines would be placed at quality locations, the scammers “generally placed consumers’ machines wherever they could as quickly as they could, often in businesses that had not consented to housing the machines and that soon demanded that the machines be removed,” prosecutors said.

“The U.S. Postal Inspection Service will continue to work with our partners in law enforcement to ensure that the U.S. Postal Service isn’t used as a conduit to defrauding the American consumer,” said Tony Gomez, acting inspector in charge of the U.S. Postal Inspection Service in Miami.

Here is the list of defendants:

• Edward Morris “Ned” Weaver, 39, of Perrysburg, Ohio, the president and chief executive officer of Vendstar.
• Lawrence A. Kaplan, 54, of Brooklyn, N.Y., the technical support manager for Vendstar.
• Scott M. Doumas, 40, of East Setauket, N.Y., a salesman and sales manager at Vendstar.
• Mark Benowitz, 65, of Holtsville, N.Y., a salesman at Vendstar.
• Richard R. Goldberg, 40, of Bay Shore, N.Y. a salesman at Vendstar.
• Richard Linick, 70, of Coram, N.Y., a salesman at Vendstar.
• Paul E. Raia, 61, of Brookhaven, N.Y., a salesman at Vendstar.
• Howard S. Strauss, 63, of Jericho, N.Y., a salesman at Vendstar.
• Wallace W. DiRenzo, 67, of Cleveland, Ohio, who operated Nationwide Locating Company, which was based in North Palm Beach, Fla.
• James P. Ellis, 42, of Northport, Ala., who operated Vending Dreams, Priority Placements, Clear Vision Marketing, Map Marketing and Secure Placement.

From a Justice Department statement (italics added):

Each of the defendants is charged with conspiracy to commit mail and wire fraud, and an enhanced penalty for telemarketing , which together provide for a maximum sentence of 10 years in prison. Weaver, Kaplan, Benowitz, Goldberg, Linick, Raia, Strauss and DiRenzo also are charged with mail fraud, and/or wire fraud, each of which carry a maximum of 20 years in prison.