Former President of MGM Grand Pleads Guilty to Violating the Bank Secrecy Act for Allowing Man Involved in Criminal Conduct to Gamble
LOS ANGELES – A former Arizona resident who previously admitted running a “work-at-home” telemarketing fraud scheme that caused thousands of victims to lose more than $16 million has been sentenced to 78 months in federal prison.
Matthew Craig Rubin, 46, who until 2006 resided in Scottsdale, Arizona, was sentenced yesterday afternoon by United States District Judge R. Gary Klausner. In addition to the 6½-year prison term, Judge Klausner ordered Rubin to pay a $16 million judgment obtained for his fraud victims by the Federal Trade Commission.
Matthew Rubin – along with his brother, Andrew Rubin – ran Medicor, LLC, a Van Nuys-based marketing company that deceived customers into believing that the customers could set up home-based medical billing businesses. Matthew Rubin and his brother executed a scheme to defraud consumers who purchased medical billing software, in part by making false claims about customers receiving a list of doctors who needed medical billing services.
Medicor placed advertisements in the “help wanted” section of numerous publications. Generally, the advertisements stated that a person could earn $20 to $40 an hour from home by helping doctors submit medical bills to insurance companies. Between July 1999 and March 2001, Medicor sold more than 30,000 Kwic-Claim Medical Billing Software packages for approximately $400 each, but only 65 people were actually able to successfully bill using Medicor software.
Matthew Rubin also set up National Business Information Systems (NBIS), which functioned solely as a reference for Medicor. Following a script provided by Matthew Rubin, Medicor employees referred potential Medicor customers to NBIS, which existed solely to provide positive references for Medicor.
In September 2005, Matthew Rubin pleaded guilty to two counts of money laundering and one count of witness tamperingadmitting that he laundered the proceeds of a telemarketing fraud scheme through foreign bank accounts. Matthew Rubin also admitted that he persuaded the former controller of his company to lie in the Federal Trade Commission case against him and his company.
In 2006, Andrew Rubin, pleaded guilty to two counts of money laundering related to the telemarketing fraud scheme and, in 2007, was sentenced to three years in prison and three years of supervised release. Two weeks ago, Judge Klausner sentenced Andrew Rubin to another year in prison for violating the terms of his supervised release.
In 2001, the Federal Trade Commission filed a civil lawsuit against Medicor and the Rubins in United States District Court in Los Angeles. During this litigation, Rubin convinced the Medicor controller to lie for him so that he would be excluded from a federal court injunction and asset freeze order. Free from the asset freeze, Rubin wire transferred his fraud proceeds from New Zealand to the U.S. and withdrew $665,000 in $100 bills from his bank account. In 2002, the FTC prevailed in the lawsuit, and a federal judge ordered Medicor and the Rubins to pay more than $16.5 million (see: http://www.ftc.gov/opa/2002/07/medicor.shtm).
In 2006, just before he was to be sentenced in this case, Matthew Rubin was arrested in Arizona on suspicion of committing another fraud. He was released on bond in that case, and he fled to Mexico, where he remained a fugitive for well over five years. With the assistance of the U.S. Postal Inspection Service and the Mexican government, Rubin was returned to the United States last year.
The criminal case against Rubin was investigated by the IRS - Criminal Investigation and the United States Postal Inspection Service.
Release No. 13-079