DENVER (Legal Newsline) - Colorado Attorney General John Suthers announced a settlement on Monday with an Internet-based affiliate company and its owner to resolve allegations of fraud.
Consolidated Medical Services LLC and Joseph Benedetto allegedly recruited thousands of individuals, many of whom were elderly, to market medical benefits programs advertised as valid traditional health insurance substitutes.
The company allegedly charged its recruits between $35 to $345, as well as a monthly maintenance and hosting fee of $29.95, to sell the programs online. Many recruits also allegedly paid thousands of dollars for additional marketing services and products.
"People were enticed to invest in Benedetto's scheme and he collected hundreds and often thousands of dollars per person, all the while knowing the individual had virtually zero chance of recouping their investment," Suthers said.
"The health benefits plans themselves were fraudulent, frequently failing to pay patients' claims as promised and for that and more, we went after him."
Between 2008-2011, Consolidated Medical Services allegedly recruited 12,800 affiliates, less than three percent of whom made any money in the program. Most of the three percent paid more money than they earned, Suthers claimed.
Benedetto has returned more than $100,000 to the affiliates and has shut down the CMS affiliate marketing program.