Scott M. Doumas, Mail Fraud, New York 2015

Long Island Salesman Sentenced to 4 Years in Prison for Mail Fraud and Conspiracy

A federal judge has sentenced Scott M. Doumas, 44, of Setauket-East Setauket, New York, to four years in prison and ordered him to pay $290,664 in restitution for his role in a mail fraud scheme involving the sale of vending machine businesses.

Doumas worked as a sales representative and sales manager at Vendstar, a company based in Deer Park, New York, from 1999 to 2009. He was found guilty of mail fraud and conspiracy after a six-week jury trial in 2015.

The investigation into Vendstar began in 2010 and resulted in criminal charges filed against 22 individuals in 2012 and 2013. All 22 of those defendants were convicted, and 18 of them have now been sentenced.

The scheme involved the sale of business opportunities for plastic bulk vending machines that dispensed loose candy and nuts for 25 cents. Vendstar advertised nationwide in newspapers and on the Internet, promising to provide everything its customers needed to be successful, including the machines, candy, assistance in finding profitable locations, and ongoing customer support.

The sales representatives, including Doumas, misrepresented the business opportunity’s likely profits, the amount of money that Vendstar’s prior customers were earning, how quickly customers were likely to recover their investment, the quality of locations that were available for the vending machines, and the level of location assistance that customers would receive from locating companies recommended by Vendstar.

The U.S. Postal Inspection Service conducted a thorough investigation into the scheme, and the case was prosecuted by Senior Litigation Counsel Patrick Jasperse and Alan Phelps of the Civil Division’s Consumer Protection Branch.

In related news, Paul E. Raia, 65, of Brookhaven, New York, was sentenced to serve three years in prison and ordered to pay $339,354 in restitution for his role in the same scheme.

Related Federal Cases