AG Grewal, Consumer Affairs Secure $1.66M Settlement Against Advanta Medicaid for Healthcare Fraud

Attorney General Gurbir S. Grewal and the Division of Consumer Affairs have obtained a Default Judgment against Ocean County-based Advanta Medicaid LLC d/b/a Advanta Medicaid Specialists (“Advanta”) and reached a settlement with one of the business’s former owners in a civil lawsuit alleging that the company and its principals accepted hundreds of thousands of dollars from consumers after promising to assist them in establishing eligibility for Medicaid coverage and then failing to provide the promised services.

According to the civil Complaint, Advanta co-owners Nissim “Sam” Aryeh and Chaim E. Feller transferred company funds into their personal accounts to bankroll their own expenses before abruptly shutting down Advanta’s offices around May 2018.

In entering the Default Judgment, Essex County Superior Court Judge James R. Paganelli found that Advanta committed 131 violations of the State’s consumer protection laws and regulations.

The Default Judgment for over $1.66 million includes $281,450 in consumer restitution, $1,310,000 in statutory civil penalties, $66,236 in attorneys’ fees, and $10,380 in investigative costs.

The Default Judgment also permanently bars Advanta from advertising, offering for sale, selling and/or performing any business in New Jersey, and the State will cancel the company’s business certificate.

Separately, Judge Paganelli accepted and entered a Final Consent Judgment resolving the State’s allegations against Chaim E. Feller, where Feller agreed to pay $55,000 in consumer restitution, to refrain from engaging in unfair or deceptive acts in violation of New Jersey’s Consumer Fraud Act, and to provide the Division written notice of any future ownership interest in a registered business that offers for sale, sells, and/or provides Medicaid services to New Jersey consumers.

The settlement with Feller was reached without trial or adjudication and without an admission of any liability of wrongdoing.

The lawsuit against the third defendant, Nissim “Sam” Aryeh, remains pending. Today a Superior Court Judge denied Aryeh’s motion to stay pending the resolution of a criminal investigation he is currently under.

“Anyone who might prey on New Jersey consumers, and particularly on those who are most vulnerable, is on notice: the consequences will be serious,” Attorney General Grewal said. “I am pleased that we will be able to put money back in the pockets of New Jersey residents who need it.”

“These judgments and the ongoing case against the remaining defendant demonstrate our commitment to enforcing the law and standing up for New Jersey consumers,” Paul R. Rodríguez, Acting Director of the Division of Consumer Affairs, said. “These actions ensure affected consumers receive some relief and that others in need of assistance don’t experience additional hardship.”

The Division opened its investigation after dozens of individuals reported that, despite receipt of upfront payments ranging between $3,000 and $9,000, Advanta never rendered agreed-upon services or provided the refunds it guaranteed customers who were not approved for Medicaid coverage.

The State’s complaint, filed on December 10, 2019, alleged that the defendants violated the New Jersey Consumer Fraud Act and advertising regulations by, among other things, failing to submit applications for Medicaid services for consumers, representing to consumers that their applications had been submitted, and failing to honor the money-back guarantee advertised on the company’s website.

Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse, can file an online complaint with the State Division of Consumer Affairs by visiting its website or by calling 1-800-242-5846 to receive a complaint form by mail.