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Tag: bizop fraud

  • 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.

  • Man Who Fled To Philippines After Bizop Scam Was Exposed By Postal Inspectors Sentenced To 125 Months In Federal Prison; Robert Nicol Bilked More Than $5 Million In Utah-Based Fraud Ventures

    A man who ran a Utah-based fraud scheme has been sentenced by a federal judge in Florida to 125 months behind bars.

    Robert Nicol initially fled to a remote section of the Philippines after the U.S. Postal Inspection Service executed a search warrant in an investigation of Gold Star Vending Inc. in 2007. But authorities tracked him down, and the Philippine government deported Nicol to the United States in 2010 to face justice, federal prosecutors said.

    “This defendant used his business opportunity scam to target those trying to make an honest living, and then fled to the Philippines when his fraud was discovered,” said Tony West, assistant Attorney General for the Civil Division of the U.S. Department of Justice. “As this stiff sentence demonstrates, we will see to it that fraudsters who cheat others to make a quick buck cannot escape justice.”

    In addition to sentencing Nicol to more than 10 years in prison, U.S. District Judge Patricia A. Seitz ordered him to pay more than $5.2 million in restitution to customers he scammed through Gold Star Vending and an entity known as Table Top Vending Inc.

    Customers believed they were buying everything they needed to run coin-operated games businesses successfully in places such as restaurants, but Nicol had lined up shills to sing the praises of the venture and purchasers lost millions of dollars, prosecutors said.

    “Fraudsters can run but they cannot hide,” said Henry Gutierrez, Miami’s U.S. Postal Inspector in charge. “Robert Nicol joins a growing number of business opportunity defendants the U.S. Postal Inspection Service, along with prosecutors, have brought to justice after being apprehended in other countries.”

    More than 100 bizop fraudsters in South Florida have been convicted and sentenced in recent years, noted U.S. Attorney Wifredo Ferrer, the Miami region’s top federal prosecutor.

    “Fraudulent telemarketers must realize that all financial fraud will be prosecuted vigorously,” Ferrer said.

    Utah also has been plagued by fraud schemes, perhaps especially investment-fraud and Ponzi schemes with a companion element of affinity fraud. The FBI said last year that various recent scams in the state had cost residents an estimated $1.4 billion and that the agency had identified at least 370 “potential perpetrators.”

    Two others implicated in Nicol’s Utah-based vending scam also were sentenced to hefty terms in federal prison.

    Seth Lehrenbaum, who provided shilling services for Nichol, received a sentence of 78 months. Meanwhile, Charles Nicol, Robert Nicol’s son and a pitchman for the scam, received a sentence of 41 months.

    In a separate case, the Salt Lake Tribune reported yesterday that Utah resident Wayne R. Ogden, who’d been charged, convicted,  jailed and paroled in a fraud scheme in the 1990s involving $7 million, now has been charged in an alleged $29 million caper.

  • Southern Florida’s Top Federal Prosecutor Says Offshore Biz-Op Fraudsters Have No Safe Havens; United States Throws Down Gauntlet To Criminal Hucksters

    A top federal prosecutor said today that the United States would vigorously investigate and prosecute “business opportunity” fraudsters who target Americans.

    “This is true even if they operate from outside of the United States,” said Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida.  “International law enforcement cooperation eliminates safe havens for those who cheat American citizens from overseas.”

    Ferrer’s remarks came in response to guilty pleas entered by Silvio Carrano and Gregory Britt Fleming after an intense investigation by the U.S. Postal Inspection Service.

    And Ferrer’s words were backed up by the head of the civil division of the U.S. Department of Justice.

    The United States “will continue to aggressively prosecute those who defraud Americans in an effort to make a quick buck,” said Assistant Attorney General Tony West.

    Carrano and Fleming were among a group of defendants who tricked customers into believing the “opportunities” they presented were based entirely in the United States. The businesses actually were operating from Costa Rica and were criminal scams that resulted in multiple prosecutions against multiple people peddling everything from vending machines and coffee to greeting cards and bogus claims of assistance, prosecutors said.

    Customers paid thousands of dollars each to join the programs based on profitability lies and tales of financial success told by the schemers. Shills helped sell the schemes, prosecutors said.

    Carrano and Fleming pleaded guilty to conspiracy to commit mail and wire fraud for their roles in the schemes, which operated for months, prosecutors said.

    “After one company closed, the next opened,” prosecutors said, identifying the businesses as Apex Management Group Inc., USA Beverages Inc., Twin Peaks Gourmet Coffee Inc., Cards-R-Us Inc., Premier Cards Inc., The Coffee Man Inc. and Nation West Distribution Co.

    Also recently pleading guilty to conspiracy to commit mail and wire fraud was Donald Williams, who was sentenced to 78 months in federal prison. Co-defendant Patrick Williams, meanwhile, pleaded guilty to conspiracy to commit mail and wire fraud, 10 counts of mail fraud and three counts of wire fraud.

    Sentencing for Patrick Williams is scheduled for March 30. Sentencing for Carrano and Fleming is scheduled for April 20.

    Read the statement by Ferrer, West  and Henry Gutierrez, the top postal inspector in Miami.