8/26/2005
Always Beware Of Scams
A reader sent us this article from The South Florida Business Journal. There has been an ongoing crackdown on business opportunity fraud involving an alleged $19.2 million scheme involving DVD vending machines.
Operation Biz Opp Flop has led to eight arrests and one of those arrested couId face up to life in prison if convicted.
Officers and employees of American Entertainment Distributors (AED) used phony references to sell the $28,000 to $40,000 machines, the indictment states.
Consumers who called the company after seeing its TV commercial and Internet advertising were given exaggerated profit projections and were falsely told that the DVD vending machines were reliable, easy to operate, and would be delivered promptly, the indictment states.
Arrested and charged in the indictment unsealed on Aug. 12 were Russell G. MacArthur Jr., James R. MacArthur, Evan J. Feig, Edmond Grigorian, Thomas R. Kling, Cesar Menendez, and Michael H. Menkes, all of South Florida; and Karl Wagner of Michigan.
A task force composed of members of the U.S. Attorney's Office in Miami, the Department of Justice, Postal inspection Service and the Federal Trade Commission spearheaded the investigation. To date, more than 30 individuals have been charged in Operation Biz Opp Flop. Of those charged, 14 have been convicted and 16 await trial. Miami attorney Gerald Wahl was appointed receiver for AED in September 2004 under an FTC temporary injunction and freeze order.
