Crimes of Persuasion

Schemes, scams, frauds.

Fraudulent Medical Billing and Administrative Services Opportunities

This Is Going To Hurt A Little

You are considering buying a business opportunity which consists of a system for processing and submitting medical claims on behalf of doctors and dentists.

The sellers of the opportunity say that there's a crisis in the health care system due partly to the overwhelming task of processing paper claims; that electronic claim processing is the solution, and that because only a small percentage of claims are transmitted electronically the market for billing centers is wide open.

They also tell you that many doctors who process claims electronically want to "outsource" or contract out their billing services because it will save them money. They promise that you can earn a substantial income working full or part-time, providing services like billing, accounts receivable, electronic insurance claim processing, and practice management to doctors and dentists.

They follow-up by sending you promotional materials that typically include a brochure, application, sample diskettes, a licensing agreement, disclosure document, and in some cases, testimonial letters, video cassettes and reference lists.

The "system package" also includes a two-day training session on how to use the software, marketing tips, a "lead" list of doctors and dentists in your area to whom you should attempt to market your billing services, and an assurance of follow-up support from them regarding marketing, sales tips, software-related questions, and business development.

They say you can reasonably expect to achieve a level of earnings between $18,000 and $23,000 per year by working just 28 minutes per day at home. "Put a bit more time in and earn in excess of $50,000."

You decide to buy the package for $6996 but soon find the earning levels unrealistic because the physicians and dentists that they recommend are not ready and willing to purchase your medical billing services. You also discover that the package consists of medical billing software which can be purchased at a retail cost of $69.

You find they no longer care to provide the promised "significant and valuable assistance" in the operation of your business with the formerly promised training and comprehensive follow-up support and technical assistance.

You are unable to find clients, start a business, and generate revenues, let alone earn a substantial income and recover your investment, because competition in the medical billing market is very strong among a number of large and well-established firms.

Who Better to Teach Consulting?

Knowing you should be trained to run such a business you decide to take a "consultant" training course you see advertised that will also set you up as an associate. The opportunity ads might be for a "Capital Loan Broker" or a "Medical or Tax Recovery Service".

The courses and affiliations are to consist of a two-day training session, class manuals, computer software, a newsletter, one-year of support and a national network of independent business consultants.

The first field of endeavor, in capital acquisition consulting, is where you apply for bank loans on behalf of clients and then keep a percentage of each loan as a fee. The second is expense reduction, where you help clients identify areas where money can be saved and then keep a percentage of the savings as a fee.

They say you can earn consulting fees from operating such a business, full-time or part-time, resulting in a six-figure or "doctors' income" from just one or two projects per month. The price for training and association is $12,900 payable by certified check at the beginning of the training session.

They lament that they lose money on the $12,900 fee they collect, but that they will make a profit participating with you on joint ventures, described as larger consulting projects, which you can work together on and split a large consulting fee.

The promoters provide you with promotional literature, a videotape and a reference list which they encourage you to phone before making a purchase decision. They say these references are typical affiliates who have paid for and attended the training session, are now operating their own consulting businesses, are earning high incomes from consulting fees and are willing to share their success stories with prospective purchasers such as yourself without compensation.

They also say that you can easily attract clients and that you need no business, medical, or other specialized background or experience in order to succeed as an affiliate.

After taking the course you will find it hard to even generate any revenue let alone recoup the $12,900 fee. They do not work with you on joint ventures or split large consulting fees and it will turn out to be their spouses, shills or singers, not actual purchasers who gave you such glowing references.

Quick, Call a Doctor!

03/03 - California - Three people were sentenced in federal court in connection with a purported "work at home" telemarketing scheme that bilked thousands of people out of about $4.4 million.

Louis Ramirez III, 27, and Daniel Eugene Carr, 35, were each sentenced to 41 months and ordered to pay $1.7 million in restitution. Marcel Travers, 42, was sentenced to four years and to repay $2.3 million.

Deborah Karen Leicht, 52, Jason Robert Wilkey, 30, Patrick Donald Wire, 45, and Joseph Randy Etheridge, 38, are set for sentencing shortly. Bryan D'Antonio, 36, is serving a four-year sentence and has been ordered to repay $2.6 million.

The eight people were employees of a boiler-room operation called Data Medical Capital, Data-Jed or Medco which solicited victims through ads in classified newspaper sections across the United States from July 1998 until it was closed on Oct. 1, 1999.

When victims called the toll-free number, Medco telemarketers told them that, for a fee of about $400, they would receive computer software, instructions, technical support and, most importantly, the names of doctors interested in hiring someone to process medical bills electronically.

Victims were told to act quickly, because the company had a limited number of positions available in any one area.

Medco sent software, instructions and a generic list of doctors - not a list of interested prospects.

No "technical support" was provided, and people who tried to enter the business did not learn that they would have to spend more money to actually start processing bills.

Ramirez and Travers were convicted of mail and wire fraud after a two week trial. The other defendants pleaded guilty to two counts of fraud each.

Federal Trade Commission v. Electronic Medical Billing, Inc., et al.
The Federal Trade Commission announced the settlement of this matter. The settlement bars the defendants from selling any work-at-home business opportunity and requires payment of $50,000 for consumer redress. The complaint in this matter alleged that the defendants used deceptive means to market and sell medical billing work-at-home business opportunities to consumers. This case was originally filed as part of "Operation Dialing for Deception."

Federal Trade Commission v. Healthcare Claims Network, Inc., et al.
The Federal Trade Commission announced the settlement of this matter. The settlement bans the defendants from promoting or selling work-at-home business opportunities. The settlement also requires one defendant to pay $10,000 and prohibits both defendants from making any deceptive claims in connection with the sale of any goods or services. This case was originally filed as part of "Project Busted Opportunity."

Federal Trade Commission v. Physicians Healthcare Development, Inc., et al.
The Federal Trade Commission announced the settlement of this matter. The complaint in this matter alleged that the defendants deceptively pitched a work-at-home medical billing opportunity to consumers. The settlement order bars the defendants from selling any business venture, employment opportunity, or work-at-home opportunity. It also requires the defendants to provide the FTC with approximately $65,000 in frozen assets and it requires the defendant to post a bond before engaging in telemarketing activities in the future. The order further requires the defendants to cease all collection efforts and return any uncashed checks they collected to consumers. This case was filed as part of "Dialing for Deception."