Former Cherry Hill man gets prison for business-contract fraud
CAMDEN – A former Cherry Hill man has received a 12-year prison term for his role in a fraud that took more than $5 million from unwitting investors.
David Weinstein, 62, operated a scheme that purported to sell medical-related business opportunities from December 2015 through November 2020, according to the U.S. Attorney’s Office for New Jersey.
The fraud duped about 90 victims, whose money covered personal expenses for Weinstein and two alleged conspirators, Vijay Reddy of Michigan and Kevin Brown of Burlington.
They allegedly used the fraud's proceeds for travel, real estate, jewelry and college costs, among other purposes, the federal prosecutor's office said in a statement.
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Weinstein and Brown used the name of an Evesham firm, Tannenbaum & Milask, when dealing with investors, according to a criminal complaint. It described the Route 73 business, acquired by Weinstein in 2012, as “a once-legitimate brokerage firm.”
The fraud offered investors “blocks” of contracts with medical providers who allegedly wanted to outsource their business services, such as billing and answering services, the complaint said.
Investors expected to provide those services for a profit, but Weinstein and Reddy allegedly produced only a small number of potential clients and did not fulfill the buyers’ contracts.
The fraud’s operators fooled victims by providing phony references from non-existent clients, according to the U.S. Attorney’s Office statement.
“In fact, the references were Weinstein, Reddy, and their friends and family members, and they used aliases and disguised phone numbers to speak with potential buyers,” it alleged.
Weinstein or Reddy acted as the seller and signed contracts with the victims, while Brown was the broker for most of the transactions, the statement said.
U.S. District Judge Robert Kugler on Thursday also ordered Weinstein to forfeit almost $2 million and to pay restitution of $5.85 million.
Weinstein, most recently a Dallas resident, previously pleaded guilty in Camden federal court to conspiracy to commit wire fraud and money laundering.
Reddy admitted guilt in June to a conspiracy charge and has not been sentenced.
Brown is awaiting trial.
Jim Walsh covers public safety, economic development and other beats for the Courier-Post, Burlington County Times and The Daily Journal.
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This article originally appeared on Cherry Hill Courier-Post: Feds: David Weinstein and others took more than $5M from investors
