Advanta Medicaid LLC allegedly charged dozens of New Jersey consumers for help in establishing eligibility for Medicaid benefits but failed to deliver the services or provide a guaranteed refund, according to Attorney General Gurbir Grewal and the Division of Consumer Affairs.
Two individuals involved with the business allegedly transferred company funds to their personal accounts to cover expenses at an Atlantic City casino, high-end clothing stores and restaurants, and local private schools unaffiliated with the business.
Nissim “Sam” Aryeh and Chaim Feller are both from Ocean County.
“Families and individuals seeking assistance with Medicaid enrollment are among those who can least afford to lose thousands of dollars to fraud,” Grewal said in a statement. “Today we’re sending a clear message that there will be serious consequences for companies and individuals who prey on New Jersey consumers, and particularly on those who are most vulnerable.”
To date, more than four dozen individuals or relatives of individuals who paid for Advanta’s services between 2014 and 2018 have reported paying fees ranging from $3,000 to $9,000 each, but then never receiving services or the refund guaranteed to customers.
According to the state’s complaint, filed last week in New Jersey Superior Court in Essex County, defendants brought in more than $300,000 from these consumers alone before the company abruptly shut down.
“The defendants’ alleged fraudulent conduct and reckless use of company funds left Advanta clients without the critical help that they paid for and were relying on when the company abruptly closed its doors,” said Paul Rodríguez, acting director of the division of consumer affairs, in a statement. “We will seek justice for their clients and enforce the Consumer Fraud Act to ensure other New Jersey residents are protected when they spend their hard-earned money to hire a company or individual to provide any type of service.”
Defendants violated the New Jersey Consumer Fraud Act and advertising regulations by failing to submit applications for Medicaid services for consumers even though consumers paid in full upfront; by telling consumers that their Medicaid applications were submitted when they hadn’t been; by telling consumers the company would return their sensitive personal and financial documentation and then failing to do so; and by failing to honor the money-back guarantee advertised on the company’s website.
The state seeks to impose monetary penalties on defendants, to terminate Advanta’s business registration, and to recover attorneys’ fees and investigative costs.
It also seeks to bar any unfair and deceptive business practices by the defendants, and to stop Aryeh and Feller from doing business in New Jersey.
Unidentified consumers with unfulfilled contracts with Advanta are encouraged to contact the Division of Consumer Affairs by visiting its website or call 1-800-242-5846.