Action News investigation leads to federal charges in alleged bogus businesses case
CHERRY HILL, New Jersey (WPVI) -- An Action News Investigation we first brought to you in the summer of 2018 has now led to federal charges. A trio of men are accused of selling fraudulent businesses.
Federal investigators say David Weinstein, formerly of Cherry Hill; Vijay Reddy of Michigan; and Kevin Brown of Burlington sold phony medical billing businesses to dozens of unsuspecting victims.
FBI agents arrested the men earlier this month.
Steve Sami says he's among the nearly two dozen alleged victims identified by federal investigators since Action News first began investigating the alleged con artists. He says the charges are a relief.
"I was elated, that was my Christmas gift," said Sami.
SEE ALSO: Investigation: Men accused of selling bogus businesses
Weinstein and his cohorts purported to sell blocks of contracts with medical providers who allegedly wanted to outsource billing, collections, and other functions.
Weinstein's marketing materials advertised, "We do the hard part. We get the doctors under contract for you." According to a sales brochure, buyers got "a clear and direct approach to profitability."
The criminal complaint says the victims wired down payments ranging from $15,000 to $255,000.
Luke Farnoly is a private investigator who helped serve subpoenas in a civil case related to the alleged fraud.
"He was selling businesses that essentially were not viable and he had many, many shell companies, that every time we'd locate a business, it was closed. He'd open up another business-- a shell company," Farnoly said.
GET ACTION: Contact the Action News Investigation Team
Sami says he dropped down $75,000 for a contract with Jay Reddy that promised 300 medical answering service contracts. Sami says he received only a few, and when he questioned Reddy, he received bogus excuses.
Sami says after threatening to expose Reddy and go to law enforcement, David Weinstein left a profanity-laced voicemail.
The defendants are charged with conspiracy to commit wire fraud. They face up to 20 years in prison and substantial fines if convicted. Sami says it's about time the wheels of justice turned.
"To see the federal government do something about it, I enjoy seeing that and I respect that," said Sami.
Action News reached out to the attorneys representing the three men. So far they've had no comment.
