That's the question posed by Vanessa Blum in this Sun-Sentinel article:
"A once in a lifetime opportunity." "A part time business that earns a full time income." "Call now!" "Don't miss out!"The late night television ads for the Box Office Express DVD rental machine peddled a dream. But it didn't take long for customers of the Hollywood firm to realize they'd been sold an empty promise.In some cases the machines never came. Sometimes they arrived but didn't work properly. Those that functioned would never yield impressive profits.Today federal prosecutors are asking a Miami federal judge to sentence the founder of American Entertainment Distributors Inc. to 23 years in prison for conspiracy, fraud and violating a court order banning him from selling business opportunities. Russell MacArthur, 43, pleaded guilty to those charges in February.
Prosecutors contended the false statements and inflated profit forecasts MacArthur, used to sell the DVD vending machines at American Entertainment amounted to a massive fraud that cost 400 investors a total of nearly $20 million. His plan all along, according to prosecutors, was to make as much money as possible and then declare bankruptcy and fold.It's an area where federal authorities in South Florida have been cracking down. A string of recent cases targeting so-called "business opportunity fraud" have involved the sale of debit card dispensers, Internet kiosks, payphones and anti-aging devices.So far, 14 individuals affiliated with American Entertainment have been convicted, not including MacArthur's partner, Anthony "Rocco" Andreoni, who died in March just hours before he was set to plead guilty.The defendants had worked for at least 16 other business ventures in which most customers lost almost all their investment, prosecutors alleged.In a recent court filing, MacArthur's attorney, Frank Rubino, asserted that prosecutors have exaggerated financial losses tied to American Entertainment. Most customers received the DVD rental machines they paid for, if not the profits they expected, Rubino said.But prosecutor Patrick Jasperse of the Justice Department's consumer fraud section responded that the machines, which sold for $28,000 to $40,000, had no value because American Entertainment failed to provide locations for them and other services that were promised.
This afternoon, Judge Martinez sentenced MacArthur to 23 and 1/2 years.
UPDATED -- Here's the story of the sentencing by Blum. A couple of reasons for the lengthy sentence:
[Judge] Martinez said MacArthur deserved extra punishment for violating a court order banning him from selling business opportunities and for fleeing to Costa Rica after his indictment in 2005. He pleaded guilty in February.The judge called the DVD rental machine, which sold for $28,000 to $40,000, "a worthless piece of junk."
The defense lawyer responds:
Defense attorney Frank Rubino called the 23-year prison term "excessive" and a sentence more suitable for a drug lord or a terrorist."I'm not making light of this crime, but my god, 10, 12, 13 years is a long time," Rubino said.
The prosecutor:
But prosecutor Patrick Jasperse asked for harsh punishment, saying MacArthur was responsible for stealing the life savings and college funds of retirees and hardworking individuals."Russell MacArthur is a danger to the public," Jasperse said.
The SDFLA Blog is dedicated to providing news and notes regarding federal practice in the Southern District of Florida. The New Times calls the blog "the definitive source on South Florida's federal court system." All tips on court happenings are welcome and will remain anonymous. Please email David Markus at dmarkus@markuslaw.com
Showing posts with label business opportunity fraud. Show all posts
Showing posts with label business opportunity fraud. Show all posts
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