The Federal Trade Commission wants to shut down a scheme that preys on seniors across the country by offering discounts on prescription drugs and pretending to be affiliated with Medicare, Social Security, or medical insurance providers.
In a complaint filed against the operators of the scam in the United States and Canada, the FTC alleges that U.S. seniors responding to deceptive telephone calls were often convinced to turn over their bank account numbers.
The scheme’s operators used that information to debit money from victims’ accounts.
“This scam, which targeted and deceived our nation’s seniors, is as cynical and wanton as they come,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “We look forward to bringing this operation to a halt and working to get relief for the victims.”
According to the FTC’s complaint, the telemarketing calls pitched a prescription drug discount card that would provide substantially discounted, or even free prescription drugs.
Moreover, many seniors were led to believe they had to purchase the card to continue receiving their Medicare, Social Security, or medical insurance benefits.
In fact, the prescription drug discount cards the defendants provided to consumers are available for free by calling a toll-free number or visiting a website. But the cards generally do not provide any discounts to consumers who already have insurance either through a government program or a private insurer.
The scam was run from both sides of the border. The fraudsters contacted consumers from a telemarketing boiler room in Montreal. The U.S. side of the operation then used the bank account information consumers provided in the calls to take approximately $300 from consumers’ bank accounts using a “demand draft.”
Not all consumers who paid even received the purported discount card – some victims received nothing at all for their money.
The scam operators are charged with violating Section 5 of the FTC Act by deceptively presenting themselves as government or insurance representatives, and by telling consumers that the discount plans they were selling could provide substantial discounts on prescription drugs.
In addition, the defendants are charged with violating the FTC’s Telemarketing Sales Rule for their deceptive acts and for calling consumers whose numbers were on the National Do Not Call Registry.
A federal judge in the U.S. District Court for the Northern District of Illinois issued a temporary restraining order halting the defendants’ deceptive scheme and freezing their assets.
The U.S.-based defendants in the case include: AFD Advisors, LLC, of Wisconsin, which also does business as AFD Medical Advisors; AMG Associates, LLC, of Delaware, which also does business as AMG Medical and AMG Medical Associates; Aaron F. Dupont, individually and as an officer of AFD Advisors and AMG Associates; CAL Consulting, LLC, of Georgia, which also does business as Clinacall; Charles A. Lamborn, III, individually and as an officer of CAL Consulting; and Park 295 Corp, of New York.
The Canadian-based defendants are: 9262-2182 Quebec Inc; Stephanie Scebba, individually and as an officer of 9262-2182 Quebec Inc.; 9210-7838 Quebec Inc; and Fawaz Sebal, also known as Frank Sebag, individually and as an officer of 9210-7838 Quebec Inc.