Carmel on the Case: Video Rental Rip-Off

WSVN -- They were supposed to be the next big thing in video rentals.

No more driving to the store. No more waiting in line. Just pick your flick right at a vending machine.

Jim MacArthur: "In Europe this has already been there for 10 years and we're proud to be able to bring it to the American market."

That was Jim MacArthur back in april talking about his company american entertainment distributors in hollywood.

Today, mcarthur says he isn't even allowed to talk about his company.

And that's because the federal government closed the doors to a-e-d.

The office is in the dark and so are many investors - many of whom have posted complaints on the internet site - ripoffreport.Com.

Investor: "Took our money and did not deliver."

Investor: "No one answers the phones."

Nestor Gonzalez of Southwest Miami-Dade can relate.

He thought AED Sounded good... So good, he even had a lawyer look over the contract... And in March, he invested.

Nestor Gonzalez: "Basically I ah paid $38,000. $36,500 for the machine and the rest for a delivery charge. And basically what I got for that was - nothing."

But AED isn't the only business accused of misleading the public. Currently, multiple companies with multiple victims are under investigation.

This man knows first hand how these businesses operate. He says he has worked for other companies that sold bogus business opportunities.

Industry Insider: "It's just a plain rip off from the very beginning."

He talked with us on the condition we protect his identity.

He says the men running these cons will likely never go to to jail.

When the heat is on - operators just start up another company.

Industry Insider: "The day they close their doors, they've already been open for a month at another location."

And this industry insider maintains the bad guys have no fear of the lawsuits and fines that result when they do get busted.

Industry Insider: "And they laugh - literally laugh at the authorities that they do nothing."

The insider also told us the satisfied customers given as references - are shills. They get paid $40 dollars for every phony endorsement they give. He says some work for multiple companies using multiple cell phones. So no matter what area code you dial - you can be calling some con man sitting on the beach.

Call her in Dade at 305-627-CLUE

Or In Broward at 954- 921-CLUE