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Three Men Charged with Conspiracy to Defraud Victims of More Than $3 Million

Three Men Charged with Conspiracy to Defraud Victims of More Than $3 Million

CAMDEN, N.J (STL.News) A Burlington County resident and a former Camden County resident are among three men charged with conspiring to defraud at least 43 victims out of more than $3 million through the sale of phony business opportunities, U.S. Attorney Craig Carpenito announced.

David Weinstein 61, formerly of Cherry Hill, New Jersey, and now of Dallas, Texas; Vijay Vanam Reddy 45, of Milan, Michigan, and Kevin Brown, 61, of Burlington, New Jersey, are each charged by complaint with one count of conspiracy to commit wire fraud.  Reddy was arrested today and is scheduled to appear in Detroit, Michigan, federal court this afternoon. Brown and Weinstein were arrested on Dec. 8, 2020.  Brown appeared before U.S. Magistrate Judge Ann Marie Donio in Camden federal court via videoconference on Dec. 8, 2020, and was released on $50,000 bond.  Weinstein appeared before U.S. Magistrate Judge Rebecca Rutherford in Dallas federal court on Dec. 9, 2020 and was released.

According to documents filed in this case and statements made in court:

From September 2015 through August 2018, the conspirators advertised business opportunities for sale on various websites.  They purported to sell “blocks” of contracts with medical providers who allegedly wanted to outsource their medical billing, collections, appeals, answering, credentialing, or transcription functions.  The buyers would then provide the contracted services to the medical providers and earn a profit.  The conspirators promised to deliver a specified number of providers and pledged that their proprietary marketing efforts would provide a guaranteed client base to the buyers.

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To induce buyers to purchase the business opportunities, the conspirators created fake references purporting to be buyers who vouched for their prior business purchases from the conspirators.  In fact, the references were Reddy’s family member and Weinstein, using aliases to speak with potential buyers.

After agreeing to purchase the blocks of medical providers, victims entered contracts with companies represented by Weinstein or Reddy and wired down payments ranging from $15,000 to $255,000 to accounts controlled by Weinstein or Brown.  The remainder of each purchase price was payable when the conspirators fulfilled the contract by delivering the agreed-upon number of providers.

After receiving the down payments, Weinstein and Reddy delivered to each victim only a small number of medical providers.  Despite not fulfilling the contracts of any of the buyers identified by law enforcement, the conspirators continued to sell blocks of medical providers to new buyers and refused to provide refunds for their failures to satisfy the terms of the contracts.  The conspirators also periodically sold batches of previously signed contracts and disclaimed further responsibility for those contracts to insulate themselves from complaints or legal action from disgruntled buyers.

Brown acted as the business broker for most of the transactions and received a commission for the sales he brokered.  Weinstein or Reddy acted as the seller and signed the contracts with the victims.

At least 43 victims sent more than $3 million to accounts controlled by the conspirators.  Law enforcement agents have tentatively identified an additional 21 victims who collectively paid an additional $1.1 million to the conspirators.  The defendants spent the victims’ money on personal expenses and transferred money to other bank accounts controlled by them or their family members.

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The count of conspiracy to commit wire fraud is punishable by a maximum of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.

U.S. Attorney Carpenito credited special agents of the FBI’s South Jersey Resident Agency, under the direction of Special Agent in Charge Michael J. Driscoll in Philadelphia; special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez in Newark; and postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Damon Wood in Philadelphia, with the investigation leading to the charges.

SOURCE: USDOJ.Today