Sad

I know several people who have legit businesses, make lotsa money, pay their taxes and live large, no worries. I have also known people (some of which I worked for) who wouldn't under any circumstances run a legit business. I guess it's all about getting rich quick and burning as many people as you can. The problem is that a small percentage of these crooks get caught.

DaveB

> 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