UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION

FEDERAL TRADE COMMISSION, Plaintiff,

v.

MEDICAL-BILLING.COM, INC., a corporation,
d/b/a Professional Management Consultants, and
MICHELE GRAHAM, Defendants.

Civil No.

COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF

Plaintiff, the Federal Trade Commission ("FTC" or "Commission"), for its complaint alleges:

1. The FTC brings this action under Sections 5(a) and 13(b) of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C.  45(a) and 53(b), to obtain permanent injunctive relief, rescission or reformation of contracts, restitution, disgorgement, and other equitable relief for defendants' deceptive acts or practices in violation of Section 5(a) of the FTC Act, 15 U.S.C. 45(a).

JURISDICTION AND VENUE

2. Subject matter jurisdiction is conferred upon this Court by 15 U.S.C.  45(a), 53(b), and 28 U.S.C.  1331, 1337(a), and 1345.

3. Venue in the Northern District of Texas is proper under 15 U.S.C.  53(b) and 28 U.S.C.  1391(b) and (c).

PLAINTIFF

4. Plaintiff Federal Trade Commission is an independent agency of the United States Government created by statute. 15 U.S.C.  41 et seq. The Commission enforces Section 5(a) of the FTC Act, 15 U.S.C.  45(a), which prohibits unfair or deceptive acts or practices in or affecting commerce. The Commission may initiate federal district court proceedings by its own attorneys to enjoin violations of the FTC Act and to secure such equitable relief as may be appropriate in each case, including restitution for injured consumers. 15 U.S.C.  53(b).

DEFENDANTS

5. Defendant Medical-Billing.Com, Inc. ("Medical-Billing") is a Texas corporation with its principal place of business at 1000 East Beltline, Suite 104, Carrollton, TX 75006. Medical-Billing conducts business under the name Professional Management Consultants. Medical-Billing promotes and sells its marketing services to consumers attempting to start or expand their work-at-home medical billing businesses. Medical-Billing transacts or has transacted business in the Northern District of Texas.

6. Defendant Michele Graham is the owner and president of Medical-Billing. At all times material to this complaint, acting alone or in concert with others, she has formulated, directed, controlled, or participated in the acts and practices of the corporate defendant, including the acts and practices set forth in this complaint. Defendant Michele Graham transacts or has transacted business in the Northern District of Texas.

COMMERCE

7. At all times relevant to this complaint, defendants have maintained a substantial course of business in the offering for sale and sale of medical billing marketing services, in or affecting commerce, as "commerce" is defined in Section 4 of the FTC Act, 15 U.S.C.  44.

DEFENDANTS' BUSINESS PRACTICES

8. Since at least December 1999, under the assumed name Professional Management Consultants, defendants have contracted with consumers throughout the United States to recruit healthcare professionals for whom the consumers will provide medical billing services. Defendants have promoted these medical billing marketing services to consumers through a variety of means, including direct mail, facsimile, and the Internet.

9. In their written marketing and promotional materials, defendants offer to locate health care professionals who will contract with consumers to process the professionals' medical billing. Defendants claim that the accounts they locate for consumers will generate a substantial income for the consumers' work-at-home medical billing businesses. Defendants claim that this income is guaranteed and that their offer is risk free. Defendants' promotional materials urge consumers to call defendants' toll-free telephone number for more information.

10. Defendants also advertise their medical billing marketing services on their Internet web site, www.medical-billing.com. The web site claims that defendants can "jump start" consumers' medical billing businesses by marketing the consumers' services to health care professionals who are interested in outsourcing billing and collection activities. Defendants' web site urges consumers to contact defendants via the Internet to learn more.

11. Consumers who call defendants' toll-free telephone number or who respond through the Internet are ultimately connected to defendants, or their employees or agents, who represent that they have pre-qualified health care professionals ready to outsource the professionals' billing operations and who have asked defendants to screen qualified billing services. Defendants promote a variety of sales packages for which they charge consumers between $3,500 and $9,000. In the "Basic Package," which sells for $3,500 to $4,000, defendants promise to provide consumers with one health care professional, which will generate a minimum of $1,250 gross income per month for the consumer's medical billing business. Under the terms of the "Standard Package," which sells for $6,000, defendants promise to provide two health care professionals who will generate a minimum of $2,500 gross income per month. The "Advanced Package" is priced to consumers at $9,000, for which defendants promise to provide three to six health care professionals who will generate a minimum of $4,500 per month in gross income. All three packages come with a "100% refund guarantee."

12. Defendants generally execute contracts with consumers that (1) obligate defendants to provide one or more health care professionals who will use the consumers to process their medical claims; and (2) specifically guarantee that the health care professional(s) provided by defendants will produce a gross income for consumers of $1,250 to $4,500 per month, depending on the sales package selected by the consumer. In addition, the majority of defendants' contracts also promise a full refund to consumers if defendants fail to perform within an allotted time, usually 180 days. Consumers typically pay defendants' fee by wire transfer, credit card, or cashier's check.

13. After consumers pay defendants, they hear little or nothing from them. Few, if any, of the consumers who contract with defendants are provided health care professionals to use consumers' medical billing services. As a result, few, if any, consumers who purchase defendants' medical billing marketing services earn any income.

14. When consumers contact defendants to complain, defendants use a variety of stalling tactics to avoid paying promised refunds. Consumers who call defendants are asked to leave their names and numbers, but defendants rarely, if ever, return their calls. Consumers' numerous letters and E-mails to defendants also go unanswered for extended periods of time. In addition, defendants often claim that the consumers' written refund requests or executed release forms were lost or never received, assert that the requests must be reviewed by the Board of Directors before payment can be made, insist that the refund requests are being processed but will take a while longer, and argue that there are insufficient funds to pay refunds at the time. Ultimately, defendants rarely provide refunds to consumers who qualify for refunds under the contract. The few consumers who receive full or partial refunds do so only after enlisting the assistance of an attorney or a law enforcement agency such as a state attorney general or the Federal Trade Commission.

VIOLATIONS OF SECTION 5 OF THE FTC ACT

15. Section 5(a) of the FTC Act, 15 U.S.C.  45(a), prohibits unfair or deceptive acts and practices in or affecting commerce.

COUNT I

16. In numerous instances, in the course of offering for sale and selling their medical billing marketing services, defendants or their employees or agents have represented, expressly or by implication, that they will provide health care professionals who will use the consumers to process their medical claims.

17. In truth and in fact, in numerous instances, defendants do not provide health care professionals who use the consumers to process their medical claims.

18. Therefore, defendants' representations as set forth in Paragraph 16 are false and misleading and constitute deceptive acts or practices in violation of Section 5(a) of the FTC Act, 15 U.S.C.  45(a).

COUNT II

19. In numerous instances, in the course of offering for sale and selling their medical billing marketing services, defendants or their employees or agents have represented, expressly or by implication, that consumers who purchase defendants' medical billing marketing services will earn a specific level of earnings of $1,250 to $4,500 per month.

20. In truth and in fact, in numerous instances, consumers who purchase the defendants' medical billing marketing services do not earn the specific level of earnings represented by defendants of $1,250 to $4,500 per month.

21. Therefore, defendants' representations as set forth in Paragraph 19 are false and misleading and constitute deceptive acts or practices in violation of Section 5(a) of the FTC Act, 15 U.S.C.  45(a).

COUNT III

22. In numerous instances, in the course of offering for sale and sale of medical billing marketing services, defendants or their employees or agents have represented, expressly or by implication, that consumers can readily obtain full refunds upon request.

23. In truth and in fact, in numerous instances, consumers cannot readily obtain full refunds upon request.

24. Therefore, defendants' representations as set forth in Paragraph 22 are false and misleading and constitute deceptive acts or practices in violation of Section 5(a) of the FTC Act, 15 U.S.C.  45(a).

CONSUMER INJURY

25. Consumers in many areas of the United States have suffered substantial monetary loss as a result of defendants' unlawful acts or practices. Absent injunctive relief by this Court, defendants are likely to continue to injure consumers and harm the public interest.

THIS COURT'S POWER TO GRANT RELIEF

26. Section 13(b) of the FTC Act, 15 U.S.C.  53(b), empowers this Court to grant injunctive and other ancillary relief, including consumer redress, disgorgement and restitution, to prevent and remedy any violations of any provision of law enforced by the Commission.

27. This Court, in the exercise of its equitable jurisdiction, may award other ancillary relief to remedy injury caused by defendants' law violations.

PRAYER FOR RELIEF

WHEREFORE, plaintiff the Federal Trade Commission, pursuant to Section 13(b) of the FTC Act, 15 U.S.C.  53(b), and the Court's own equitable powers, requests that the Court:

1. Award plaintiff such preliminary injunctive and ancillary relief as may be necessary to avert the likelihood of consumer injury during the pendency of this action and to preserve the possibility of effective final relief;
 
2. Permanently enjoin defendants from violating the FTC Act as alleged herein;
 
3. Award such relief as the Court finds necessary to redress injury to consumers resulting from defendants' violations of the FTC Act, including but not limited to, rescission or reformation of contracts, restitution, the refund of monies paid, and the disgorgement of ill-gotten monies; and
 
4. Award plaintiff the costs of bringing this action, as well as such other and additional relief as the Court may determine to be just and proper.

Dated:____________

Respectfully Submitted,

WILLIAM E. KOVACIC
General Counsel

______________________________
THOMAS B. CARTER
TX Bar No. 03932300

GARY KENNEDY
OK Bar No. 4961
Attorneys for Plaintiff
Federal Trade Commission
1999 BRYAN ST., SUITE 2150
DALLAS, TX 75201
(214) 979-9372 (phone)
(214) 953-3079 (facsimile)