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Energy Chew Vending Scam Leaders Sentenced To Prison, Ordered To Pay $5M

Posted On: 3/16/2011

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vending machine scam, Gary Luckner, Richard Black, Lou Gubitosa, American Vending Systems, National Vending Systems Inc., Mad Dog Energy Products, Richard Allen, Richard Houston, Gary Michaels, Trey Friedmann, Jennifer Putnam, vending, vending machine business, vending machine swindle, vending scam, blue sky, bulk vending, bulk vending machine, energy balls, energy chews, energy shots, business opportunity fraud, coin-op news, vending news, vending business hack, vending business scam, vending machine locator scam, vending machine rip-off, U.S. Justice Department's Office of Consumer Litigation, Patrick Jasperse

DENVER, CO -- The two leaders of a Colorado-based vending scheme who allegedly defrauded more than 400 investors throughout the country of $5 million have been sentenced to prison.

The Justice Department and U.S. Postal Inspection Service, which led the investigation, announced that Gary Luckner, 41, of Highlands Ranch, CO, was sentenced on March 16 to 90 months in prison and was ordered to pay $4,524,456 in restitution. Richard Black, 52, of Arcadia, CA, was sentenced to 97 months in prison and was ordered to pay $5,066,456 in restitution.

Black and Luckner created, led and operated the business scheme between 2007 and 2009, according to documents filed in the case. The two men arranged for various telemarketing sales rooms to sell business opportunities for vending machines that dispensed highly caffeinated energy chews and energy shots.

For a purchase price of typically about $10,000, purchasers were promised vending machines, high-traffic locations in which to place the equipment and ongoing assistance in operating the business. Most of the victims reportedly never made any money and lost entire investments. The largest of the telemarketing sales rooms involved -- and the one said to have made the most sales -- was American Vending Systems, which was located in Centennial, CO.

Black and Luckner acknowledged in their plea agreements that sales representatives lied about likely profits from the business, the quality of locations that were available for the vending machines and the level of customer service that purchasers would receive. The defendants also used phony "references" to persuade the victims to invest.

Black himself was one such reference. Using an alias, He falsely told potential buyers that he was an American Vending customer who operated a financially profitable vending route.

Black and Luckner pleaded guilty to conspiracy to commit mail fraud. Four other defendants were also convicted as part of the same scheme. | SEE STORY

They are:

Trey Friedmann, 46, of Denver was sentenced by Judge David M. Ebel to two years in prison and was ordered to pay $465,734 in restitution. Friedmann was the top salesman at American Vending.

Louis J. Gubitosa, 63, Littleton, CO, was sentenced earlier this year to 18 months in prison. Gubitosa was the president of American Vending.

Henry Melvin Hendrix, 48, Galt, CA, was ordered earlier this year to serve five years of probation, including eight months of home confinement. Hendrix was a phony reference who was paid to pretend to be a successful vending route owner.

Jennifer Putnam, 33, Bluffton, SC, was sentenced earlier this year to five years of probation, including eight months of home confinement. Putnam operated a locating company involved in the scheme that falsely claimed to have good locations ready and waiting in the area of the potential buyer.

"The victims' stories are heartbreaking," said Tony West, Assistant Attorney General of the U.S. Justice Department's Civil Division. "Like so many Americans struggling to make ends meet, these folks were trying to supplement modest incomes by investing in themselves and starting their own businesses. Instead of taking a step up the financial ladder, their losses now put them in a financial hole because these defendants lied to them. That's why this department will continue to prosecute and seek stiff sentences for fraudsters like those sentenced today."

Luckner, Black and the other defendants were prosecuted by trial attorney Patrick Jasperse of the U.S. Justice Department's Office of Consumer Litigation.