NEW YORK
A federal judge sentenced a Long Island, New York sales representative to prison for fraudulently selling vending machine businesses, the Department of Justice announced Thurday.
Richard R. Goldberg, 44, of Holbrook, New York, was sentenced to three years in prison and ordered to pay $546,487 as restitution.Goldberg was found guilty after a six-week trial in 2015 of wire fraud and conspiracy. He is one of 24 defendants who
Goldberg was found guilty after a six-week trial in 2015 of wire fraud and conspiracy.
Goldberg was found guilty after a six-week trial in 2015 of wire fraud and conspiracy. He is one of 24 defendants who have been convicted of fraud in connection with Multivend LLC d/b/a/ Vendstar, which was based in Deer Park, New York.
“The defendant enticed people to pay $10,000 or more for a business that he promised would be prosperous, when he knew it was likely to fail,” said Acting Assistant Attorney General Chad A. Readler, head of the Justice Department’s Civil Division. “That is a serious and reprehensible crime. The Department of Justice is committed to protecting consumers by prosecuting such frauds.”
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, officials indicated.
The evidence at trial indicated the following:
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.
Vendstar advertised nationwide in newspapers and on the Internet.
Vendstar sales representatives promised to provide consumers with everything they needed to make the business work.
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.