Six convicted on business opportunity fraud charges - WDAM-TV 7-News, Weather, Sports-Hattiesburg, MS

Six convicted on business opportunity fraud charges

WASHINGTON, D.C. (WDAM) -

This is a news release from the U.S. Department of Justice.

A jury in Central Islip, New York, convicted six men yesterday on felony charges of conspiracy and fraud in the sale of candy vending machine business opportunities, the Department of Justice announced. 

Edward Morris “Ned” Weaver, 42, of Perrysburg, Ohio, and Lawrence A. Kaplan, 57, of Brooklyn, New York, were convicted of conspiracy, six counts of fraud and one count each of making false statements to federal agents during a related criminal investigation.  Scott M. Doumas, 43, of East Setauket, New York, was convicted of one count of conspiracy and one count of mail fraud.  Richard R. Goldberg, 43, of Bay Shore, New York, and Richard Linick, 73, of Coram, New York, were each convicted of conspiracy and one count of wire fraud.  Paul E. Raia, 64, of Brookhaven, New York, was convicted of conspiracy and two counts of wire fraud.

The convictions followed a six-week trial before U.S. District Court Judge Joan M. Azrack in federal court in the Eastern District of New York.  Each of the defendants faces a statutory maximum sentence of 10 years in prison on the conspiracy count and 25 years in prison on the fraud counts.  Weaver and Kaplan face a statutory maximum sentence of five years in prison on the false statements charges.

“These defendants promised their victims the American dream, but knew that what they in fact were offering was a worthless business opportunity,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “The Department of Justice will continue to prosecute those who seek to scam out of everyday Americans the hard-earned money in their retirement accounts and life savings.”

According to evidence presented at trial, managers, sales representatives and operators of “locating companies” associated with Multivend LLC, d/b/a Vendstar, made material misrepresentations about the profits customers would make from bulk candy vending machines. During the telemarketing calls, Vendstar’s sales representatives falsely claimed to operate their own profitable vending machine businesses.

Additional evidence at trial described how Vendstar advertised nationwide in newspapers and on the Internet.  Vendstar sales representatives promised to provide consumers with everything they needed to operate a successful business, including vending machines, an initial supply of candy, assistance in finding locations for the vending machines, training and ongoing customer assistance.  The locating companies who worked with Vendstar to close deals had no special skills, tools or expertise in finding locations and 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.  The vending machines generated little business and Vendstar’s customers lost all or nearly all of their investments.  The typical customer paid about $10,000 for the business opportunity.

Prior to this trial, 16 other Vendstar managers, Vendstar sales representatives and locating company operators pleaded guilty to federal felony charges for related conduct at Vendstar.  Evidence presented at trial established that from 1995 to 2010, the Vendstar scheme cost consumers $60 million.

Principal Deputy Assistant Attorney General Mizer commended the U.S. Postal Inspection Service for their investigative efforts.  The case was prosecuted by Trial Attorneys Patrick Jasperse and Alan Phelps of the Civil Division’s Consumer Protection Branch.

Copyright 2015 WDAM. All rights reserved.

  • Local NewsLOCALMore>>

  • NOAA predicts near- or above-normal 2018 Atlantic hurricane season

    NOAA predicts near- or above-normal 2018 Atlantic hurricane season

    Thursday, May 24 2018 12:03 PM EDT2018-05-24 16:03:47 GMT

    The organization predicted 10 to 16 tropical systems, with five to nine becoming hurricanes. One to four of those hurricanes is predicted to develop into major hurricanes of Category 3 strength or above. 

    More >>

    The organization predicted 10 to 16 tropical systems, with five to nine becoming hurricanes. One to four of those hurricanes is predicted to develop into major hurricanes of Category 3 strength or above. 

    More >>
  • Hattiesburg theater group performs in New York

    Hattiesburg theater group performs in New York

    Thursday, May 24 2018 11:10 AM EDT2018-05-24 15:10:38 GMT
    The cast of "Selma The Musical: The Untold Stories" performed a song for Mississippi native Robin Roberts on the Good Morning America after show Monday and will appear on a live segment of the show on Thursday. (Photo source: Jana Paige Haynes)The cast of "Selma The Musical: The Untold Stories" performed a song for Mississippi native Robin Roberts on the Good Morning America after show Monday and will appear on a live segment of the show on Thursday. (Photo source: Jana Paige Haynes)

    A Hattiesburg theater group is in New York this week to perform their independent musical at the National Black Theater.  The cast of "Selma The Musical: The Untold Stories" performed a song for Mississippi native Robin Roberts on the Good Morning America after show Monday and will appear on a segment of the show on Thursday.  Robin Roberts Writer, producer and director Jana Paige Haynes said the experience in New York has been amaz...

    More >>

    A Hattiesburg theater group is in New York this week to perform their independent musical at the National Black Theater.  The cast of "Selma The Musical: The Untold Stories" performed a song for Mississippi native Robin Roberts on the Good Morning America after show Monday and will appear on a segment of the show on Thursday.  Robin Roberts Writer, producer and director Jana Paige Haynes said the experience in New York has been amaz...

    More >>
  • FDA warns teething medicines unsafe, wants them off shelves

    FDA warns teething medicines unsafe, wants them off shelves

    Wednesday, May 23 2018 9:43 AM EDT2018-05-23 13:43:09 GMT
    Thursday, May 24 2018 10:24 AM EDT2018-05-24 14:24:21 GMT
    The Food and Drug Administration said that various gels and creams containing the drug benzocaine can cause rare but deadly side effects in children, especially those 2 years and younger. (Source: FDA)The Food and Drug Administration said that various gels and creams containing the drug benzocaine can cause rare but deadly side effects in children, especially those 2 years and younger. (Source: FDA)

    The US Food and Drug Administration health is warning parents about the risks of teething remedies.

    More >>

    The US Food and Drug Administration health is warning parents about the risks of teething remedies.

    More >>
Powered by Frankly