The predatory scheme takes advantage of a decades-old grey market.
Here's how the racket is said to work: new food vendors, often vulnerable immigrants desperate for a way to sell their wares legally, are approached by a man offering to lease them one of the scarce and highly sought-after city permits that would help them authenticate their small business. Then, after they fork over the cash, he vanishes.
Eyewitness News spoke with two vendors who said they were targeted, as well as Street Vendor Project, an organization promoting fair working conditions for street vendors.
There are only 7,000 two-year food vending permits available in New York City, and there's nothing stopping those who manage to acquire a coveted $200 city permit from profiting heavily by leasing it out for thousands more.
"The running price right now is about $25,000 on the underground market, cash transaction. There's no paperwork that goes with it because it's sort of a legal grey area. And this is going under the city's nose, and has been for decades," said Carina Kaufman-Gutierrez of Street Vendor Project.
Vendors who are targeted may not feel comfortable going to the authorities. Now that they've collectively lost hundreds of thousands of dollars, they can't afford not to speak out.
"This guy took the money, and he disappeared," said one vendor, who paid $8,000, and got nothing in return. "We want the people to know about this guy. Not to do any business with him."
Another vendor told us he paid $9,000 to the man before he bailed on him, three times. He never got the permit he needed to keep his cart open.
"I lost the business. I lost the money. I lost the location," he said, emotional as he recounted his story to Eyewitness News.
He said he can't stomach the idea of any more innocent, hardworking vendors being swindled -- just because they were trying to operate legally.
Food carts still get inspections, and when that happens, the permit holder needs to be there. That's where many of these leasing transactions happen.
The Street Vendor Project is now warning food vendors by spreading the word on social media that this man has ripped off at least 16 vendors by bailing on the inspection meetings in the Bronx and never delivering the promised permit.
"I text him, I call him, so many times. He said, 'I'm coming.' He never showed up," said one vendor who was targeted.
Eyewitness News reached out to the accused scammer for comment. He has yet to answer any of our many questions.
Even though he has over a dozen small claims court cases pending against him, he has yet to be publicly named by law enforcement as a suspect in a crime.
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