"Calling on Behalf of Medicare": Canadian Call Room Owners Go to Prison for $299 Discount Card Scam

The prescription drug discount cards here were available for free online. These folks sold them for $299. Over the phone. To seniors. While claiming to call for Medicare.

So what happened?

On March 27, 2019, three Canadian citizens were sentenced in federal court in East St. Louis, Illinois. The Department of Justice (DOJ) announced the sentences:

• Fawaz Sebai, 41, of Montreal: 44 months in prison.
• Vassilios Klouvatos, 34, of Montreal: 44 months.
• Lefkothea Klouvatos, 27, of Montreal, Vassilios's sister: 30 months.

All three pleaded guilty in December 2018 to mail fraud, wire fraud and conspiracy charges. Sebai and Vassilios Klouvatos admitted they owned and operated a call room in Canada that marketed prescription drug discount cards to elderly Americans over the phone. Lefkothea Klouvatos admitted she managed it.

According to the DOJ:

• Telemarketers routinely lied, often saying they were calling on behalf of Medicare.
• Sometimes they said or implied that victims might lose their Medicare benefits if they didn't buy a card.
• They hid the fact that $299 cards were available for free on the internet.
• Cards were sold under names including AFD Medical Advisors and Clinacall.
• The scam took more than $1.9 million from over 5,000 people across the U.S.

The case was indicted in July 2014. Canada extradited all three in 2018. The U.S. Postal Inspection Service investigated, with help from the Royal Canadian Mounted Police.

Here's the thing ...

"Calling on behalf of Medicare." Five words. That's all it takes to turn a sales call into fraud.

And then the threat: you might lose your benefits. Look, I don't care how good your offer is. If your script needs to scare a senior about their health coverage, your script is the problem.

Why should you care?

Health and Medicare-adjacent offers are some of the biggest verticals in pay per call. They're also some of the most watched. Every agency and every state attorney general looks hard at calls to seniors about health benefits.

Am I right? You already know that. It's worth hearing again.

What to do this week

• Never say or imply you're calling from Medicare or any government program.
• Never suggest someone could lose benefits if they don't buy.
• Disclose free alternatives when you know they exist. Hiding them was part of this fraud.
• Record and review every senior health call. Every one.

Indicted in 2014. Extradited in 2018. Sentenced in 2019. The government waited. It didn't forget. That's it.