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Medicor To Pay $16.5 Million

July 31, 2002
A federal court has ordered Medicor LLC to pay more than $16.5 million in redress for consumers who were victims of the company's medical billing scam.

In March 2001, the Federal Trade Commission charged the Van Nuys, California-based company and its principals, Andrew Rubin and Matthew Rubin, with engaging in a variety of fraudulent practices.

The FTC alleged that the defendants engaged in a telemarketing scheme from mid-1999 to 2001 in which they deceptively sold work-at-home medical billing opportunities to more 40,000 people. Typically, consumers responded to advertisements in local newspapers touting large salaries and the need for at-home workers to perform medical billing work for doctors in their community.

When consumers called the defendants' toll-free number, telemarketers made additional claims. Specifically, the FTC's complaint alleged that the defendants misrepresented: 1) how much consumers who purchased the medical billing opportunity would earn; 2) that the defendants would arrange for consumers to receive medical billing work from physicians; and 3) that consumers would readily obtain refunds upon request. The defendants charged consumers $375 for the supposed opportunity.

On July 18, 2002, the U.S. District Court for the Central District of California granted the FTC's motion for summary judgment against the defendants, entered a judgment for the full amount of consumer redress, and issued a permanent injunction against all defendants.

In addition to ordering the defendants to pay restitution to consumers and disgorge ill-gotten gains, the Court permanently barred the defendants from the promotion, advertising, marketing, sale, or offering for sale of any medical billing work-at-home opportunity.

The Court's order also prohibits the defendants from engaging in, or assisting others in engaging in, deceptive acts or practices in the business of telemarketing. The order further enjoins the defendants from making, or assisting others in making, any false or misleading oral or written statement or representation in connection with the promotion, advertising, marketing, sale, or offering for sale of any work-at-home opportunity, product, service, or investment.

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