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Indian American Among 3 Charged With Conspiracy to Defraud Victims of More Than $3 Million

Indian American Among 3 Charged With Conspiracy to Defraud Victims of More Than $3 Million

  • Vijay Vanam Reddy formerly operated a medical billing and answering service through which he and his co-conspirators advertised business opportunities for sale for medical contractors.

A Michigan man is among three men charged with conspiring to defraud at least 43 victims out of more than $3 million through the sale of phony business opportunities. Vijay Vanam Reddy 45, of Milan, Michigan, was arrested on Dec. 10 and charged with one count of conspiracy to commit wire fraud. His co-conspirators, David Weinstein 61, formerly of Cherry Hill, New Jersey, and now of Dallas, Texas and Kevin Brown, 61, of Burlington, New Jersey were arrested earlier and slapped with the same charges as Reddy.

As per a new release from Craig Carpenito, United States Attorney for the District of New Jersey, Brown acted as the business broker for most of the transactions and received a commission for the sales he brokered. Weinstein or Reddy acted as the seller and signed the contracts with the victims. Reddy, who was described to investors as a “marketing genius” formerly operated a medical billing and answering service business. Investors also were told Reddy had a “special talent” for finding doctors’ offices in need of business services.

From September 2015 through August 2018, Reddy and his co-conspirators advertised business opportunities for sale on various websites. They purported to sell “blocks” of contracts with medical providers who allegedly wanted to outsource their medical billing, collections, appeals, answering, credentialing, or transcription functions. After agreeing to purchase the blocks of medical providers, victims entered contracts with companies represented by Weinstein or Reddy and wired down payments ranging from $15,000 to $255,000 to accounts controlled by Weinstein or Brown. The remainder of each purchase price was payable when the conspirators fulfilled the contract by delivering the agreed-upon number of providers.

After receiving the down payments, Weinstein and Reddy delivered to each victim only a small number of medical providers. Despite not fulfilling the contracts of any of the buyers identified by law enforcement, the conspirators continued to sell blocks of medical providers to new buyers and refused to provide refunds for their failures to satisfy the terms of the contracts. The conspirators also periodically sold batches of previously signed contracts and disclaimed further responsibility for those contracts to insulate themselves from complaints or legal action from disgruntled buyers.

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At least 43 victims sent more than $3 million to accounts controlled by the conspirators, the press release said, adding that there are additional 21 victims “who collectively paid an additional $1.1 million to the conspirators.” The defendants spent the victims’ money on personal expenses and transferred money to other bank accounts controlled by them or their family members, the press release said. 

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