Two South Jersey Men Charged With Conspiracy to Defraud Victims of Over $3M
Two men from South Jersey, one from Burlington County and the other from Camden County, along with a man from Michigan, have been 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 late last week that 61-year-old David Weinstein, formerly of Cherry Hill and now of Dallas; 45-year-old Vijay Vanam Reddy of Milan, MI; and 61-year-old Kevin Brown of Burlington, are each charged by complaint with one count of conspiracy to commit wire fraud.
All three men were arrested last week.
According to documents filed in this case along with 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.
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.
Authorities say Brown acted as the business broker for most of the transactions and received a commission for the sales he brokered while 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, according to Carpenito's office.
Law enforcement agents have tentatively identified an additional 21 victims who collectively paid an additional $1.1 million to the conspirators.
If you think you were a victim of this scam, you are urged to contact the FBI at (800) CALL-FBI.