It took the Federal Trade Commission to stop these alleged fraudfeasors and seize their bank accounts. Even though FTC is deeply flawed, it responded as we would have hoped.
We've grown to expect little from estimable Florida State Attorney General PAMELA JO BONDI, an unjust steward under consideration to be U.S. Attorney General after TRUMPs firing of JEFFERSON BEAUREGARD SESSIONS, III.
TRUMP loves BONDI and BONDI loves TRUMP. He bribed her with a $25,000 campaign contribution from a putative nonprofit group and she dropped any notion of investigating his fraudulent TRUMP UNIVERSITY, which settled for $25,000,000 with other litigants more protective of peoples' rights than the State of Flori-DUH.
Meanwhile, Flori-DUHis stuck with another four years of desuetude of consumer protection laws, as voters elected yet another Republican State Attorney General.
Here's Robert Pear's article from The New York Times and an article from the Sun Sentinel:
Federal Authorities Shut Down Sales of ‘Ruinous’ Health Insurance Plans
By Robert Pear
WASHINGTON — Federal authorities have shut down a network of Florida companies that they say used aggressive, deceptive tactics to sell skimpy health insurance products that skirt requirements of the Affordable Care Act and left tens of thousands of people around the country with unpaid medical bills.
“There is good cause to believe” that the Florida companies have sold shoddy coverage by falsely claiming that such policies were comprehensive health insurance or qualified health plans under the Affordable Care Act, Judge Darrin P. Gayles of the Federal District Court in Miami said in a temporary restraining order issued last week at the request of the Federal Trade Commission.
Telemarketers lured consumers through websites offering Trumpcare and Obamacare, using logos of well-known insurers to make the coverage appear credible, the trade commission said.
The commission filed a lawsuit against Simple Health Plans and its chief executive, Steven J. Dorfman, and five other entities in a “common enterprise,” saying they had misled consumers to believe they were buying comprehensive insurance that would cover pre-existing medical conditions, prescription drugs, doctors’ services and hospital care.
Among the products offered through Simple Health and its websites were “short term” health insurance plans like those promoted by President Trump as an alternative to the Affordable Care Act.
Judge Gayles froze the assets of Simple Health and its affiliates and appointed a receiver to take control of the companies. He said the companies appeared to have made “false and misleading statements,” marketing “limited benefit plans” and membership in medical discount programs as if they were major medical coverage. He will hold a hearing next week on whether to extend his order by issuing an injunction.
The trade commission said the financial consequences of the misrepresentations “have been ruinous for consumers, many of whom do not realize” the limits of the coverage until they incur substantial medical expenses.
The commission described Mr. Dorfman as “the architect of this scam” and said he had “siphoned millions of dollars of proceeds from defrauded consumers to pay for private jet travel, gambling sprees in Las Vegas, the rent for his oceanfront condominium, luxury automobiles, over $1 million in jewelry, and even the nearly $300,000 cost of his recent wedding at the St. Regis Hotel in Miami.”
The luxury vehicles, it said, included a Rolls-Royce Wraith and a Lamborghini Aventador.
Ryan D. O’Quinn, a lawyer for Mr. Dorfman, said on Monday that his client “vigorously denies the allegations of misconduct made by the Federal Trade Commission, and he looks forward to having an opportunity to defend himself in the appropriate forum.”
The members of the trade commission — three Republicans and two Democrats — voted unanimously to take action against the Florida operation, which the commission described as “a classic bait-and-switch scheme designed to trick consumers into paying hundreds of dollars for substandard products under the pretense that they are actually receiving comprehensive health insurance.”
James Quiggle, a spokesman for the Coalition Against Insurance Fraud, a nonprofit alliance of insurance companies and consumer groups, said on Monday: “This latest scam is a classic case of empty promises. It’s reminiscent of fake health plans that were marketed nationally in the early 2000s. How many more scams like this are operating just beneath the radar of federal and state regulators?”
The commission said it had learned about the sales tactics of Simple Health from consumer complaints, undercover telephone calls made by F.T.C. investigators, and bank and phone records of the Florida companies.
Those records indicate that “boiler rooms” of Simple Health and its affiliates handled 62 million calls with consumers, as part of a scheme that generated “well over $150 million in revenue” from January 2016 to April 2018, the commission said in court papers.
The commission said the people behind Simple Health enticed consumers through websites such as trumpcarequotes.com, premiumhealthquotes.com and obamacare-plans.com.
In marketing materials and on websites, the commission said, the Florida companies “falsely claim to be affiliated with AARP” and with legitimate insurers, including Blue Cross and Blue Shield plans.
On a Simple Health website, Mr. Dorfman is identified as the founder and chief executive of the company. The site says he “positioned Simple Health to capitalize” on the Affordable Care Act.
If consumers ask for written information before buying a Simple Health plan, “telemarketers often refuse to provide it, stating that they either are not allowed to provide such information or are not capable of providing it,” the commission said.
The telemarketers typically identify themselves as insurance agents licensed in the consumer’s state, but in many cases “are not, in fact, properly licensed insurance agents,” the complaint said.
The trade commission told Judge Gayles that he needed to take swift action because the annual open enrollment period under the Affordable Care Act began on Thursday.
Michael I. Goldberg, the court-appointed receiver, said he “shut down the business operations” of Simple Health and related companies on Thursday, within hours of being named.
The commission had urged Judge Gayles to freeze the companies’ assets so the funds could be used to provide restitution to victims of the scheme. The defendants have bank accounts in Panama and the Dominican Republic “to which they could easily transfer funds in the absence of an asset freeze,” the commission said.
In its complaint, the commission said that Simple Health had recruited employees with advertisements that showed a cigar-smoking man tossing a wad of cash. “You will have money thrown at you” during open enrollment, the ads tell prospective employees, offering up to $4,000 a week.
A version of this article appears in print on , on Page B3 of the New York edition with the headline: Federal Authorities Shut Down Seller of ‘Ruinous’ Health Insurance Plans. Order Reprints | Today’s Paper | Subscribe
- From Sun Sentinel:
Owner of Hollywood-based 'sham' health insurer siphoned millions of dollars, FTC says
Newly released documents in the Federal Trade Commission’s effort to permanently close what it called a “sham” health insurance marketer assert that the company’s owner diverted millions of dollars from the operation for his own use.
The Hollywood-based operation, conducted under numerous names including Simple Health Plans LLC, is owned by Steven J. Dorfman, according to the FTC.
“Deceived consumers are effectively left uninsured and subjected to nearly unlimited financial exposure,” the commission said in its motion for a temporary restraining order against the company, newly posted on the FTC’s website.
The motion alleges that the operation has caused “well over $150 million in consumer injury.”
Meanwhile, Dorfman, identified by the FTC as “the architect of this scam,” siphoned “millions of dollars of proceeds from defrauded consumers on “lavish spending for himself,” including:
More than $1 million in jewelry
Luxury vehicles, including a Rolls-Royce Wraith and Lamborghini Aventador
Cash transfers of $368,000 to The Cosmopolitan of Las Vegas Hotel and Casino
A $57,000 tab incurred at one nightclub in a single evening, part of $341,000 in total nightclub spending
Rent on his $1.4 million oceanfront condominium
Nearly $300,000 for his recent wedding at The St. Regis Bal Harbour Resort in Miami, “for which Dorfman spent $133,000 on flowers alone.”
Ryan D. O’Quinn of the law firm DLA Piper LLP, based in New York and Miami, identified himself by email as Dorfman’s counsel and said, “Mr. Dorfman vigorously denies the allegations of misconduct made by the Federal Trade Commission, and he looks forward to having an opportunity to defend himself in the appropriate forum.”
A U.S. District Court in Miami last week approved the FTC’s motion for a temporary restraining order that shut the company down and transferred its assets to a court-appointed receiver. The company has two weeks following Wednesday’s order to tell the court why the FTC should not retain control of the company until the civil case is concluded. The FTC is seeking to permanently shut down the company and repay its customers.
The company’s products were advertised primarily through lead-generation websites typically found in searches for health insurance, the motion states. The websites “deceptively claim that consumers who submit their contact information will receive multiple quotes for comprehensive health insurance from ‘the Nation’s Leading Carriers’ and that these policies will include benefits such as prescription drug coverage, access to doctors and specialists as well as hospital and emergency care — all for ‘low co-pays’ and ‘affordable premiums,’” the brief states.
One website, healthinsurance4me.com, included a “mock breaking news video” announcing that the defendants offer “top quality health insurance for as much as 66 percent less than Obamacare,” the brief states. The video claimed the companies’ policies included “low co-pays and cover items like doctor visits, access to specialists, prescription benefits, coverage for hospitalization and emergency room visits.”
The announcer closes “with this flagrantly deceptive guarantee: ‘This is not a discount health care; it’s real insurance,’” the brief states.
Another site piggy-backed on President Donald Trump’s encouragement of short-term, lower-cost health insurance policies as alternatives to Affordable Care Act policies. The site was called trumpcarequotes.com and prominently featured the Anthem Blue Cross logo along with false claims to be affiliated with Blue Cross and other established insurers, the brief said.
Reading deceptive scripts, telemarketers working for the operation offer “health insurance” for a one-time enrollment fee of up to $175 as well as an ongoing monthly fee of up to $700 or more, the brief states.
Insurance-related terms like “PPOs,” “copay,” “premium” and “deductible” are used that simply do not apply to defendants’ products, the FTC said.
In phone calls with FTC agents posing as customers, telemarketers falsely said their products would cover preexisting conditions, promising one his “medical needs would be covered 100 percent,” the brief states.
But in reality, the FTC said, “the plans exclude coverage of preexisting conditions for a year and provide no coverage for prescription medications.”
Examples of misled consumers cited in the brief included a woman paying $283 a month for what she thought was an ACA-qualified plan, then bringing her “insurance” card to the pharmacy to learn it entitled her to a discount of just $3. Another woman who enrolled in a similarly priced plan tried to make an appointment with her doctor, only to find out her plan covered none of the costs of a visit.
The financial consequences of the company’s misrepresentations have been “ruinous” for consumers, the FTC said. “Consumers often complained about receiving thousands or even tens of thousands of dollars in unreimbursed medical bills, especially for emergency room visits and surgical procedures.”
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