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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 in traditional venues 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. On March 8, the FTC
amended its complaint to add Matthew Rubin, Maven Holdings, Inc., and S&M Trust as
defendants.
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.
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