Director of AIDS Testing Firm Linked to Fraud Suit

Times Staff Writer

A co-owner of an AIDS blood testing company that has come under fire from city officials was sued by the state attorney general's office last year for allegedly participating in a fraudulent telephone credit card operation.

Lawrence Berry, a co-owner of the National Assn. for AIDS Awareness, a private company in West Los Angeles, was associated with the now-defunct Executive Gold Card Travel Club, which allegedly ran the credit card operation, according to the attorney general's suit.

The travel club also is under investigation by the U.S. Secret Service, officials said Tuesday. And Berry reached an out of court settlement in another civil suit filed against the club by two large credit card companies, his lawyer told The Times.

Berry is executive director of AIDS Awareness, which had planned to open this week until the City Council on Friday called for an investigation of the firm and its proposal to provide identification cards to those who test negative on the AIDS antibody blood test.

The clinic opened Monday but Berry canceled appointments because the presence of the news media meant customers would not be assured privacy. Problems mounted Tuesday when city officials said the clinic did not meet building code requirements. Judi Bloom, a spokeswoman for the firm, said Awareness will remain closed until the problems are corrected.

At a noisy news conference at the clinic Tuesday, Councilman Joel Wachs called the plan to use identification cards "disgusting and misleading." Awareness attorney Peter Brown in turn threatened legal action against the City Council if members do not retract their critical statements, which he likened to a McCarthy-era witch hunt.

Berry was not at the press conference and was not available for comment later. The company refused to name the other investors in the limited partnership.

According to the attorney general's office, Berry is named in the state's suit against the travel club along with at least one other defendant.

"There is a question as to whether he ran the show or was a major employee, but we named him because it appeared he had responsibility in the company for those acts that we allege in the complaint," said Deputy Atty. Gen. Jerry Smilowitz.

The suit alleges that salesmen for the Los Angeles-based travel club made calls to thousands of consumers around the country, implying that they were connected with one of several major credit card organizations. They allegedly told consumers that they had been selected to receive a free vacation--the only qualification was that they have a valid credit card.

Smilowitz said the salesmen then asked the consumers detailed questions, including their credit card number. According to the suit, the club then tried to bill the consumers' credit card accounts a $349 membership fee either in the club or a wholesale buying service, even when customers said they were not interested.

No trial date has been set in the case.

Brown declined to discuss Berry's association with the travel club or the suits against it except to say, "It was just a company he (Berry) worked for; he was not named in the (credit card companies') civil suit."

And Berry's attorney in the travel club matter, Mark Wapnick, said he could not comment on the attorney general's allegations because the matter is still in court. But he said that Berry and the credit card companies had privately resolved their dispute. He would not elaborate.

The second case against the travel club was filed last year by MasterCard International Inc. and Visa International Service Assn.

Kimberly Reiley, attorney for the credit card companies, said the suit alleges that travel club salesmen made $120,00 worth of phone calls by illegally tapping into long distance lines. Reiley said that after names and credit card numbers were obtained by random calls, the company would attempt to cash in credit card sales drafts.

The suit states that the Secret Service last summer seized two cardboard boxes full of credit card drafts that Berry and another man had brought into a Bank of America branch. According to the suit, the travel company attempted to launder between $1 million and $2 million dollars in drafts.

Reiley would not disclose the details of the agreement reached between the credit card companies and Berry. The companies' case against the travel club and a second defendant is still pending, she added.

A spokesman for the Secret Service, Earl Bedevaney, refused to discuss its inquiry into the club beyond saying, "There is an ongoing investigation of the travel company and its principals."

Meanwhile, the dispute over the AIDS clinic heated up Tuesday when city building inspectors announced their actions against the facility. Officials said the company renovated its office suites without the required city permit and failed to provide the necessary parking spaces as a medical clinic.

In response, Brown said the group is leasing space in the building and that representatives would take up the permit issue with the landlord.

Awareness plans to test clients to see if they have developed antibodies to the HTLV-III virus, which has been linked to acquired immune deficiency syndrome, Bloom, the firm's spokeswoman, explained at the news conference. Those who test negative will be given an identification card bearing the client's picture with the word "OK." The fee for the initial test and a card good for three months is $100. For $45, clients may get retested for updated cards every three months, Bloom said.

Bloom said the card is not meant to be a "license for promiscuity," but merely an "educational tool and certificate of responsibility." She added that before clients obtain the card they will be counseled by center staff as to the importance of so-called safe sex practices.

Bloom also said the center took exception to allegations that it was profiteering from the AIDS crisis. Many private clinics and doctors provide similar tests, she said, maintaining that the center's fees are in line with the going rate.

At the press conference, Wachs said nonprofit government AIDS centers had contacted him to voice their opposition to the center's plans.

The councilman said health care workers fear that the identification cards might be misrepresented as indicating the card holder does not have AIDS. He noted that it can take many months for AIDS antibodies to show up and that a negative test result is not a sure sign that a person does not have AIDS.

By the same token, officials note, a positive test result does not mean that a person will get the disease.

Times staff writer Victor Merina contributed to this article.

Copyright © 2019, Los Angeles Times
EDITION: California | U.S. & World