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Scam watch: Financial aid, health insurance, alleged Ponzi scheme

June 17, 2012|By Stuart Pfeifer
  • Consumers seeking low-cost health insurance were victims of a telemarketing scheme, officials said.
Consumers seeking low-cost health insurance were victims of a telemarketing… (Tom Grill / Getty Images )

Here is a roundup of alleged cons, frauds and schemes to watch out for.

Financial aid – The Better Business Bureau is warning college students and their families to use caution when dealing with companies that promise to help secure scholarships or financial assistance for college. Of particular concern, the BBB said in a recent bulletin, are firms that ask for an upfront fee for help in securing financial assistance for college. In one recent scam, students were notified that they were finalists for a scholarship but needed to pay a fee in order to be considered. Rather than pay upfront fees, students should consult with college counselors and financial aid offices for guidance, the BBB said.  

Health insurance – Several companies affiliated with a telemarketing scheme that allegedly tricked consumers into buying worthless medical discount plans have agreed to repay some victims and to stop making false representations to consumers. The Federal Trade Commission had accused the companies of targeting consumers seeking affordable health insurance and getting them to pay for discount medical plans that were not insurance. In a settlement with the FTC, Health Care One, Americans4Healthcare Inc., Elite Business Solutions Inc. and Mile High Enterprise Inc. and their principals agreed to stop the practice and to surrender proceeds from the sale of an Aston Martin, a Maserati, a yacht and two motorcycles to the government.

Alleged Ponzi scheme – The Securities and Exchange Commission has accused a Northern California investment advisor of defrauding clients by making false statements about returns and how their money would be invested. The SEC said John A. Geringer, who managed GLR Growth Fund in Scotts Valley, told clients that his fund made between 17% and 25% annual profits when his investments actually were losing money. He also used new investor funds to pay returns to earlier clients, in a classic Ponzi scheme, the SEC said. Geringer raised more than $60 million from investors, most of them in the Santa Cruz area, according to the SEC. The SEC is seeking financial penalties from Geringer, plus the return of ill-gotten gains.

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