NJ Company Stole $300K From Customers, Shut Down Abruptly

File Photo

NEWARK – A lawsuit has been filed against a New Jersey company for allegedly defrauding customers who paid for Medicaid coverage, using their payments to fund personal expenses.

  Attorney General Gurbir S. Grewal and the Division of Consumer Affairs filed the suit today against Advanta Medicaid LLC d/b/a Advanta Medicaid Specialists (“Advanta”), which had offices in Ocean County and Waterbury, Connecticut.

  According to the suit, Advanta allegedly charged dozens of New Jersey consumers to assist them in establishing eligibility for Medicaid benefits, while offering a money-back guarantee for those not approved for Medicaid coverage, but failed to deliver the services promised or provide full refunds as guaranteed. Advanta then ceased operations abruptly, leaving consumers who had already paid for the company’s services with nowhere to turn, according to the AG.

  The lawsuit also names as defendants two individuals involved with the company, Nissim “Sam” Aryeh and Chaim E. Feller, both of Ocean County. These men allegedly transferred company funds into their personal accounts intended for their own personal use, including expenses at an Atlantic City casino, purchases at high-end clothing stores and restaurants, and payments to local private schools with no apparent connection to the business.

  “Families and individuals seeking assistance with Medicaid enrollment are among those who can least afford to lose thousands of dollars to fraud,” said Attorney General Grewal. “Today we’re sending a clear message that there will be serious consequences for companies and individuals who prey on New Jersey consumers, and particularly on those who are most vulnerable.”

  After receiving dozens of complaints about Advanta from residents, the Division opened an investigation into the matter. The Division reports that nearly 50 people who contracted with Advanta between 2014 and 2018 have reported paying upfront fees ranging from $3,000 to $9,000 each and then never received the required services or any refund.

  According to the State’s complaint, which was filed in New Jersey Superior Court in Essex County last week, defendants raked in over $300,000 from these consumers alone before the company ultimately shut down abruptly.

  “The defendants’ alleged fraudulent conduct and reckless use of company funds left Advanta clients without the critical help that they paid for and were relying on when the company abruptly closed its doors,” said Paul R. Rodríguez, Acting Director of the Division of Consumer Affairs. “We will seek justice for their clients and enforce the Consumer Fraud Act to ensure other New Jersey residents are protected when they spend their hard-earned money to hire a company or individual to provide any type of service.”

  The State alleges the defendants violated the New Jersey Consumer Fraud Act and advertising regulations by:

  • Failing to submit applications for Medicaid services for consumers, despite the consumers paying up front in full for these services.
  • Representing to consumers that Medicaid applications had been submitted when, in fact, they had not.
  • Representing to consumers that the company would return their sensitive personal and financial documentation, but then failing to do so.
  • Failing to honor the money-back guarantee advertised on the company’s website.

  The State seeks restitution for injured consumers, to impose monetary penalties for the defendants’ alleged unfair and deceptive business practices, to terminate Advanta’s business registration, to recover attorneys’ fees and investigative costs, to bar any ongoing or future unfair and deceptive business practices by the defendants, and to restrict Aryeh and Feller’s business activities in the State.

  Any additional, unidentified consumers with unfulfilled contracts with Advanta are encouraged to file an online complaint with the State Division of Consumer Affairs by visiting its website or call 1-800-242-5846 to receive a complaint form by mail.