Rich Music chief jailed over timeshare sting
U.S.-based Latin music power player Rich Mendez, founder of the independent Rich Music label, has been hit with jail time for his role in a bogus timeshare setup.
Mendez, a former car-dealership owner in Orlando, Florida, was sentenced to 60 months in prison for wire fraud, and will serve it out from Miami’s Federal Correctional Institution, a low-security facility which should allow him to continue guiding his music business.
Rich Music employs almost 40 staff and boasts a roster with such artists as Panama’s Sech, Dalex, Justin Quiles and Dímelo Flow. The label has managed six entries on Billboard’s Hot Latin Songs chart since 2016, with Rich Music ending the year in the top 10 of Billboard’s Top Latin labels chart.
Born in Brooklyn of Puerto Rican descent, Rich launched his label in 2007 as a vehicle for his brother’s music ambitions. He turned his attentions to the label full-time in 2013 and tapped son Josh, now COO, to help drive the company.
“Josh is going to do a hell of the job running the company, and I’ll still help run the company,” Mendez told Billboard’s Leila Cobo. “I don’t want this to affect anything that has to do with the company. At the end of the day the company and the business should stand for itself.”
Adds Rich Music general counsel Philip Reizenstein: “We have prepared for this and we are going to continue to produce spectacular music for our artists.”
Mendez’s punishment is connected to a telemarketing fraud scheme, which is said to have run from at least March 2009 to March 2011 and targeted retirement-age folks.
According to a federal indictment from 2015, Mendez and seven others were arrested or self-surrendered after the fraud was exposed.
As part of the “elaborate scheme,” the indictment reads, the eight arrested had made “unsolicited phone calls to owners of resort timeshare properties to induce them into paying fees associated with the bogus sale of their property.”
Mendez’ rep claims his client wasn’t initially aware that the operation was fraudulent. The label chief pleaded guilty to one count of conspiracy to commit wire fraud and cooperated with investigators, paying over $300,000 in restitution, the Miami Herald reports.
The troublesome timeshare industry was in the news ahead of Christmas thanks to a new report issued by the Australian Securities and Investments Commission, which warned that timeshare schemes were risky for consumers and that major regulatory reform is on the way.
This article originally appeared on The Industry Observer, which is now part of The Music Network.