AG: More Than 200 Seniors Defrauded in Home-Care Scam

 AG: More than 200 seniors defrauded in home-care scam
May 23, 2012
By Margaret Gibbons Staff writer

An Upper Southampton man is among four suspects arrested Monday on charges of bilking more than a combined $700,000 from 200-plus seniors in a multi-pronged fraud scam involving home care, home security services and long-term care insurance.
Ross M. Rabelow, 52, of the 500 block of Jason Drive, is behind bars in lieu of $1 million cash bail on charges that include participating in a corrupt organization, theft, unfair business practices, insurance fraud, conspiracy and dealing in proceeds from unlawful activity.
Bruce Howard Cherry, 52, of Philadelphia, and Thomas J. Muldoon, 57, of Delaware County, are also in prison in lieu of similar bail on the same charges. Robert P. Lerner, 56, of Philadelphia, is in prison in lieu of $250,000 cash bail. Lerner is charged with most of the same charges except for corrupt organization.
“This was a disturbing and despicable scheme designed to extract as much money as possible from unwitting seniors who believed they were protecting themselves against costly future home care expenses,” state Attorney General Linda Kelly said Monday in announcing the arrest of the four at a press conference at the state agency’s office in Lower Providence.
The victims were deceived into spending thousands of dollars for bogus home care or home security services, according to Kelly.
State investigators have identified at least 218 victims of the alleged frauds that date from September 2008 until this year. The victims are from 41 counties in Pennsylvania as well as from New Jersey, New York and Maryland.
The bulk of the victims primarily are from Southeast Pennsylvania, with 10 to 15 victims each in Montgomery, Bucks, Delaware, Northampton, Lancaster and Berks counties. The largest number of victims, 24, live in Lehigh County.
The average age of the victims, many who were listed as retired school teachers, was 83, according to Kelly. Most were women, widowed and living alone without any nearby family members.
The alleged business fronts used in the various scams, said authorities, included:
• American Comfort Home Care Services: A company, owned by Rabelow and for which Cherry served as the primary salesman, that purportedly provided nonmedical home care services such as housekeeping, cooking and dressing for the elderly. Victims were typically encouraged to purchase 1,000 hours of service at a yearly cost of $1,590, according to Kelly.
• Global Services for the Home: A company allegedly operated by Muldoon that was to provide home safety equipment for seniors and would serve as a “health advocate” to assist seniors in dealing with their insurance companies.
• Cherry Senior Solutions: A company allegedly operated by Cherry that was to provide “expert” counseling for seniors concerning long-term health care insurance and other insurance needs that they might have had.
“In reality, these businesses were little more than names on pieces of paper, serving as a mechanism to repeatedly approach seniors with sales presentation,” said Kelly. “Victims were often encouraged to purchase multiple overlapping contracts or to pay for duplicate ‘services’ included in this scheme. In some cases, victims were advised to cancel legitimate insurance policies for long-term health care in favor of the bogus programs pushed by the defendants.”
In most cases, one or more of the defendants would make cold calls to the victims’ homes, said Kelly.
Both Cherry and Rabelow once worked in legitimate long-term health insurance businesses and had access to databases through which they could get names to target their alleged victims, according to Kelly.
In most cases, the defendants initially approached their targeted victims to get them to contract with American Comfort Home Care Services. Subsequent calls were made to have them sign up for home security needs and counseling on other long-term health care insurance.
An investigation by the state indicated that more than 70 percent of the revenue that came into American Comfort Home Care Services went into the pockets of the defendants while only 3 percent went to actual services provided by the company, said Kelly.
Victims’ requests for assistance often were ignored, delayed, discouraged or minimized in an effort to avoid providing services, according to Kelly. Only when a victim or a victim’s family were persistent were a minimal amount of services provided, said Kelly.
In one case where the family was persistent, Rabelow allegedly advertised for a caregiver on Craigslist, interviewed the person at a doughnut shop and then directed the person not to provide the senior with any more than 18 hours of care over a two-week period, said Kelly. She added that Rabelow never did any background checks on the woman.
In another case, a 90-year-old woman preparing for hip-replacement surgery repeatedly tried to contact American Comfort to arrange for services, according to Kelly. Her repeated calls and phone messages were ignored even though she had purchased two contracts through which she was to receive 1,600 hours of services. As a result, the woman had to rely on her elderly friends for help.
Rabelow, Cherry and Muldoon visited the woman’s home several days after she returned home from surgery to advise her that the “fine print” in her contracts voided the contracts because her friends had cared for her, said Kelly.
Once the group got their proverbial foot in the door through the purchases of the American Comfort contracts, they then pushed the victims to purchase home security contracts as well as counseling services, said Kelly.
“These defendants just repeatedly preyed on our most vulnerable citizens,” said Kelly.
Family members and friends of the elderly should reach out to them to ensure that they do not become victims of scam artists, said Kelly.

The preliminary hearings for the four defendants are scheduled for June 30 before District Judge Paul N. Leo in Hatboro.

 Abridged
SOURCE:         The PhillyBurbs
______________________________________

Click for Updates, More Cases and Resources
Search LABELS for More Resources