From: N.A.I.L.E.M. NEWS To: N.A.I.L.E.M. NEWS Sent: Thursday, May 04, 2000 2:37 PM Subject: From The Attorney General
FOR IMMEDIATE RELEASE May 4, 2000
ATTORNEY GENERAL FILES CONSUMER FRAUD COMPLAINT AGAINST TWO COMPANIES AND TH EIR OWNERS IN MEDICAL BILLING BUSINESS SCAM
(Phoenix, AZ) - Attorney General Janet Napolitano announced today that she has filed suit against two individuals and their respective companies fo r alleged violations of the Consumer Fraud Act in the sale of franchises in medical billing processing companies. Napolitano alleged that Richard DeGren ier, 43, and Rochelle Connie Galletta DeGrenier, 41, and their companies, Am erican Business Management, Inc. (ABM), and Patrick & Daniel Marketing Group , Inc. sold franchises in which purchasers were supposed to use their own co mputers to process billings for medical practitioners. ABM advertised that the franchisee would "join an established company w ith a 13 year history," without saying that ABM was new and had no history, and that the 13 years referred to the publisher of the billing software it s old, the Attorney General alleged. The companies ran classified advertisemen ts in local newspapers and callers would get the sales pitch when they calle d in response to the ad. Some of ABM's ads promised that accounts would be p rovided, but ABM's agreements with the medical providers allowed them to can cel at any time, for any reason or no reason, and without notice, according to the Complaint. It alleges that many accounts turned out to be worthless.
Napolitano also alleged that the company sometimes advertised that a pa rt-time franchisee had earned $70,000 a year, but ABM was unable to show tha t any of its franchisees ever earned that much, the Complaint said. To get c onsumers to buy a franchise, ABM falsely told them that their territory was filling up and they needed to buy soon, the Complaint said. ABM sold at leas t 560 franchises to process billings for medical practitioners at an average of $8,500.00 each, from October, 1997, through December, 1998. The Attorney General seeks restitution to consumers of at least $4.3 mi llion, an order stopping the violations and preventing defendants from selli ng business opportunities in Arizona, and at least $500,000.00 in civil pena lties and investigative costs. Consumers who have complaints may contact the Arizona Attorney General's Off ice at (602) 542-5763, or toll free in Arizona outside of the Phoenix area, at 1-800-352-8431.
State of Arizona Department of Law 1275 West Washington Street Phoenix, Arizona 85007-2926 Contact: Pati Urias Press Office Phone: (602)542-4266 Pager: (602)420-2227