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Long Island Man Gets Jail Time For Vending Machine Business Opportunity Scam

Posted On: 11/15/2011

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MIAMI -- Michael Eisenberg of Long Island, NY, was sentenced on Nov. 7 for his involvement in several fraudulent vending business opportunity ventures. U.S. District Judge Joan A. Lenard in Miami sentenced Eisenberg to 28 months in prison, a $7,500 fine, at least $15,000 in restitution and three years supervised release.

On July 19, Eisenberg pleaded guilty to conspiracy to commit wire fraud for his operation of two firms, Atomic Vending and Energy Vend, both located on Long Island. The criminal charges against Eisenberg alleged that he served as an owner and salesman at Atomic Vending and Energy Vend from March 2008 to March 2010. Each firm sold business opportunities to the public for a minimum price of approximately $6,000.

Potential investors were allegedly told they would receive a vending route. In pleading guilty, Eisenberg admitted that he and others made a number of false claims about the profits generated by the firms' vending machines. In addition, he admitted salesmen led potential buyers to believe that they would recoup their investments in a year or sooner. Eisenberg admitted that he misrepresented that locating companies would find high-traffic, high-profit locations in which to place the vending machines. In reality, the government alleged, buyers earned little to no money from their investments.

Prior to Atomic Vending, Eisenberg had operated another business opportunity firm called Lifestyle Vending. In December 2006, the Justice Department brought a civil case against Lifestyle Vending and Eisenberg, alleging that they made unsubstantiated claims to business opportunity buyers. The case resulted in entry of a federal court order barring Eisenberg and others from misrepresenting business opportunities.

After entry of the federal court order in the Eastern District of New York in March 2008, Eisenberg founded Atomic Vending and, later, Energy Vend, to continue the allegedly deceptive sales practices of Lifestyle Vending. In the Nov. 7 sentence, Judge Lenard increased Eisenberg's period of incarceration based upon his violation of the 2008 federal court order.

"Fraud schemes like this one target consumers who are trying to start a small business and earn an honest living," said Tony West, assistant attorney general for the Civil Division of the Department of Justice. "This defendant not only misled investors about business opportunities; he continued to defraud people after being ordered by a court to stop. We believe the judge appropriately took this behavior into account when issuing her sentence."

The U.S. Postal Inspection Service investigated the case. It was prosecuted by trial attorney Richard Goldberg of the Civil Division of the Department of Justice.