Colorado Attorney General John Suthers said Monday his office has reached a settlement in a lawsuit against Joseph Benedetto, 39, who allegedly defrauded thousands of people in an internet-based marketing scheme that offered medical benefits programs.
Benedetto must pay $250,000 and is prohibited from operating any affiliate marketing programs, insurance, or health-care related services.
According to the consumer protection lawsuit, Benedetto’s company — Consolidated Medical Services LLC — recruited participants to market “medical benefits programs” that were advertised as alternatives to traditional health insurance policies.
“People were enticed to invest in Benedetto’s scheme and he collected hundreds and often thousands of dollars per person, all the while knowing the individual had virtually zero chance of recouping their investment,” Suthers said in a statement. “The health benefits plans themselves were fraudulent, frequently failing to pay patients’ claims as promised.”
The company supposedly charged its recruits — many of whom are elderly — a startup fee of $35 to $345 in addition to a monthly maintenance and hosting fee of $29.95 to sell the medical benefits programs online.
The recruits often ended up paying thousands of dollars for additional products and services. The company recruited 12,800 individuals between 2008-2011.
Less than three percent of the participants earned any money in the program, and most of those individuals didn’t make enough to recoup the expenses they had already lost.
Kristen Leigh Painter: 303-954-1638, kpainter@denverpost.com or
