U.S. Seniors Deceived By Foreign Scammers In Medicare Hoax
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced that a federal grand jury in East St. Louis, Illinois, returned an indictment on July 23, 2014, charging three Canadian citizens with defrauding elderly American citizens. Fawaz Sebai, also known as “Frank Sebag,” 36, Vassilios Klouvatos, also known as “Billy Klouvatos,” 29, and Lefkothea Klouvatos, also known as “Thea Klouvatos,” 22, all of Laval, in the province of Quebec, Canada, were each charged with eight counts of mail fraud, wire fraud, and conspiracy to commit mail and wire fraud. Each charge carries a term in federal prison of up to 25 years, a fine of $250,000 and five years of supervised release. Arrest warrants have been issued. The United States Attorney’s Office will seek extradition of the defendants from Canada.
The Indictment alleges that Sebai and Vassilios Klouvatos owned and operated a telemarketing business in Canada that operated under the names of AFD Medical Advisors, LLC, and Clinacall. Lefkothea Klouvatos managed the call center for the business. The telemarketers who worked for the business were provided call lists with the names and telephone numbers of elderly Americans. The telemarketers were instructed to sell prescription drug discount cards to the individuals on the list. According to the indictment, the telemarketers often falsely stated or implied that they were affiliated with programs operated by the United States Government, such as Social Security or Medicare, and led the victims to believe that they were required to purchase this prescription drug discount program in order to continue receiving their Social Security and Medicare. The telemarketers then obtained the victims’ bank account information, which other members of the conspiracy then used to create demand drafts that were debited against the victims’ accounts. The victims were typically charged a fee of $299 for these prescription discount cards, which according to the indictment, were available for free on the internet, and typically provided no benefit for individuals insured by Medicare or private insurance.
The indictment alleges that over 5,000 American citizens, including 7 residents of Southern Illinois, were defrauded by this scam. The scheme was conducted from September 2012, through July 2013, and the total losses exceeded $1,000,000.
“Scammers, especially foreign scammers, see seniors in the U.S. as easy marks. Sadly, these fraudsters have seized on the opportunity to exploit the confusion and uncertainty regarding health care to deceive and con the elderly.” said United States Attorney Wigginton. “These international scammers are mistaken, however, if they believe that international borders will insulate them from the consequences of their criminal acts.”
The case is part of an ongoing investigation by the St. Louis Field Office of the Chicago Division of the United States Postal Inspection Service. The Commercial Crime Section (“C.O.L.T.”) of the Royal Canadian Mounted Police in Montreal has conducted its own investigation of this fraudulent organization and has cooperated with United States’ investigative efforts. The prosecution of the case is being handled by Assistant United States Attorneys Michael J. Quinley and Scott A.Verseman.
An indictment is a formal charge against a defendant. Under the law, a defendant is presumed to be innocent of a charge until proven guilty beyond a reasonable doubt to the satisfaction of a jury.