Medical Discount Card Scammers Shut Down After FTC Charges

the court imposed an $8.7 million judgement against defendants Gary L. Kieper and PIHC

Medical Discount Card Scammers Shut Down After FTC Charges
Image: Pixabay
July 21, 2016

A U.S. district court has banned a healthcare scammer from selling its products in response to charges levied by the Federal Trade Commission (FTC).

The agency's complaint claimed that Gary L. Kieper and his company Partners In Health Care Association, Inc. (PIHC) tricked consumers seeking health insurance into buying phony medical discount cards. Kieper and PIHC specifically targeted Spanish-speaking individuals through the use of radio advertisements.

The scam targeted people who needed health insurance, were paying high premiums for coverage because they had lost their jobs, or had pre-existing medical conditions. The discount card marketers claimed the "insurance" would pay for doctor and emergency room visits and other services, and at times claimed the "insurance" qualified for "Obamacare." Instead, PIHC delivered customers a medical discount card that left them uninsured, even though they had paid a fixed enrollment fee and monthly "premiums" ranging from $99 to several hundred dollars.

The FTC discovered the scheme and brought it to the attention of the U.S. District Court for the Southern District of Florida in August 2014. This resulted in a temporary restraining order that halted the defendant's operation and froze its assets.

In addition to the order banning the company from operation, Kieper and PIHC were assessed a $8.7 million judgement and are prohibited from selling or otherwise benefitting from the personal information they collected from consumers.

In November 2015, co-defendants Constanza Gomez Vargas, Walter S. Vargas and United Solutions Group Inc. agreed to a stipulated order that banned them from selling healthcare products and imposed a $2,114,882 judgment, which was suspended upon their payment of $17,616 and surrender of various assets.