FTC Wins $31 Million Judgment in "Wolf" Vending Machine Case

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The Federal Trade Commission has won a $31 million federal district court judgment against Florida-resident Marvin Wolf and 33 other individual and corporate defendants allegedly involved in a huge scheme to sell vending machine business opportunities by using a host of deceptive claims and practices. The judgment follows settlements with 12 other individual and one other of the corporate defendants in the FTC's case.

The FTC had filed charges against the defendants in March 1994, alleging that they used phony references or "shills," and lied about investors' earning potential and success, exclusive territories for franchisees, the assistance they would provide in locating the machines in high-traffic spots, and when machines would be delivered, in order to induce consumers from across the United States to invest thousands of dollars each. The vending machines dispensed pizza and other food items, as well as other products. Many investors never even got their machines, the FTC alleged. In addition, the FTC charged, the defendants violated the FTC's Franchise Rule by failing to give potential investors key pre-purchase information about the franchisor and its key officers that may have tipped consumers to the deceptive scheme.

Following the FTC's charges, the court issued a temporary restraining order and appointed a receiver over the companies. Twelve individuals and one corporate defendant subsequently settled under consent orders that required redress payments and, in some instances, require defendants to post bonds to protect their future customers before engaging in certain kinds of sales activities. The FTC said it is uncertain how much of the judgment announced today can be collected.

The judgment was issued on Jan. 31, by U.S. District Court Judge Wilkie D. Ferguson, Jr. in the amount of $31,362,576. It applies to all the defendants who had not yet settled the FTC's charges against them, including Marvin Wolf, Vincent Leonardo, James Holler, Clyde King and 30 corporations:

  1. Action Games Technologies, Inc., of Phoenix, Arizona
  2. Allstates Leasing, Inc., of Dover, Delaware
  3. American Manufacturing Industries, Inc., of Boca Raton, Florida
  4. Burger Quik, Inc., of Boca Raton
  5. Coin Management, Inc., of Phoenix
  6. Corporate Travel Services, Inc., of Boca Raton
  7. DBJ I, Inc., of Boca Raton
  8. DLW Distributors, of New York City
  9. Entertainment Enterprises, Inc., of Vienna, Virginia
  10. GBC Enterprises, Inc., which also does business as E-Z Vend, Kick Start, Multi Vend, Research America, Snack Vending USA, Sun & Fun Vacation Club, and/or Vend-A-Nutt, of Boca Raton
  11. Honor America, Inc., of Phoenix
  12. Indoor Amusement Games, Inc., of Boca Raton
  13. Jameson & Adams, Inc., of Phoenix
  14. Magnum Vending Corp., of New York City
  15. North American Pharmaceutical, Inc. (also does business as TV Ventures), of Boca Raton
  16. Northwest Marketing, Inc. (also does business asCascade Vending and/or Quick Vend), of Phoenix
  17. Novelty Plush, Inc. (also does business as Debbie's Amusements and/or Prizes Unlimited), of Delray Beach, Florida
  18. Olympic Entertainment, Inc. (also does business as Olympic Games International), of Phoenix
  19. Omni Investors Group, Inc., of Boca Raton
  20. Omni Marketing Group, Inc., of Phoenix
  21. Outreach America, Inc. (also does business as Juice De Lite and/or Raks-4-Kids), of Boca Raton
  22. Pizza King, Inc. (also does business as Family Entertainment), of Boca Raton
  23. Pizza Royale, Inc., of Boca Raton
  24. Project America, Inc., of Delray Beach
  25. R&J Vending, Inc., of Boca Raton
  26. S&M Manufacturing Corporation, of Boca Raton
  27. S&M Industries, Inc., of Deerfield Beach, Florida
  28. Treat Vendor, Inc., of Phoenix
  29. U-Vend, Inc. (also does business as Boca Amusements), of Boca Raton
  30. United Capital, Inc., of Boca Raton

The FTC has published free brochures for consumers looking to invest in a small business opportunity or franchise. Copies of "Business Opportunity Scams: Vending Machines and Display Racks," and "Franchises and Business Opportunities," as well as the summary judgment and other documents associated with the Wolf case, are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261.

To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC's World Wide Web site at: http://www.ftc.gov

(FTC File No. X940029)
(Civil Action No. 94-8119-CIV-Ferguson)

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