8 Are Indicted in Alleged Medical Billing Scheme

A federal grand jury indicted eight telemarketers Friday on charges of bilking $4.4 million from people in a massive Medical-billing scheme operated from boiler rooms in La Habra and Placentia.

The suspects sold software to more than 12,000 consumers, saying they could earn $30,000 a year processing medical insurance claims or bills on their home computers, prosecutors said.

The telemarketers, working for a company known mainly as Medco, also promised to steer consumers to doctors who needed computer services, Asst. U.S. Atty. Ellyn Lindsay said. But the leads did not pan out, she said, and purchasers found they had no way to set up a business.

“What the victims were promised bore little resemblance to what they actually received,” Lindsay said.

Customers paid about $400 each for the software. The company, also called Data Medical Capital and Data-Med, operated from July 1998 to October 1999, when agents with the County of Orange Boiler Room Apprehension Task Force raided its office, investigators said.

The indictment charges Medco owner Bryan D’Antonio, 33, of Brea and seven former employees with 43 counts of mail and wire fraud.

D’Antonio’s attorney, James Riddet, denied that his client misled customers.

“The accusations made against him are not true,” said Riddet. D’Antonio should not be held responsible for promises made by the company’s telemarketing salespeople, the lawyer said. “He wasn’t there much. He was an absentee owner.”

Medical-billing schemes appeal to consumers, in part because they appear more plausible than many work-at-home opportunities. Larger medical practices often do farm out paperwork to legitimate billing contractors.

“It sounded feasible,” said Patricia Emerson, who lives in remote, mountainous Davis Creek and responded to Medco’s newspaper ad. “I wanted to earn an income with my computer. There’s not a lot of opportunities up here.”

Emerson said she paid $299 for software, then canceled her order after getting a bad report on Medco from her local Better Business Bureau. After weeks of wrangling, her bank was able to obtain a refund, she said.

The Medco indictment is the latest in a series of enforcement actions taken against Southland companies that sell work-at-home, medical-billing opportunities.

In July, authorities charged the owners of a Yorba Linda company with wire and mail fraud, saying they fleeced more than 2,500 consumers out of at least $1.3 million.

The U.S. attorney’s office in Los Angeles is investigating at least a dozen other local companies that make similar pitches.

“We’ve shut down three of these operations within the last few months,” Lindsay said. “That shows we’re serious about fighting this type of fraud.”

In a separate action on Friday, authorities raided the Newport Beach offices of Medicrew, also known as MediStaff, alleging in a search warrant that the company was operating a medical billing scheme nearly identical to Medco’s.

Police said they arrested three former Medco telemarketers Friday at the Medicrew office.

Police identified them as Deborah Karen Leicht, 49, of Irvine; Louis Ramirez III, 24, of Chino; and Daniel Eugene Carr, 32, of Newport Beach.

Authorities also arrested three other former Medco employees elsewhere. They were identified as Jason Robert Wilkey, 27, of Brea, Patrick Donald Wire, 42, of San Clemente and Joseph Randy Etheridge, 35, of La Habra.

D’Antonio and another former Medco telemarketer, Marcel Travers, 39, of Lake Forest, agreed to turn themselves in to police by Wednesday.