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FIB - Scams 101 - Ye Olde Archives
Posted By: Bill Carton - the Roadie <wcarton@flash.net>
Monday, 31 July 2006, at 12:44 p.m.
http://www.ftc.gov/opa/2006/07/illegalbus.htm
For Release: July 31, 2006
FTC Stops Supposed Preacher, Family, Companies Selling Illegal Business
Opportunity
Business Being Peddled Would Violate State and Federal Laws
A U.S. District Court has barred a purported former preacher, his two sons,
and his companies from selling a healthcare business opportunity promising
consumers millions of dollars if they participated in an alleged network of
Medicaid providers. In fact, according to the Federal Trade Commission
complaint, the defendants' business model would have required participants
to break numerous state and federal laws.
Using "healthcare conferences" at hotels and convention centers across the
US, the defendants promised consumers that they would receive "guaranteed"
Medicaid patients and would receive help from the lawyers, doctors, and
other professionals on their staff in establishing their healthcare
businesses. The FTC charged that the defendants misrepresented the
assistance they would provide and that participants could legally earn money
from the business, and did not provide participants with the required
disclosure statement and earnings disclosures for a franchise. A U.S.
District Court has granted a temporary restraining order, prohibiting the
defendants' from continuing their deceptive business practices, freezing
their assets, and appointing a receiver.
The operation targeted church-going audiences, advertising their upcoming
conferences on Christian radio and television networks. Their traveling road
show visited at least 18 different US cities, drawing crowds of up to 1000
attendees, with many persons paying a $65 registration fee to attend. The
defendants held "conferences" in Atlanta, Baltimore, Durham, Chicago,
Dallas-Ft. Worth, Memphis, Jacksonville, Nashville, Macon, Columbus,
Georgia, St. Louis, Philadelphia, Jackson, Mississippi, Norfolk, Richmond,
and Austin.
At the conferences, individual defendant Jeffrey W. McLain would mix
references to his alleged career as a preacher with descriptions of the huge
rewards flowing from his business opportunity. The defendants claimed that
they were millionaires and multimillionaires and that for a $2,495
investment, participants would have an opportunity to become as rich as they
were. The defendants also ran a telemarketing operation in Marietta, Georgia
through which they sold their business opportunity.
The defendants instructed participants to incorporate two companies - a
non-profit organization, such as a church, and a for-profit healthcare
company which would provide services to Medicaid-eligible clients. The
defendants stressed to the participants that the ownership of the non-profit
corporation needed to be untraceable to the healthcare company. The
non-profit would collect donations, such as clothes and furniture, and
distribute it to those in need, provided they gave the non-profit their
Medicaid information. The participants were then supposed to funnel the
Medicaid information to the for-profit medical services company that
supplies its products or services to the recipient and bills Medicaid. The
participant also could sell the Medicaid information to other providers and
receive a referral fee between $100 and $500.
The sales pitch promised that lawyers, doctors, and other professionals
would be available to guide participants through the incorporation and
licensing of their two companies through the start-up phase, and would
remain available to answer questions after the business was running.
According to the FTC's complaint, the defendants failed to disclose that
their business model would expose participants to either criminal or civil
monetary penalties, as it would violate numerous federal and state laws. The
complaint also alleges that they misrepresent that purchasers could legally
make substantial earnings, and that they will receive assistance in
establishing and managing their business venture. Finally, the FTC charged
that the defendants failed to provide purchasers with the required
disclosure statement and made unsubstantiated earnings claims.
The FTC received assistance in the case from the United States Postal
Inspection Service in Atlanta, the Georgia Bureau of Investigation, and
investigators from several different offices of the Attorney General,
including their Medicaid fraud control units, from Maryland, Florida, Texas,
Mississippi, Georgia, Pennsylvania, Tennessee, and Virginia.
The court entered an ex parte temporary restraining order against the
defendants: Jeffrey Wayne McLain, also known as J.W. McLain; Alexander
McLain; Victor McLain; Prophet 3H, LLC; Prophet 3H, Inc.; Georgia Home
Health Care License and Certification Institute, Inc., doing business as
GHLCI; Healthcare License and Certification Institute, Inc., doing business
as HSLCI and HSLCC; and M7 Holdings, LLC. The FTC is seeking a permanent end
to their deceptive business practices and redress for their victims.
The Commission vote to authorize staff to file the complaint was 5-0. The
complaint was filed in the U.S. District Court for the Northern District of
Georgia on July 18, 2006. The temporary restraining order was granted on the
same day. A preliminary injunction hearing is scheduled August 1.
NOTE: The Commission files a complaint when it has "reason to believe" that
the law has been or is being violated, and it appears to the Commission that
a proceeding is in the public interest. The complaint is not a finding or
ruling that the defendant has actually violated the law. The case will be
decided by the court.
Copies of the complaint are available from the FTC's Web site at
http://www.ftc.gov and also from the FTC's Consumer Response Center, Room
130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works
for the consumer to prevent fraudulent, deceptive, and unfair business
practices in the marketplace and to provide information to help consumers
spot, stop, and avoid them. To file a complaint in English or Spanish
(bilingual counselors are available to take complaints), or to get free
information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP
(1-877-382-4357), or use the complaint form at
http://www.ftc.gov/ftc/complaint.htm. The FTC enters Internet,
telemarketing, identity theft, and other fraud-related complaints into
Consumer Sentinel, a secure, online database available to thousands of civil
and criminal law enforcement agencies in the U.S. and abroad.
MEDIA CONTACT:
Jacqueline Dizdul,
Office of Public Affairs
202-326-2472
STAFF CONTACT:
David R. Spiegel,
Bureau of Consumer Protection
202-326-3281
(http://www.ftc.gov/opa/2006/07/illegalbus.htm)
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PLEASE READ THIS LEGAL NOTICE CAREFULLY BEFORE YOU FILE A LAWSUIT OR EVEN WASTE TIME THINKING ABOUT IT. It has been done before, but never successfully. In fact, the last dodobird who tried it ended up being ordered to pay more than $77,000 in attorney fees ($65,000+ to my attorneys and $12,000+ to my co-defendant's legal advisor).
If your attorney is worth his salt, he's going to tell you that the expense of filing a lawsuit you can't win is a whole lot worse than any "damages" resulting from messages posted on this insignificant little chunk of cyberspace. NEWS FLASH: I didn't just climb down off that ol' turnip truck yesterday. I'm well aware that expressing a negative opinion, relating one's personal experience, and restating provable facts are all legal in this country and do not constitute libel, slander, or defamation -- so you don't want to play games with me, and you sure don't want to start something you aren't prepared to finish. I don't take threats lightly, and I don't accept bribes (or did you call it a "mutually-beneficial arrangement"?). I'll turn you in faster than you can yell, "ARREST ME, I'M SCUM!!" Do yourself a favor and turn your legal team loose in greener pastures. Although we may, from time to time, monitor or review discussions, postings and the like on the Friends In Business (Scams 101) Message Board, we are under no obligation to do so. We are not responsible or liable for any claim arising from the content of any such discussions or postings or for any error, defamation, libel, slander, omission, falsehood, obscenity, pornography, profanity, danger, or inaccuracy contained in any information contained within such locations on the Site. You are prohibited from posting or transmitting any unlawful, threatening, libelous, defamatory, obscene, scandalous, inflammatory, pornographic, or profane materials or any material that could constitute or encourage conduct that would be considered a criminal offense, give rise to civil liability, or otherwise violate any law. You are likewise prohibited from posting any false claims against any company or individual. We will fully cooperate with any law enforcement authorities or court order requesting or directing us to disclose the identity of anyone posting any such information or materials. By posting messages and/or content on the Friends In Business (Scams 101) Message Board, you give permission for Lesley Fountain/Friends In Business/Shoestring Success Publications to display, distribute and use the posting and content for publication, advertising, promotion, excerption or example. You grant Lesley Fountain/Friends In Business/Shoestring Success Publications complete, perpetual, but non-exclusive rights to use, archive, reproduce, adapt, modify, distribute, sub-license, repurpose, rework, compile, or offer for sale or resale the messages, postings or content appearing on this site in whole or in part, throughout the world and universe, on a royalty-free basis without remuneration. If you cannot accept or agree with the terms of service for this website and discussion board, you are advised not to post on this board. In closing, I would like to remind you once again that it is still legal, in this great country of ours, to express a PERSONAL OPINION, as long as it is presented as opinion and not as fact. And finally, all you scammers out there will do well to remember that TRUTH IS AN ABSOLUTE DEFENSE against charges of libel, defamation, and slander... so if you're operating just a hop, skip, and jump ahead of the law, you might want to think twice before doing anything stupid... (AND SHAME ON YOU!!). |