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Feds Accuse Medical Billers Network Inc

Promoters sold deceptive work-at-home scheme

May 12, 2009
The marketers of a work-at-home scam who led consumers to believe they could earn $500 or more per week processing medical bills and would receive training and access to customers have agreed to settle Federal Trade Commission charges that their deceptive claims violated federal law. The settlements bar future violations and require them to pay more than $15,000 in consumer redress.

The FTC sued the defendants in February 2005 as part of a crackdown on deceptive business opportunity and work-at-home schemes. The defendants agreed to a court order that barred them from further violations and froze their assets. Subsequently, the defendants were found to be in contempt for violating the order.

The settlement with Chris Taylor and Medical Billers Network Inc. (MBN) bars them from misrepresenting material facts in any medical billing employment opportunity, work-at-home opportunity, or business venture, and from making earnings claims without a reasonable basis and supporting materials.

Taylor and MBN are also barred from misrepresenting material facts in the sale of any goods or services, such as the total cost; any restrictions, limitations, or conditions; and the nature or terms of a refund, cancellation, exchange, or repurchase policy. They are also prohibited from violating the Telemarketing Sales Rule, including failing to disclose any refund, no-refund, cancellation, exchange, or repurchase policy before a customer pays.

The settlement with Wilson Jose Caceres and Caceres Quality Distribution Inc. (CQD) permanently bans Caceres from marketing or selling any medical billing employment opportunity, work-at-home opportunity, or business venture. In addition, Caceres and CQD are prohibited from misrepresenting material facts in the sale of any goods or services, violating the Telemarketing Sales Rule, and failing to disclose any refund, no-refund, cancellation, exchange, or repurchase policy before a customer pays.

The settlement with Taylor and MBN imposes a $4 million judgment against them and a $840,000 judgment against relief defendant Knarek Kalantaryan. The settlement with Caceres and CQD also imposes a $4 million judgment. The judgments are suspended based on the defendants inability to pay. The full judgments will be imposed if they are found to have misrepresented their financial condition. Under the settlements, Taylor and Caceres must pay the FTC about $15,000 in ill-gotten gains.

The settlements bar the defendants from selling or otherwise disclosing personal information about anyone who paid them. The settlements also contain record-keeping and reporting provisions to allow the FTC to monitor compliance with the orders.

Feds Accuse Medical Billers Network Inc...

Bogus Pharmacy Card Scam Hit Thousands


The Federal Trade Commission has filed suit in federal court to halt a scam that drained millions of dollars out of thousands of consumers' checking accounts for "discount pharmacy cards" the consumers didn't know about, didn't order, and didn't get.

The FTC estimates that as many as 90,000 consumers were victims.

U.S. District Court Judge Robert Clive Jones has issued a temporary restraining order to halt the scam and freeze the defendants' assets. The FTC will seek a permanent ban on the scheme and request that the frozen funds be preserved for consumer redress.

In papers filed with the court, the FTC charged that since January 2004, defendants using the name "Pharmacycards.com" electronically debited thousands of consumers' accounts for $139, without consumers' knowledge or consent. Prior to the unauthorized debiting of their checking accounts, consumers had no contact with the defendants.

According to the FTC, the defendants attempted to debit more than $10 million from consumers' checking accounts in less than three months. The FTC alleges that the defendants gained access to the banking system via third-party payment processors by claiming that they were engaged in a legitimate business selling pharmacy discount cards.

Their Web site touted the benefits of their cards and advertised retailers such as Target and Wal-Mart that participated in the discount program. The Web site also listed a toll-free customer service number and a mailing address in Canada. According to the FTC, the major retailers' logos were hijacked they didn't participate in the program. The mailing address was false and mail sent to the address was returned.

Some consumers received letters after money had been withdrawn from their account explaining the program and saying that because the consumer had previously purchased a product from one of the defendants' "marketing partners" using their checking account, the consumer did not need to provide the account number again. The letter said that consumers who were not interested could call the toll-free customer service number to cancel within five days of receiving the letter. By this time, the money already had been debited from their accounts.

According to the complaint, the defendants provided consumers' checking account numbers to the third-party payment processors with whom they had contracts. One processor alone debited more than 72,000 checking accounts for the defendants, generating more than $10 million in attempted debits.

While more than 50,000 of those transactions were cancelled or returned, many other consumers were unaware of the transaction or unable to have it reversed, and $139 was removed from their accounts without their authorization.

The FTC alleges that the scam violates federal law and will ask the court to order a permanent halt to the practices and order consumer redress.

The FTC advises all consumers to regularly review their bank statements and quickly dispute any unauthorized charges.

Defendants in the case are 3rd Union Card Services, Inc., doing business as Pharmacycards.com, a Delaware Corporation; Helmcrest Ltd., a company incorporated under the laws of Cyprus, doing business as Pharmacycards.com; David Graham Turner, and Steve Pearson.

The Federal Trade Commission has filed suit in federal court to halt a scam that drained millions of dollars out of thousands of consumers' checking accoun...

Electronic Processing Systems Settles FTC Charges

WASHINGTON, Oct. 8, 2002 -- The Federal Trade Commission today said it has settled a complaint alleging that unscrupulous marketers misled thousands of consumers into paying $480 apiece for a worthless medical billing work-at-home business opportunity. The settlement is the second law enforcement action of its type in the last three weeks.

The latest action brings to a close the FTC's case against Nevada-based Electronic Processing Services, Inc. (EPS) and its principal David Stewart. The FTC alleged that these defendants defrauded consumers by misrepresenting their relationship with physicians, how willing those physicians would be to sign up for medical billing help, and what consumers could expect to earn by working at home.

"Companies claiming that consumers can make easy money rarely deliver on their promise," said Howard Beales, III, Director of the FTC's Bureau of Consumer Protection. "Unfortunately, the purveyors of fraudulent medical billing work-at-home scams continue to trap unwary consumers in their web of misrepresentations. We urge all consumers to look very carefully at these pitches before spending their hard-earned money."

According to the FTC's complaint, EPS and Stewart violated Section 5 of the FTC Act through a variety of misrepresentations to consumers. The final order announced today prohibits EPS and Stewart from misrepresenting that they have job openings or work-at-home positions to fill, that work-at-home opportunities are available in particular parts of the country, that they will provide consumers with the names of doctors who are likely to become billing clients, or that they have established relationships with doctors. The order also prohibits the defendants from telling consumers that they can earn a specific level of income through work-at-home medical billing and from failing to disclose material information concerning refunds or guarantees.

The order requires the defendants to pay $23,400 in redress, plus an estimated $5,000 from merchant account reserves. However, as the cost of administering any redress program would far exceed funds available for redress, the FTC does not anticipate that defrauded consumers will obtain reimbursements.

Electronic Processing Systems Settles FTC Charges...

Medicor Ordered to Pay Over $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.

Medicor Ordered to Pay Over $16.5 Million...

FTC Accuses 11 Companies of Telemarketing Fraud

WASHINGTON, April 15, 2002 -- The Federal Trade Commission (FTC) today announced the filing of 11 federal district court complaints against inbound telemarketers. Among those charged were the purveyors of advance-fee loans and credit cards, at-home medical billing programs, work-at-home envelope stuffing schemes, and a "consumer protection" agency that was, in reality, no more than a shill for a vending machine business opportunity.

The FTC said it was potentially the most far-reaching law enforcement sweep ever against inbound telemarketing fraud _- where consumers call companies based on classified ads, Internet banners, or other promotions.

"Consumers spotting a classified ad or telephone pole promotion and acting on their curiosity by calling the number face the same risk of being misled, deceived, or defrauded as they do when responding to a high-pressure sales call from a telemarketer," said FTC Bureau of Consumer Protection Director Howard Beales III. "If the offer appears too good to be true, be on guard."

"White collar crime is on the increase and a favorite weapon of choice is the telephone. Don't abandon common sense just because you initiated the call, and it would be wise to check with the Better Business Bureau first," Ken Hunter, president and CEO of the Council of Better Business Bureaus, advised consumers.

A Focus on Medical Billing Scams

Beales said that in addition to the general message that consumers should be careful when calling companies in response to classified ads or similar promotions, five of the cases filed by the FTC illustrate the fact that consumers interested in working at home doing medical billing should be particularly wary of pitches that promise easy money with little or no effort. While the telemarketers may provide lists of local doctors they say are interested in having their billing done by consumers, many times these doctors have not consented to have their information distributed, are not looking for outside help, or may need more skilled employees to complete this technical task.

"I would advise someone looking to start his or her own medical billing business to learn about the challenges involved in medical billing, including the complex laws which apply to [it]," said Cyndee Weston, Executive Director of the American Medical Billing Association. "I would also advise them that up to one year of training may be necessary in order to even begin to market his or her medical billing services to healthcare providers."

In 2001, the FTC and 43 Better Business Bureaus (BBBs) across the United States and Canada surfed the Internet and newspaper classifieds looking for ads promising consumers they could make fast, easy money running medical billing businesses from home. Hundreds of ads from dozens of companies were identified, with the worst purveyors of medical billing fraud targeted by the five cases announced today. The remainder received warning letters that their practices may be in violation of federal law.

The Commission's Complaints

The 11 complaints announced today were filed against the following companies and individuals for alleged violations of either the Federal Trade Commission Act, the Telemarketing Sales Rule, or both.

  • Credit Enhancement Services, LLC, et al. Based in Camden, New Jersey and Woodhaven, New York, the defendants allegedly used postcard mailers and in-bound telemarketing to pitch advance-fee credit cards to consumers for a one-time fee ranging from $219.99 to $289. According to the FTC, some consumers who made the payments for their "pre-approved" and "unsecured" card got nothing, while others simply received an information package welcoming them to a discount buying card service, along with applications for major credit cards (for an additional fee).
  • Antoine J. Peissel, d/b/a The Woodway Group, et al. Operating out of telemarketing boiler rooms in Houston, Texas, the defendants allegedly operated an advance-fee scheme, originating through "want ads" that promised consumers a loan or other extension of credit after they paid a "processing fee" of between $69 and $89. Few, if any, consumers ever received the loan promised them.
  • Capital Choice Consumer Credit, Inc., et al. Operating a large-scale advance-fee scam based in Miami, Florida, the defendants allegedly either debited customers' bank accounts of $199.95 or obtained payments of $43 after promising to provide a credit card with a $4,000 to $7,000 credit limit. For their money, however, consumers only received an "approval certificate" and application package, and were told that to "activate" their card they had to pay even more money up front. The defendants also sent consumers a blue plastic card - that was not a bank card - for use only with the defendants' merchandise catalog.
  • Universal Bancom, LLC and John Sarabia, d/b/a Nissan Bancorp. Based in Chatsworth, California, the defendants allegedly misrepresented to consumers that they could get a Visa, MasterCard, or other major credit card by paying a $287.25 fee. They also did not disclose that the card was actually a merchant card, not a bank card; that the card could only be used to purchase items from the defendants' catalog; or that consumers could only pay for 50-75 percent of the cost of the items with the card.
  • Electronic Processing Services, Inc., et al. Based in Las Vegas, Nevada, the defendants marketed a $480 medical billing work-at-home opportunity, allegedly misrepresenting that the doctors whose names were supplied were likely to hire consumers to process their billing claims, and that consumers could expect to make a certain amount of money as medical billers.
  • International Trader, d/b/a Premier Business Solutions, et al. A Nevada corporation, based in Los Angeles, California, the defendants marketed work-at-home medical billing opportunities through classified advertisements for $189. Through their telemarketing pitch, they allegedly misrepresented: 1) that they would provide consumers with the names of doctors likely to use them to process billing claims from home; 2) that consumers buying their materials could expect to earn a specific level of income (between $15 and $45 per hour); and 3) that consumers could readily obtain a refund upon request. Medical-Billing.Com, Inc., d/b/a Professional Management Consultants, et al. A Texas corporation based in Carrollton, Texas, the defendants sold their medical billing package for between $3,500 and $9,500. In telemarketing their program, they allegedly made numerous misrepresentations, including promises that:

    1) they would help recruit doctors who would use the consumers to process their billing; 2) customers would earn substantial income providing billing services for health care professionals; and 3) they would give customers a full refund if the program did not meet their performance expectations.
  • Electronic Medical Billing, Inc., et al. A Nevada corporation operating in Mission Viejo, California, the defendants sold a medical billing work-at-home business opportunity to consumers for $325. They allegedly misrepresented: 1) that the doctors whose names they provided to consumers were likely to hire them to do their billing; and 2) that consumers could expect to make a certain level of income through medical billing (between $25,000 and $50,000 a year, according to their classified ads).
  • Physicians Healthcare Development (PHD Billing), Inc., et al. Based in Burbank, California, the defendants pitched a work-at-home medical billing opportunity for $319 to $425, telling consumers that they could make between $3 and $15 for each claim processed. They allegedly misrepresented that the system they sell will instantly enable consumers to launch a home-based billing business, that consumers can earn substantial income for this work, and that the doctors whose names they provided were prepared to hire the consumers to process their claims.
  • Terrance Maurice Howard, d/b/a True Techniques and Absolute Mailers. Based in San Antonio, Texas, the defendants marketed an at-home envelope stuffing business opportunity that they deceptively told consumers could earn between $2,000 and $4,000 a week. They also allegedly deceptively represented that after paying an initial "registration" fee, consumers could expect to make $5 for each envelope stuffed.
  • Affiliated Vendors Association, Inc. et al. A for-profit company operating out of Grand Prairie, Texas, the defendants allegedly ran a sham Better Business Bureau-type organization that gave consumers glowing reports about its members - sellers of vending machine business opportunities. The company was allegedly paid by the vending machine sellers for pitching their businesses to consumers over the phone, never told consumers of its connection to the sellers, and misrepresented the support and services that they would provide to business opportunity purchasers.
In filing each complaint (and accepting the consent with Nissan Bancorp) the FTC is seeking - or has received - relief to immediately stop the violations alleged, freeze the defendants' assets pending trial, and/or obtain a receiver to ensure all assets are maintained pending trial.
FTC Accuses 11 Companies of Telemarketing Fraud...

Data Medical Fined $500,000

Promoters Banned For Life From Telemarketing

WASHINGTON, July 12, 2001 -- Data Medical Capital, Inc., and its principal, Bryan D'Antonio, will be permanently banned from selling business ventures, employment opportunities or work-at-home opportunities, and from telemarketing as part of a settlement with the Federal Trade Commission. They will also be required to pay more than $559,000 in consumer redress.

The Commission had alleged that the defendants were engaged in a scheme to sell bogus work-at-home medical billing opportunities.

"The ability to make a decent living working from home would be a dream come true for many young parents and people who have difficulty leaving the house, such as some people with disabilities and seniors," said Howard Beales, Director of the FTC's Bureau of Consumer Protection.

"Unfortunately, the dream in this case did not come true. The fact is that few consumers who purchase a medical billing business opportunity are able to find clients, start a business and generate revenues. Consumers should be very skeptical of pitches for work-at-home opportunities that sound too good to be true."

In October 1999, the FTC filed a complaint in federal district court against Data Medical Capital, Inc., also doing business as Datamed and MedCo, and Bryan D'Antonio, alleging that they misrepresented their medical billing work-at-home opportunities by bolstering false earnings claims and misrepresented the assistance that consumers would receive in getting medical billing work.

According to the FTC, the defendants promised consumers that they could earn a minimum of $23,400 per year by using their home computers to process medical bills for physicians with whom the defendants had established relationships. The court issued a temporary restraining order with asset freeze against the defendants.

In addition to the ban from engaging in the sale of business ventures, employment opportunities, or work-at-home opportunities and telemarketing, the proposed settlement would also require the defendants to stop any collection attempts and to return any uncashed checks to consumers. The defendants would also be prohibited from selling their customer lists.

Data Medical Fined $500,000...

FTC Sues Medicor LLC - Charges Medical Billing Scheme Misled Consumers

Charges Medical Billing Scheme Misled Consumers

March 9, 2001
A federal district court has ordered a temporary halt to a California-based telemarketing scheme that purportedly sold work-at-home medical billing opportunities. Medicor LLC and its manager, Andrew Rubin, promised consumers that they could earn up to $1,500 per week using their home computers to process medical bills for physicians in the consumers' community.

The Federal Trade Commission alleges that the defendants misrepresented their medical billing work-at-home opportunities by touting false earnings claims, misrepresenting the assistance that they would arrange for consumers to get medical billing work and that refunds were readily available. At the Commission's request, the court froze the defendants' assets, and appointed a temporary receiver pending a hearing on the Commission's motion for a preliminary injunction.

The FTC filed its complaint in the U.S. District Court in the Central District of California against Medicor and Rubin as part of "Project Homework" - a law enforcement action targeting work-at-home scams that typically victimize stay-at-home parents, the physically disabled, non-English speakers, and people who cannot secure employment outside the home. Companies that promote these schemes promise consumers that they can reasonably expect to earn substantial income by working from home performing various tasks, such as assembling crafts, stuffing envelopes, or performing medical billing services for physicians.

The defendants promoted and sold medical billing work-at-home opportunities to consumers throughout the United States via newspaper ads and an Internet web site, www.medicorllc.com. According to the FTC, Medicor, based in Van Nuys, California, advertised in the "help wanted" section of various local newspapers touting the high earnings consumers could make using Medicor's medical billing software. A typical ad stated:

"EARN $$$ HELPING DOCTORS process claims from home. $20 - $40/ hour potential. Computer & modem required. We train. (888) 736-9051 Ext. 895."

When consumers responded to the ad, the telemarketers falsely represented that stay-at-home parents or others who wish to work from their homes could make from $20 to $40 per hour processing claims for doctors, or as much as $40,000 per year.

To further induce consumers to purchase Medicor's billing software, the defendants' telemarketers would falsely represent that they would arrange for doctors whose claims the consumers would be processing. In an attempt to convince consumers that Medicor was a legitimate company, the defendants would sometimes refer potential customers to their web site, which offered testimonials from purportedly successful Medicor billers. The defendants charged from $325 to $495 for their business opportunity. When consumers complained that Medicor's business opportunity had been misrepresented, the defendants would often refuse to refund the purchase price. At this point, most consumers were told for the first time that company policy was not to give a refund if the software package was opened.

The FTC complaint alleges that the defendants misrepresented how much consumers who purchased the medical billing opportunity would earn; that they would arrange for consumers to receive medical billing work from physicians; and that consumers would readily obtain refunds upon request. According to the FTC, consumers, in fact, did not earn the promised income, Medicor did not arrange for consumers to receive medical billing services from physicians, and consumers could not readily obtain refunds.

FTC Sues Medicor LLC - Charges Medical Billing Scheme Misled Consumers...

Medical Billing Scheme Sued by FTC

FTC Files Suit Against Bogus Medical Billing "Opportunity"

WASHINGTON, Oct. 18, 1999 -- A federal district court has issued a Temporary Restraining Order with Asset Freeze against an Orange County, California company that purportedly sold work-at-home medical billing opportunities. 

Data Medical Capital, Inc. and its owner Bryan D'Antonio, promised consumers that they could earn a minimum of $23,400 per year using their home computers to process medical bills for physicians with whom the defendants had established relationships. 

The Federal Trade Commission alleges that the defendants misrepresented the opportunities by bolstering false earnings claims and misrepresenting the assistance that consumers would receive in getting medical billing work.

The Commission has asked the court to continue the asset freeze, issue permanent injunctions and order the defendants to pay consumer redress.

The FTC filed its complaint in the U.S. District Court in the Central District of California against Data Medical Capital, Inc., doing business as DataMed and MedCo, and Bryan D'Antonio, also known as Brian D'Antonio. The defendants promoted and sold medical billing work-at-home opportunities via newspaper ads and an Internet web site, "www.medco.net".

According to the FTC, the scam worked like this: Data Medical advertised in the "help wanted" section of various newspapers seeking medical processors. A typical ad stated:

MEDICAL BILLING Nationwide company seeking Billers. PC required. No exp. necessary. Earn $31,500 plus. Call 1-800-262-6595.

The defendants' web site also encouraged consumers to call the listed toll-free number to learn more about the job opportunity. 

When consumers called, they were connected to telemarketers, who went into their sales pitch, emphasizing doctors' need for people to perform electronic medical billing. Consumers were told that the defendants would arrange for the consumer to receive generally between 150-250 claims per week from doctors with whom the defendants had business arrangements, and that consumers would earn from $3 to $5 per claim. 

Consumers were then told that in order to take advantage of the Data Medical opportunity all they would have to do is pay $299 - $399 for a software package, which would include the medical billing software, a tutorial and instruction manual, and the names of their prearranged physician clients. When consumers complained that the Data Medical opportunity had been misrepresented, the defendants would not refund the purchase price.

The FTC complaint alleges that the defendants falsely represented that consumers who purchased the medical billing opportunity would earn a minimum of $23,400 per year. The complaint also alleges that the defendants falsely represented that they would arrange for consumers to receive medical billing work from physicians with whom the defendants had established relationships. According to the FTC, consumers, in fact, did not earn the promised income, and the physicians referred to did not even know of Data Medical and did not want or need the services offered.

The Commission vote to authorize staff to file the complaint in district court was 4-0.

The Commission filed the complaint in the U.S. District Court, Central District of California, Southern Division, in Santa Ana, on October 14, 1999. The judge signed the TRO with Asset Freeze on October 15.

FTC Files Suit Against Bogus Medical Billing Work-At-Home Scheme...