Financial Advice

New York Salesman Sentenced to Prison for Fraudulently Selling Vending Machine Businesses

A federal judge sentenced a Long Island, New York sales representative to prison for fraudulently selling vending machine businesses, the Justice Department announced today. 

Richard Linick, 74, of Setauket, New York, was sentenced to serve 36 months in prison followed by three years of supervised release and ordered to pay $382,126 in restitution by U.S. District Court Judge Joan M. Azrack of the Eastern District of New York. Linick was found guilty after a six-week trial in 2015 of wire fraud and conspiracy. He is one of 22 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 victims to pay thousands of dollars for worthless business opportunities,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “The Department of Justice will continue to prosecute scam artists who defraud Americans out of their savings.”

Vendstar, which closed in July 2010, sold vending machine businesses in which it promised to provide vending machines, candy, locations, and everything else buyers would need.  Vendstar advertised in newspapers and on the Internet and sold the businesses to victims nationwide. But Vendstar’s sales representatives – with the knowledge and approval of Vendstar’s managers – misrepresented the business opportunity’s likely profits, the amount of money that Vendstar’s prior customers were earning, how quickly customers were likely to recover their investment, the quality of locations that were available for the vending machines, and the level of location assistance that customers would receive from locating companies recommended by Vendstar. During the last five years it was open, Vendstar made more than $60 million in sales. Buyers received the vending machines, but little else, and typically lost most or all of their investment.  Several of those victims testified at trial about the impact that the losses had on them and their families.

Acting Assistant Attorney General Readler commended the U.S. Postal Inspection Service for its thorough investigation. The case was prosecuted by Senior Litigation Counsel Patrick Jasperse and Assistant Director Alan Phelps of the Civil Division’s Consumer Protection Branch. During the last 10 years, approximately 170 individuals have been convicted of fraudulently selling business opportunities in cases prosecuted by the Consumer Protection Branch. 

This article by the Department of Justice was distributed by the Personal Finance Syndication Network.

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