Feds Arrest Two in Possible DVD Scam in Florida

The U.S. Attorney's Office accused two men of a fraud scheme in South Florida Thursday. A press release from the United States Attorney's Office Southern District of Florida said that Anthony Rocco Andreoni and Russell G. MacArthur, Jr. have been indicted for their involvement in a DVD fraud scheme.

Andreoni and MacArthur are the founders of a company called American Entertainment Distributers, Inc. (AED). AED was located in Hollywood, Florida, and for a number of years sold a business opportunity featuring a DVD vending machine. AED advertised these DVD machines widely on the internet and through mail. Authorities said they promised potential customers that AED would help them secure profitable locations for their new machines. Additionally, AED claimed that profits would be large for those participating in the DVD vending machine program. The government said that AED even went so far as to refer potential buyers to so-called "references" who sold the machines. These "references" were actually on the AED payroll.

The advertising must have been somewhat convincing. Purchasers paid AED anywhere from $28,000 to $40,000 per DVD machine. Over 400 consumers throughout the United States bought into this scheme and lost over 19 million dollars combined.

Nine individuals had already been charged in relation to this scheme. One of those individuals was the above mentioned MacArthur's brother, who was serving as president of the company. He is now serving a ten year prison sentence. MacArthur himself was actually caught and originally indicted in 2005, but somehow quickly fled to Costa Rica to avoid pending prosecution. He has just been recently extradited from Costa Rica and could face 20 years in prison on the fraud charges and other criminal charges.

Another individual indicted, Neal Isanuk, acted as a sales representative for the company. He has been indicted with conspiracy to commit mail fraud and faces a maximum of five years in prison. Investigators with the United States Postal Inspection Service are aggressively pursuing anyone who could still be involved with this scheme.Patrick Jasperse and Douglas Stearn, Trial Attorneys, United States Department of Justice, Office of Consumer Litigation are prosecuting this case.

Consumers would be wise to approach business opportunities that promise huge profits in exchange for little effort with much caution. Some of these "opportunities" may be nothing more than a scam. Consumers should check any company they are considering investing money into with the Better Business Bureau. Also, consumers should ensure that the company has a permanent mailing address that can be verified by a phone book or online directory. Many of these scammers will only list a PO box as their permanent address. If that is the case, be very wary about pursuing any action with them.

Legitimate business opportunities are available, but if the charges against AED are true, they have reminded us to do our research first.

Sources:

Southern District of Florida Attorney's Office, http://www.usdoj.gov/usao/fls/PressReleases/070719-01.html