NEWARK – Attorney General Gurbir S. Grewal and the Division of Consumer Affairs announced today the filing of a lawsuit against a New Jersey company and two individuals for allegedly defrauding consumers who paid thousands of dollars each for assistance in obtaining Medicaid coverage, and then shutting down the business after using the money to bankroll personal expenditures.
Advanta Medicaid LLC d/b/a Advanta Medicaid Specialists (“Advanta”), which had offices in Ocean County and Waterbury, Connecticut, allegedly charged dozens of New Jersey consumers to assist them in establishing eligibility for Medicaid benefits, while offering a money-back guarantee for those not approved for Medicaid coverage, but failed to deliver the services promised or provide full refunds as guaranteed.
The lawsuit also names as defendants two individuals involved with the company, Nissim “Sam” Aryeh and Chaim E. Feller, both of Ocean County. According to the complaint, Aryeh and Feller transferred company funds into their personal accounts and used company monies for their own personal use. One or both men used funds from the company to cover expenses at an Atlantic City casino; purchases at high-end clothing stores and restaurants; and payments to local private schools with no apparent connection to the business.
Ultimately, Advanta ceased operations abruptly, leaving consumers who had already paid for the company’s services with nowhere to turn.
“Families and individuals seeking assistance with Medicaid enrollment are among those who can least afford to lose thousands of dollars to fraud,” said Attorney General Grewal. “Today we’re sending a clear message that there will be serious consequences for companies and individuals who prey on New Jersey consumers, and particularly on those who are most vulnerable.”
The Division opened its investigation after receiving dozens of complaints about Advanta. To date, more than four dozen individuals or relatives of individuals who contracted with Advanta between 2014 and 2018 have reported paying upfront fees ranging from $3,000 to $9,000 each but then never receiving the services that Advanta promised or the refund it guaranteed customers who were not approved for Medicaid coverage. According to the State’s complaint, which was filed in New Jersey Superior Court in Essex County last week, defendants raked in over $300,000 from these consumers alone before the company ultimately shut down abruptly.
There may be additional, unidentified consumers with unfulfilled contracts with Advanta. They are encouraged to contact the Division of Consumer Affairs.
“The defendants’ alleged fraudulent conduct and reckless use of company funds left Advanta clients without the critical help that they paid for and were relying on when the company abruptly closed its doors,” said Paul R. Rodríguez, Acting Director of the Division of Consumer Affairs. “We will seek justice for their clients and enforce the Consumer Fraud Act to ensure other New Jersey residents are protected when they spend their hard-earned money to hire a company or individual to provide any type of service.”
The State alleges the defendants violated the New Jersey Consumer Fraud Act and advertising regulations by engaging in conduct that included:
- Failing to submit applications for Medicaid services for consumers, despite the consumers paying up front in full for these services.
- Representing to consumers that Medicaid applications had been submitted when, in fact, they had not.
- Representing to consumers that the company would return their sensitive personal and financial documentation, but then failing to do so.
- Failing to honor the money-back guarantee advertised on the company’s website.
In addition to seeking restitution for injured consumers, the State’s filing seeks to impose monetary penalties for the defendants’ alleged unfair and deceptive business practices, to terminate Advanta’s business registration, to recover attorneys’ fees and investigative costs, to bar any ongoing or future unfair and deceptive business practices by the defendants, and to restrict Aryeh and Feller’s business activities in the State.
Investigator Michelle Davis of the Office of Consumer Protection within the Division of Consumer Affairs conducted this investigation.
Deputy Attorney General Robert N. Holup of the Consumer Fraud Prosecution Section within the Division of Law is representing the State in this matter.
Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse, can file an online complaint with the State Division of Consumer Affairs by visiting its website or call 1-800-242-5846 to receive a complaint form by mail.
For questions about NJ FamilyCare, New Jersey’s publicly funded health insurance program that includes CHIP, Medicaid, and Medicaid expansion populations, call 1-800-701-0710, visit NJ FamilyCare or locate your County Board of Social Services . You can also get information by visiting NJHelps, where you can self-screen for eligibility for NJ FamilyCare, Medicaid, food and cash assistance.
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