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Scheme Was Perpetrated By Telemarketing Firms, Facilitated By Banks

Scranton PA- After a scam bilked millions of dollars from thousands of Pennsylvania seniors, U.S. Senator Bob Casey (D-PA) filed an amicus court brief to support a path to justice for the victims. The scheme was perpetrated by telemarketing firms who worked in tandem with major financial institutions. The scammers discussed Medicare benefits with seniors but were really interested in obtaining their private financial information to drain their bank accounts.

“Pennsylvania seniors who were harmed by this scam deserve a path to justice,” Senator Casey said. “Fraud against vulnerable seniors is a cowardly crime, which is why I’ve introduced legislation to increase penalties on those who would scam seniors. I’m hopeful that by filing this brief will allow this case to move forward so impacted seniors have their day in court.”

The underlying suit involves a fraudulent scheme perpetrated by a number of telemarketing firms and is specifically directed at a financial institution, Zions National Bank, that assisted in the fraud.

Under the  alleged scheme, telemarketers posing as Medicare officials contacted senior citizens suggesting that they update their health insurance cards.  Seniors expressing an interest in this offer were then asked to supply their bank account information.  Rather than receiving new health insurance cards however, seniors next learned they had been signed up for so-called discount health plans which they had never agreed to, offered by companies they had never heard of, and for which their bank accounts had been debited $299.  While Zions Bank did not interact directly with the telemarketers, they did establish a relationship with an intermediary that handled payments for the telemarketers.  Accounts of individual seniors at their local banks were debited by the telemarketers, who then paid the intermediary to process the transactions.  The intermediary in turn deposited the funds withdrawn from seniors’ accounts into its own account at Zions and giving Zions a cut of the fee it received from the telemarketers. In all, Zions in effect let roughly $39 million be withdrawn from hundreds of thousands of accounts from 2007 to 2009.

The current status of the case is that Judge Juan Sanchez in the U.S. District Court for the Eastern District of Pennsylvania recently denied class certification and Attorney Howard Langer is appealing that denial to the Third Circuit.  Casey’s brief would support the case moving forward.