 back
to Press Room
Morrison Shuts Down Alleged
Fake Discount Card Operation in Montana
New law provides tools required
to charge violators; Fines of up to $25,000 per
violation could be imposed
7/25/06, Helena, MT– State Auditor John
Morrison issued a cease and desist and charged AmeriPlan USA,
its founding officers, Dennis and Daniel Bloom, and Shirl
Shelley, a Montana resident with numerous violations of both
the Montana Insurance Code and the Montana Securities Act.
The Notice of Proposed Agency Disciplinary Action is the first
of its kind in Montana and possibly the first in the nation,
relying on a new law governing medical care discount cards.
Morrison promised last year to ensure that medical care discount
card providers were legitimate before they were allowed to
sell these products in Montana and he is now making good on
that promise. Morrison is initiating a statewide investigation
into other similar providers.
“I have zero tolerance for illegal schemes
that prey on Montanans,” said Morrison. “We designed
this new law to help us weed out the swindlers from the legitimate
players so Montanans are protected.”
The company and its agents and officers are
accused of failing to contract with the medical care providers
(including doctors, nurse practitioners, physician’s
assistants and hospitals) they advertise as participants in
AmeriPlan’s medical care discount program. The Auditor
alleges that over 700 Montana AmeriPlan members living all
across the state are unable to use the discount cards because
there are few, if any, providers in Montana. Additionally,
AmeriPlan is charged with conducting an illegal pyramid promotional
scheme because it sold “broker packages” for the
purpose of recruiting memberships. Because the memberships
were for discounts that did not exist, Morrison alleges there
is no actual product being sold. AmeriPlan’s largest
source of income in Montana is from the sales of these “broker
packages,” which are nothing but a pyramid scheme, according
to the Auditor’s charging document.
AmeriPlan’s website and other advertising,
including oral assertions from some of its agents, claim to
have a substantial number of medical care providers, dentists,
and chiropractors contracted to provide a significant discount
through the purchase of its card. When the Auditor’s
office investigated these claims they were unable to find
a single medical care provider or chiropractor who honored
the discount cards, and the only dentist who had contracted
with AmeriPlan is located in Forsyth. The new law requires
the discount card companies to have contracts for services
with providers located within a 60 mile radius of the card
holder.
“This law gives us the tools to crack
down on phony discount card plans,” said Morrison. “And
my office will also be able to help Montanans make smart choices
about medical discount cards – but people need to pick
up the phone and call us to check out an offer before moving
forward.”
The company was told to stop its activity in
November of 2005 but AmeriPlan continued to market its discount
cards until the matter was referred to Morrison’s legal
staff in late April. Additional charges include securities
fraud, using deceptive or fraudulent practices in the marketing
of their discount cards, selling unregistered securities by
unregistered salespersons and failure to stop marketing the
cards when they were not properly registered.
###
|
