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Second Florida Man Gets Jail Time For Coffee Vending Biz-Op Scam

Posted On: 2/10/2012

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coffee service, biz-op scam, business opportunity, James Cummings, William P. Dimitrouleas, coffee vending machine, vending machine business opportunity scam, M&D Gourmet Coffee Inc., Coffee Heaven LLC, Divino Trio Coffee & Vending Co., single-cup coffee machine

BOCA RATON, FL -- A second Florida man has been sentenced to prison for committing fraud for his role in a coffee vending machine business opportunity scheme.

James Cummings of Boca Raton, FL, was sentenced by U.S. District Judge William P. Dimitrouleas in Ft. Lauderdale to a year and a day in prison, and three years supervised release. Additionally, he was ordered to pay more than $137,000 in restitution.

Cummings' co-conspirator, Manuel Rodriguez, the leader of the scheme, was convicted by a jury of one count of conspiracy and seven counts of wire fraud in September 2011. In December, Rodriguez was sentenced to 120 months in federal prison.

The men allegedly sold a business package that included coffee machines, locations in which to place them and ongoing support in operating the machines. They sold the business opportunities for a minimum price of approximately $10,000 each, but didn't deliver on the promises they made to their customers.

Cummings pleaded guilty on Nov. 29 to conspiracy to commit mail fraud for his participation at three Florida companies: M&D Gourmet Coffee Inc. (Boca Raton); Coffee Heaven LLC (Deerfield Beach); and Divino Trio Coffee & Vending Co. (Ft. Lauderdale). The criminal information charging Cummings alleged that he served as a salesman at these companies from December 2003 to February 2008.

In pleading guilty, Cummings admitted that he made a number of false claims to customers about the profits generated by the machines. In addition, he admitted that he led potential buyers to believe that they would recoup their investment in 12 to 18 months. Cummings also said he misrepresented to his customers that "locating companies" would find high-traffic, high-profit locations in which to place the vending machines. In reality, as prosecutors alleged, would-be entrepreneurs who invested in the equipment suffered a total loss, and some buyers never received the machines they purchased.

"This defendant took advantage of investors who wanted to make a better living for themselves, causing them to pay thousands of dollars for worthless business opportunities," said Tony West, assistant attorney general for the Civil Division of the U.S. Department of Justice. "This prosecution and the court's sentence should send a signal to others that we will pursue those who perpetrate fraud regardless of their position in the scheme."

The case was prosecuted by Matthew Ebert of the Justice Department's Consumer Protection Branch.