The Hustler Who Turned Vending Machines Into a Fortune — and Lost It All

Andrew Levenson had a talent for spotting opportunities most people walked right past.

Phone cards. Sticker machines. Chocolate vending. Energy drinks.

Again and again, he found overlooked ideas, turned them into profitable businesses, and made extraordinary amounts of money.

But there was a pattern.

He was exceptional at creating demand.

He was much less successful at protecting the businesses he created.

That pattern eventually led him to Red Bull, a business reportedly making him as much as $500,000 per week—and ultimately to federal prison.

His First Business Started in a Convenience Store

In the early 1990s, prepaid calling cards were everywhere.

Most were designed for international calls, but Levenson noticed something missing: a prepaid card focused on long-distance calls within the United States.

He created USA Connect.

There was just one problem.

He didn't actually have the phone minutes needed to make the card work.

So he walked into an AT&T office in Miami and claimed he had an appointment.

He didn't.

But it worked.

He got a meeting, pitched the idea and eventually convinced AT&T to sell him around $30,000 worth of telephone minutes.

Then he hired a team of salespeople and started placing the cards in convenience stores throughout South Florida.

Within roughly three months, he says USA Connect was available in about 800 stores.

Soon he was selling approximately 40,000 phone cards per week and personally earning around $50,000 to $60,000 per month.

At only 24 years old, he says he once made about $100,000 in a single month.

Then AT&T noticed what he was doing.

The telecommunications giant launched its own competing product.

Within months, Levenson's business was essentially finished.

It wouldn't be the last time this happened.

A $20 Sticker Inspired His Next Fortune

A few years later, Levenson was shopping at Claire's when he saw two young girls buy a couple of sheets of novelty stickers for almost $20.

He couldn't believe the price.

But instead of dismissing it, he started asking questions.

Were kids really spending that much money on stickers?

The answer appeared to be yes.

That gave him an idea.

What if a machine could take someone's picture and instantly turn their face into personalized stickers?

He approached a manufacturer and eventually received a prototype resembling an arcade machine.

The manufacturer agreed to let him sell it for three years.

His cost was roughly $4,500 per machine.

Instead of selling individual machines, Levenson packaged three together for around $25,000.

He says he eventually sold more than 4,000 machines.

Once again, however, his success had an expiration date.

When the three-year agreement ended, the manufacturer took control of the product.

Levenson had created another successful market without owning the long-term advantage.

Then He Reinvented the Gumball Machine

His next idea came while looking at old-fashioned gumball machines.

He wondered why they couldn't dispense individually wrapped chocolates instead.

He found a manufacturer willing to modify the machines.

According to Levenson, each machine cost him only around $80.

He then sold packages of 30 machines for approximately $10,000.

The margins were enormous.

He says he sold more than 13,000 machines in around 18 months and made roughly $1 million.

Eventually Hershey noticed.

Levenson says company executives initially weren't thrilled about their product being associated with his machines.

So he presented them with a simple argument.

If 10,000 machines sold only 30 chocolates per day, those machines could move roughly 300,000 chocolates every day.

That's around 100 million chocolates per year.

And Hershey wouldn't have to pay him anything for the additional distribution.

The objection quickly became much less important.

But the business still didn't last.

Other vending-machine manufacturers realized there was nothing stopping them from producing similar machines.

Instead of charging thousands of dollars for a business package, competitors could sell machines directly for a few hundred dollars.

Levenson's advantage disappeared.

The Opportunity That Changed Everything

Then came Red Bull.

In the early 2000s, energy drinks were exploding in popularity.

But Levenson noticed an interesting problem.

Traditional vending machines were designed around standard 12-ounce soda cans.

Energy drinks weren't standardized.

Red Bull cans were smaller.

Monster and Rockstar cans were larger.

Many traditional vending machines couldn't easily accommodate all of them.

Levenson created what he called an Energy Center—a vending machine specifically designed for energy drinks.

The business worked.

He says he was making roughly $20,000 to $30,000 per week.

Then one Friday, his secretary walked into his office.

There was a man sitting in the lobby named Dietrich.

He said he owned Red Bull.

Levenson didn't believe it at first.

But the visitor was reportedly Red Bull co-founder Dietrich Mateschitz.

And he had come with an opportunity.

The Red Bull Machine

Mateschitz showed Levenson a photograph of a striking six-foot-tall vending machine designed specifically for Red Bull.

It looked like a giant Red Bull can.

Levenson immediately understood the sales potential.

He had already been selling generic energy-drink machines.

Now he could sell a machine connected to one of the fastest-growing beverage brands in the world.

He wanted exclusivity.

Red Bull reportedly required him to sell at least 75 machines per week.

Levenson wasn't worried.

He thought he could sell 75 per day.

He abandoned his generic Energy Center business and went all-in on Red Bull.

That decision changed his life.

From $20,000 a Week to $500,000 a Week

Sales exploded.

Levenson says his income jumped from approximately $20,000–$30,000 per week to between $400,000 and $500,000 per week.

His workforce expanded dramatically.

A company that had previously operated with around 20 employees eventually grew to roughly 150 employees.

Demand became so intense that the manufacturer reportedly struggled to produce enough machines.

Levenson even says he personally supplied hundreds of thousands of dollars for manufacturing equipment so production could increase.

Within roughly 18 months, he says he had sold around 30,000 Red Bull vending machines, along with approximately 10 million cans of Red Bull.

He had finally reached a level of success far beyond his earlier ventures.

But something else was happening.

The company was becoming much larger than the person running it.

Levenson describes the problem with one simple sentence:

“I'm not a CEO. I'm a hustler.”

The Warning in Las Vegas

One of the strangest moments happened during a Red Bull event in Las Vegas.

Motocross star Jeremy McGrath reportedly approached Levenson about getting a vending machine.

During their conversation, McGrath gave him an unexpected warning:

Watch out for these guys.

Levenson didn't think much of it.

Six days later, according to his account, Red Bull sent him a cease-and-desist notice.

The relationship was effectively over.

By then, however, Levenson had already done something extremely valuable for Red Bull.

He had helped put tens of thousands of branded vending machines into the marketplace.

The market had been created.

Red Bull no longer necessarily needed the salesman who had created it.

Then Everything Started Falling Apart

Red Bull contacted thousands of Levenson's customers and informed them that it was no longer doing business with his company.

Customers panicked.

Some had recently purchased expensive vending-machine packages.

Others wondered where they would buy Red Bull inventory.

Some wanted refunds.

Complaints began reaching regulators.

And another problem became increasingly important.

Many of the machines apparently weren't performing as well as buyers expected.

Levenson says he was surprised to discover that some Red Bull machines were selling only three or four cans per day.

The machine looked impressive.

Red Bull was hugely popular.

But vending remained a location business.

A machine in a great gym or office building could perform extremely well.

A machine in a poor location could barely sell anything.

Experienced vending operators would relocate underperforming machines.

Many first-time investors didn't.

They expected something closer to passive income.

When Salesmanship Became a Legal Problem

The government eventually focused heavily on the way Levenson's salespeople discussed potential earnings.

A salesperson might walk a customer through a hypothetical calculation.

For example:

Imagine a gym where a machine sells two cans per hour.

Over 12 hours, that's 24 cans.

If the machine earns $1 profit per can, that's $24 per day.

Multiply that across several machines and annual projected earnings suddenly appear substantial.

Levenson admits this type of discussion became problematic under regulations governing earnings claims.

In one example from the transcript, the hypothetical numbers could suggest approximately $75,000 per year from ten machines.

What may have felt like ordinary salesmanship inside the company became evidence in a federal fraud case.

The FTC Had Already Called 828 Times

One of the more surprising claims in the transcript involves regulators.

Levenson says the Federal Trade Commission had previously called his different businesses 828 times while posing as potential customers.

According to him, those calls never resulted in the FTC shutting him down or formally reprimanding him.

But the situation changed once customer complaints began piling up.

The scale of the business also made the case enormous.

Levenson says approximately 2,700 investors were involved and that the businesses processed more than $100 million, although he disputes how some of the numbers were later portrayed.

Then the FBI Arrived

One morning at approximately 5:30 a.m., law enforcement showed up at Levenson's home.

According to his account, roughly 30 officers and agents were involved.

The group included the FBI, Secret Service, Postal Inspectors and local police.

They even brought a battering ram.

Eventually, Levenson's case went to trial.

The jury deliberated for five days.

Then came one of the most dramatic moments of his story.

The first verdict was read.

Not guilty.

Then another.

Not guilty.

Again.

Not guilty.

After six not-guilty verdicts, Levenson says he started straightening his tie.

He thought he was going home.

Then the remaining verdicts were read.

Guilty.

Again.

Guilty.

And again.

He was convicted on the remaining counts.

Levenson eventually received a sentence of roughly 26 years in federal prison, though his sentence was later reduced after various forms of assistance and cooperation. The transcript says one later reduction removed approximately seven years.

The Business Lesson Behind the Story

Levenson's career followed an almost unbelievable pattern.

He discovered phone cards.

The business exploded.

AT&T entered.

It disappeared.

He created personalized sticker machines.

The business exploded.

The manufacturer eventually took over.

He created chocolate vending machines.

The business exploded.

Competitors copied them.

He created energy-drink vending machines.

Then Red Bull appeared.

That business exploded beyond anything he had experienced before.

And eventually it collapsed too.

The lesson isn't that Levenson couldn't build businesses.

Quite the opposite.

He was remarkably good at finding demand.

His problem was turning that demand into something durable.

He repeatedly created businesses that depended heavily on manufacturers, brands, salespeople or agreements he didn't fully control.

When those relationships changed, his advantage could disappear almost overnight.

And when Red Bull turned his business from a successful operation into a massive national enterprise, those weaknesses became much more dangerous.

There's a huge difference between being able to sell something and being able to build an organization capable of surviving its own success.

Levenson eventually summarized that distinction better than anyone else could:

“I'm not a CEO. I'm a hustler.”

When you're making $20,000 per week, that may not seem like a serious problem.

When you're making $500,000 per week, managing 150 employees and selling tens of thousands of machines, it can become everything.

Watch the full video here at the Matthew Cox Youtube Channel