A man who helped perpetrate a scam that promised consumers they could obtain the “American Dream” by selling coffee and greeting cards at retail establishments across the country will spend 70 months in jail and must repay $6.4 million to victims.
The Department of Justice announced today that it has closed yet another chapter in a scheme – operated in Costa Rica – that defrauded thousands of Americans through a series of fraudulent business opportunities.
A U.S. District Court in southern Florida sentenced John White, aka Gregory Garrett, on charges of conspiracy to commit mail and wire fraud for his part in an operation that fraudulently induced Americans to buy business opportunities in USA Beverages Inc., Twin Peaks Gourmet Coffee Inc., Cards-R-Us Inc., Premier Cards Inc. and The Coffee Man Inc.
According to the Justice Department, from 2005 to 2008 the man and at least 11 other co-conspirators sold business opportunities to individuals for $10,000 and up, claiming the businesses would allow purchasers to sell coffee or greeting cards from display racks located at other retail establishments.
Each of the businesses operated for several months and after one company closed, the next opened.
The conspiracy used various means to make it appear to potential purchasers that the businesses were located in the U.S., including using bank accounts, office space and other services in the Southern District of Florida and elsewhere. However, in reality, the conspirators operated out of call centers in Costa Rica.
As part of his plea, White admitted that he and his co-conspirators made numerous false statements to potential purchasers of the business opportunities, including that purchasers likely would earn substantial profits; that prior purchasers of the business opportunities were earning substantial profits; that purchasers would sell a guaranteed minimum amount of merchandise, such as greeting cards and beverages; and that the business opportunity worked with locators familiar with the potential purchaser’s area who would secure or had already secured high-traffic locations for the potential purchaser’s merchandise stands.
Additionally, purchasers were falsely told that the profits of the companies were based in part on the profits of the business opportunity purchasers. The Justice Department alleges that these statements created the false impression that the companies had a stake in the purchasers’ success and in finding good locations for the stands, when that wasn’t the case.
“This international and domestic investigation shows the Postal Inspection Service’s resolve to protect Americans from business opportunity scams,” Postal Inspector in Charge Ronald Verrochio of the U.S. Postal Inspection Service (USPIS) Miami Division, said in a statement.
U.S. Citizen Sentenced In Connection With Costa Rica-Based Business Opportunity Fraud Ventures [Department of Justice]
by Ashlee Kieler via Consumerist
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