Los Angeles, California – LAWFUEL – IRS News – Law Jobs – This afternoon, U.S. District Judge R. Gary Klausner sentenced the former General Manager of Medicor LLC, to serve time in prison for his role in a medical billing software telemarketing scheme.
Andrew Rubin, who pleaded guilty last year to Engaging in Monetary Transactions in Property Derived from Specified Unlawful Activity and other charges related to the scheme, was ordered by Judge Klausner to serve 36 months in prison, followed by a term of 3 years of supervised release.
Rubin was the General Manager of Medicor LLC, a marketing company based in Van Nuys, California. Rubin’s guilty plea was a result of his participation, along with his brother Matthew Rubin, in directing employees of Medicor to deceive prospective customers into believing that, for a fee, they could set up a successful home-based medical billing business.
In his plea agreement, Rubin admitted that he knew that Medicor’s telemarketers would mislead customers by telling them that they would receive a list of doctors who needed medical billing services, and that the customer did not have to do any work to obtain doctors for whom they could perform billing services. Further, Medicor’s telemarketers told customers that they could make $5 to $7 per claim processed, which translated into an immediate earnings of $20 to $45 per hour, and they told customers that Medicor made it’s money from receiving a portion of a processing fee for each medical claim submitted.
Rubin admitted that he and his brother, Matthew Rubin, knew that these, and other, representations made by Medicor’s telemarketers to customers were false. Among other things, Rubin admitted that Medicor made its profits from the sale of the medical billing software to customers and not from the processing of medical claims.
Rubin had agreed with Matthew Rubin to split the profits of Medicor 40% to 60%, respectively. To attract customers, Medicor placed advertisements in the help wanted section of numerous newspapers and publications. Generally, the advertisements stated that a person could potentially earn $20-$40 an hour from home by helping doctors submit medical bills to insurance companies. From July 1999 to March 2001, Medicor sold over 30,000 Kwic-Claim Medical Billing Software packages for approximately $400 each.
When Rubin and his brother learned that their business was under investigation, Rubin funneled a portion of his Medicor profits, totaling $299,786.00, to a bank account held in the name of S & M Trust, an account that his brother Matthew Rubin was the beneficiary of.
Judge Klausner ordered Rubin to begin serving his sentence immediately.
This case is the result of a joint investigation by IRS-Criminal Investigation and the United States Postal Inspection Service, which followed a civil action initiated by the Federal Trade Commission.