The Federal Trade Commission today announced it has secured a stipulated final court judgment and order against several California-based defendants who allegedly pitched bogus medical billing opportunities to thousands of consumers nationwide. In addition to barring the defendants from selling any work-at-home business opportunity, the judgment requires the defendants to pay $50,000 for consumer redress. The court action announced today settles charges brought against the defendants through 2002's "Operation Dialing for Deception" law enforcement sweep, which targeted work-at-home and other inbound telemarketing scams throughout the country. A court-appointed receiver has shut down the businesses of the defendants charged in the complaint.
Today's action ends the FTC's litigation against Electronic Medical Billing, Inc., a Nevada corporation doing business as EMB Marketing and EMB Inc.; Esoft Caducei, Inc., a Nevada corporation; John C. Moore, individually and as an officer of Electronic Medical Billing, Inc. and Esoft Caducei, Inc.; and David L. Miller, individually and as an officer of Electronic Medical Billing, Inc.
"These promoters made promises about earnings and marketability that sounded too good to be true - and they were," said Howard Beales, Director of the FTC's Bureau of Consumer Protection. "The reality is that few consumers who pay for medical billing opportunities find clients or make any money, let alone earn the promised substantial income."
According to the Commission's complaint, filed in April 2002, the defendants used deceptive means to market and sell medical billing work-at-home business opportunities to consumers, promising annual income of between $25,000 and $50,000. According to the FTC, consumers, who paid $325 each after responding to either a classified or Internet ad, were unable to earn money from the program.
The FTC contends that, between late 1999 and the summer of 2002, the defendants falsely promised consumers they would provide them with everything necessary to perform medical billing from home, including a list of doctors in need of home-based medical billers, training, and the software necessary to perform the work. However, consumers who paid the fee allegedly discovered that the doctors on the lists provided either were impossible to reach or did not need help with medical billing.
The stipulated final judgment and order permanently bars the defendants from selling any "work-at-home opportunity," with that term defined as "any program, plan, product, or service represented to enable or assist a participant or purchaser to earn money while working at home." This injunctive relief is further strengthened by the order's permanent prohibition on misrepresentations made in connection with the sale of any item, product, good, service, or business venture, specifically including misrepresentations of any material fact related to the earnings potential of a business venture and the conditions of the company's refund or guarantee policy.
In addition, the order requires that the defendants pay $50,000 in consumer redress - an amount that is consistent with their ability to pay. This fund will provide refunds to consumers, in addition to $96,000 in refunds paid by the receiver from the corporate defendants' assets. The Commission retains the right to reopen the case and seek additional consumer redress if the Commission finds that the defendants have misrepresented their financial condition.
Finally, the stipulated judgment and order prohibits the defendants from disseminating their customer lists, vacates the appointment of the receiver when appropriate, requires the defendants to monitor compliance with the order by their sales personnel and contains standard monitoring and record-keeping conditions to ensure compliance with all terms.
The Commission vote to approve the order was 5-0. It was filed in the U.S. District Court for the Central District of California, Southern Division on April 17, 2003, signed by the judge on April 18, 2003, and entered on April 22, 2003.
(FTC File No. X020046;Civ. No. SACV02-368 AHS (ANX))