Officials: Telemarketing Operation Tricked PA Residents, People Around The U.S.

A nationwide telemarketing fraud scheme that targeted Pennsylvanians and was allegedly run by state residents was shut down following a long-running investigation.

The U.S. Attorney for the Eastern District of Pennsylvania indicted four Lehigh Valley residents and two companies have been indicted in connection with the nationwide telemarketing fraud scheme that allegedly bilked consumers out of tens of millions of dollars by deceptively marketing limited health and dental plans as comprehensive insurance.

The indictment, which came after a probe by the FBI, IRS Criminal Investigation, and the Pennsylvania Attorney General’s Office, alleges that from at least January 2018 through December 2022, the Bene Market Group operated a boiler room call center near Reading where employees used false and misleading tactics to sell discount health and dental plans.

Prosecutors alleged the defendants, including Seguro Medico LLC., falsely represented these plans as “major medical insurance” or equivalent coverage, tricking consumers seeking comprehensive health insurance into purchasing limited benefit plans that provided little to no actual coverage.

According to the 44-page indictment, the Bene Market Group paid lead generators for consumer calls and then falsely claimed to be a “national enrollment center for health insurance” that worked with over 30 top-rated insurance companies to find the best coverage.

In reality, the company did not compare plans, did not work with those insurers, and did not sell major medical insurance. Instead, they allegedly peddled a limited set of discount plans, some of which were not even insurance, authorities said.

Authorities said tens of thousands of consumers were left without adequate insurance coverage, leading to significant medical debt for some with serious health care needs.

The indictment details numerous tactics allegedly used to perpetuate the fraud, including employing unlicensed sales staff, bundling products to mimic comprehensive coverage, using misleading sales scripts, operating under various trade names, engaging in “churning” and “policy-flipping,” downplaying plan limitations, overbilling customers, and instructing consumers to disregard verification disclaimers. It is also alleged that recorded sales calls were altered to deceive regulators and that complaints were ignored.

The Pennsylvania Insurance Department said its investigation of Seguro Medico began in 2015 when it was known as National Brokers of America.

State officials said its investigations led to multiple consent orders against Seguro Medico and Walsh for dishonest sales practices and unlicensed activity, ultimately resulting in their Pennsylvania licenses being revoked in 2022.

Despite being barred from operating in Pennsylvania, state officials continued to receive complaints from out-of-state residents and made multiple referrals to federal and state law enforcement. Those complaints led to the criminal investigation.

“When we hear from consumers that an insurance company or agent might be doing something wrong, we can start an investigation and make sure they are treating Pennsylvanians fairly and following the law,” said Director of the Bureau of Licensing and Enforcement Mike Fissel. “If you or your family have a concern or issue with your insurance company or agent, reach out to PID. We are here to help.”

State officials warned that insurance fraud can take many forms, including staged accidents, inflated claims, fake policies, and deceptive agents.

The Pennsylvania Insurance Department issued the below tips for residents:

Being cautious of unexpected calls: If you didn’t call them first, the salesperson probably found your information on a mailing list.
Not buying insurance over the phone: The risk of fraud is greater if you buy insurance over the phone or online. Hang up on callers if something doesn’t sound or feel right.
Watching for scam artists: Be wary of people who say they are from Medicare, Social Security or any government agency, including PID. Medicare and PID do not make sales calls. Also, health plans and annuities are never offered at a discount or sale price.
Keeping all documents and take notes: Request that policy and coverage information be emailed to you from the salesperson and review it prior to agreeing or giving any of your banking details. Keep any paperwork you get from an insurance company. Write down the names of people you talk to and details of conversations you have.
Checking licenses: Ensure that the companies and individuals you are dealing with to purchase insurance are licensed by PID. You can confirm licensed companies and individuals online at pa.gov/insurance(opens in a new tab).
Never being rushed: Be wary of offers for a “last-chance deal.” If someone calls, emails, or mails you an offer, decline it. Next, look it up online to see if it’s true and the company is real.