Judge Holds Owner Of Internet Companies In Contempt

Attorney General Spitzer today announced that his office has obtained a contempt order against an Erie County man who defrauded scores of consumers through a series of Internet-based businesses that sold refurbished vending machines.

State Supreme Court Justice John P. Lane of Erie County found Craig J. Schieder in contempt of a temporary restraining order obtained by Spitzer’s office in October and sentenced him to thirty days in Erie County jail.

In addition to the contempt sanction, Spitzer’s office secured a judgment ordering Schieder to pay at least $90,000 in restitution to injured consumers plus any additional moneys uncovered after he provides an accounting of business revenues and expenses.

"Unscrupulous business practices by Internet-based companies undermine public confidence in e-commerce," Spitzer said. "This office will continue to prosecute those individuals or businesses that defraud consumers, whether on Main Street, Wall Street or over the Internet."

Over the past four years, nearly 140 consumers have filed complaints with either the Attorney General’s office or the Better Business Bureau (BBB) alleging that Schieder and his companies, Best Buy Vending, Inc., Best Buy Laundry, Inc., Vending Outlet, LLC, and American Vending Distributors, Inc., either failed to deliver merchandise which had been paid for, or shipped products that were defective or not what the consumer ordered. Consumer requests for refunds went unanswered or were rejected.

Spitzer’s six-month investigation revealed that Schieder conducted his business through a series of companies, one closing as another opened, in order to evade customers to whom he owed merchandise or money.

After he ignored a subpoena and a civil order, Spitzer’s office brought suit in October against Schieder and his various companies, and obtained a temporary restraining order prohibiting Schieder from accepting advance payments on customer orders. Spitzer’s office alleged, and the Court determined, that Schieder violated the temporary restraining order on several occasions. As a result, the, Court held Schieder in criminal contempt of Court.

In addition to granting Spitzer’s request for restitution, Justice Lane also order Schieder to:

• Close and dissolve his current Internet retailing companies, including immediately shutting down the web sites;
  
• Not start or maintain a business that sells products over the Internet for 60 months unless permission is granted by the court; and
  
• Provide a full accounting to the Attorney General’s office of all funds received and spent since the issuance of the restraining order and return all monies not spent on bona fide business expenses.

Individuals with complaints against Schieder or any of his companies are encouraged to contact the Attorney General’s consumer help line at (800) 771-7755. Out-of-state consumers should call (716) 853-8400.

This case is being handled by Assistant Attorney General James Morrissey of the Buffalo Regional Office.