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FOR IMMEDIATE RELEASE
Thursday, February 2, 2017

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 R. Goldberg, 44, of Holbrook, New York, was sentenced to serve 36 months in prison followed by three years of supervised release and ordered to pay $546,487.77 in restitution by U.S. District Court Judge Joan M. Azrack of the Eastern District of New York. 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.”

 

Vendstar sold vending machine businesses in which it promised to provide vending machines, candy, locations, and everything else buyers would need to succeed. The company closed in July 2010. advertised in newspapers and on the Internet and sold the businesses to victims nationwide. But ’s sales representatives – with the knowledge and approval of Vendstar’s managers – misrepresented the business opportunity’s likely profits, the amount of money that ’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. Vendstar referred customers to locating companies that did not find profitable locations and regularly changed their names to stay ahead of constant complaints. During the last five years it was open, made more than $60 million in sales. Buyers received the vending machines, but little else, and most of them lost most or all of their investment.

 

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.

 

For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at http://www.justice.gov/civil/consumer-protection-branch.

 

17-145
Topic: 
Consumer Protection
Updated March 17, 2017