KABOOM! FTC Says ‘Medical Discount’ Hucksters Used Images Of Obama, Words From Congressional Speech To Fleece Customers; Receiver Already Has Seized Website; Feds, 24 States Launch Fraud Crackdown

The FTC said today that images of President Obama were used to help a bogus "medical discount plan" trick customers into believing they were purchasing health insurance.

EDITOR’S NOTE: Some readers will recall that one of the Secret Service’s allegations in the AdSurfDaily Ponzi case is that pitchmen tried to sanitize the scheme by making false claims that ASD President Andy Bowdoin had received an award for business acumen from President George W. Bush and Vice President Dick Cheney.

Others will recall that Mantria Corp. — implicated in a Ponzi scheme by the SEC — used images of former President Clinton and other world figures to sanitize a “green” energy scheme.

Now comes word that the FTC has brought a fraud case against a company amid allegations it used images of President Obama, the White House, the U.S. Capitol and lawmakers to sanitize a bogus “medical discount plan”  marketed as health insurance.

Here, now, the story . . .

A company that used images of President Obama and the White House — along with logos that resembled the logos of government agencies — has been charged by the Federal Trade Commission with marketing a bogus “medical discount plan” as healthcare insurance.

At least two other firms and their operators and associates have been charged separately with running discount scams, and a nationwide crackdown involving at least 24 states is under way. The FTC has dubbed the sweep “Operation Health Care Hustle.”

“With so many Americans struggling to deal with the costs of health care, these medical discount benefit plans sound appealing because they masquerade as health insurance,” said David Vladeck, director of the FTC’s Bureau of Consumer Protection. “But they are not insurance. They don’t offer the benefits of health insurance, and victims don’t know they’ve been ripped off until after they’ve tried to use the service and paid their bill.”

The fraud case against Health Care One LLC and associated firms illustrates the dangers not only of promoting scams, but also of of trying to recruit customers into them by implying a product or service is endorsed by the President, members of Congress or the government in general.

Indeed, Health Care One’s website already has been seized by a court-appointed receiver — and content that once appeared on the site and affiliated sites has vanished. In a remarkable news presentation today, the FTC released a video pitch used by the company.

Healthcare One LLC used images of the White House while scamming customers, the FTC said.

The pitch features video of Obama addressing Congress about healthcare issues on Sept. 9, 2009. Heathcare One makes Obama the star of the video, showcasing remarks in which the President stated, “No one should go broke because they get sick.” Vice President Joe Biden and House Speaker Nancy Pelosi are in the background of the video.

The video then cuts away to a passage in which Obama said, “That is heartbreaking. It is wrong, and no one should be treated that way in the United States of America.”

The video then quickly cuts away again to an image of the U.S. Capitol. Official-looking logos appear on the screen, along with the words “REGISTRATION NOW OPEN[:] NATIONAL HEALTHCARE DISCOUNT PROGRAM[:] FOR ALL UNINSURED AMERICANS.”

A narrator simultaneously declares that “registration is now open for a national healthcare discount program.” The narrator — as an image of the White House replaces an image of the Capitol — goes on to say that “Citizens4Healthcare is now authorized to offer you savings of 20 to 60 percent on doctors, hospitals, prescription drugs and more.”

As the video proceeds, the narrator declares that “there are daily registration limits for this program, so call now for immediate acceptance . . .”

Healthcare One was specifically charged with claiming it sold health insurance when it did not — and of misleading the public into thinking it was affiliated with the federal government.

“Defendants’ advertisements lead consumers to reasonably believe that Health Care One’s program is affiliated with, or endorsed or sponsored by, the federal government,” the FTC said.

“It is not,” the agency said flatly in court filings, accusing the company of selling a scam.

Read more about “Operation Health Care Hustle.” (Look in the upper-right corner of the screen when you land on the FTC page. You”ll find links to other cases announced today — and also a link to the video cited above.)

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