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International Law: Misleading Advertising Law
Energy Chews Vending Machine Fraud
From Vending Times, the Energy Chews fraud.
Five men are accused of mail and wire fraud in connection with a "business opportunity" offer involving vending machines that dispensed energy balls, energy chews and energy shots.
On May 24, charges were brought separately by criminal information filings here against Richard Black, a/k/a "Richard Allen," a/k/a "Richard Houston," and Gary Luckner, a/k/a "Gary Michaels," as well as Trey Friedmann and Louis J. Gubitosa. On May 27, a criminal information was brought against Henry Melvin Hendrix.
The first criminal information filing charged that Black and Luckner operated American Vending Systems, National Vending Systems Inc. and Mad Dog Energy Products. Buzz Bites chocolate energy chews, popular in retail, were among the vendible products promoted by Mad Dog.
It also is charged that American Vending and National Vending used phony references to induce sales, and that one of the phony references was Black, who posed as a successful vending machine route operator under the names of "Richard Allen" and "Richard Houston."
Friedmann is alleged to have been a salesman at American Vending, and Gubitosa owned the company. Hendrix is charged with acting as a phony reference for American Vending. All are accused of making material misrepresentations to, and concealing material facts from, individuals who purchased the "business opportunity."
On June 8, Gubitosa pled guilty to conspiracy to commit mail fraud. His sentencing hearing is scheduled for Aug. 20, before Judge Lewis T. Babcock at the Byron G. Rogers United States Courthouse in Denver.
A change of plea hearing for Hendrix has been scheduled for Sept. 16, before Judge Marcia S. Krieger at the Alfred A. Arraj United States Courthouse in Denver.
A change of plea hearing for Friedmann has been scheduled for Sept. 17, before Judge David M. Ebel at the Rogers Courthouse.
Black and Luckner will appear before Judge Robert E. Blackburn at a hearing on Sept. 17 at the Arraj Courthouse. They are expected to plead guilty.
ANOTHER ENERGY CHEW CASE
Separately, the San Diego Superior Court in early April issued a permanent injunction against Utah's Independent Vending Concepts and The Financial Edge Inc., described as a foreign company. The judgment named Gary S. Mills and Rebecca W. Mills, IVC's officers, as the defendants. The company also was involved in a business opportunity offering vending machines that dispense energy chews.
The permanent injunction prohibits IVC and its principals from selling any products, equipment, supplies or services related to a "seller assisted marketing plan" that requires an initial payment of more than $500 in California. It also restricts the use of testimonials and potential earnings data when representing a SAMP without substantiating those claims. IVC also was ordered to pay $100,000, which was evenly split between California's Unfair Competition Fund and the attorneys' fees for the plaintiffs.
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