UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF FLORIDA 

) 

FEDERAL TRADE COMMISSION, 

Plaintiff, 

v. 

SIMPLE HEALTH PLANS LLC et al., 

Defendants. 

) 

) Case No. ____________________ 

MEMORANDUM IN SUPPORT OF 

PLAINTIFF’S MOTION FOR AN EX 

PARTE TEMPORARY RESTRAINING 

ORDER 

) 

) 

) 

) 

) 

) 

) 

) 

) 
TABLE OF CONTENTS

I. Introduction......................................................................................................1 

II. Defendants’ Deceptive Business Practices......................................................2 

A. Defendants’ Deceptive Lead Generation Websites ..............................4 

B. Defendants’ Deceptive Telemarketing Sales Pitch.............................12 

C. Defendants Enroll Consumers in Limited Benefit Plans and Medical 

Discount Memberships, Not Comprehensive Health Insurance .........16 

D. Defendants’ Limited Benefit Plans and Discount Memberships Do

Not Pay for Medical Services Typically Covered by Comprehensive 

Health Insurance..................................................................................19 

E. Defendants’ Sham “Verification” Process ..........................................22 

F. Defendants’ Deceptive Cancellation and Refund Policies .................23 

G. Consumer Injury..................................................................................25 

H. Other Law Enforcement Actions.........................................................25 

1. Cease and Desist Orders ...........................................................26 

2. Florida Department of Financial Services Investigations.........26 

3. Pennsylvania Investigation .......................................................27 

4. Nebraska Attorney General Warning .......................................28 

5. Montana Action.........................................................................28 

III. Defendants .....................................................................................................28 

A. Corporate Defendants..........................................................................29 

i
 

 

B. Individual Defendant...........................................................................30 

C. Common Enterprise.............................................................................31 

IV. Argument .......................................................................................................32 

A. This Court Has the Authority to Grant the Requested Relief .............32 

B. The FTC Meets the Standard for Issuance of a Temporary Restraining 

Order....................................................................................................33 

1. The FTC is Likely to Succeed on the Merits ............................33 

a. Defendants Are Violating the FTC Act..........................34 

b. Defendants Are Violating the TSR.................................36 

c. Steven Dorfman Is Individually Liable ..........................37 

2. The Balance of Equities Strongly Favors Injunctive Relief .....38 

C. The Temporary Restraining Order Should Include an Asset Freeze, 

Appointment of a Receiver, and Other Ancillary Relief ....................39 

1. An Asset Freeze Is Necessary to Preserve the Possibility of 

Providing Restitution to Defendants’ Victims..........................39 

2. A Temporary Receiver Is Necessary to Preserve the 

Status Quo. ................................................................................40 

3. Immediate Access and Expedited Discovery Are Necessary to 

Preserve Evidence .....................................................................41 

D. The Temporary Restraining Order Should Be Issued Ex Parte..........42 

V. Conclusion .....................................................................................................43 

ii
TABLE OF AUTHORITIES 

Cases 

AT&T Broadband v. Tech Commc’ns, Inc., 381 F.3d 1309, 1319-20 (11th Cir. 2004) ............... 42 

Del. Watch Co. v. FTC, 332 F.2d 745, 746 (2d Cir. 1964)........................................................... 31 

FTC and Florida v. Marcus, No. 0:17-cv-60907-FAM (S.D. Fla. May 9, 2017) ........................ 33 

FTC v. Affordable Media, LLC, 179 F.3d 1228, 1234 (9th Cir. 1999)......................................... 37 

FTC v. All Us Mktg. LLC et al., No. 6:15-cv-1016-ORL-28GJK (M.D. Fla. June 22, 2015)...... 33 

FTC v. Am. Student Loan Consolidators, LLC, 

No. 17-61862-DPG (S.D. Fla. Sept. 26, 2017)............................................................................. 33 

FTC v. Amy Travel Serv., Inc., 875 F.2d 564, 573-74 (7th Cir. 1989))........................................ 37 

FTC v. Bay Area Bus. Council, Inc., 423 F.3d 627, 636 (7th Cir. 2005)...................................... 37 

FTC v. Bishop, 425 F. App’x 796 (11th Cir. 2011)...................................................................... 33 

FTC v. D&S Mktg. Sols. LLC, et al., 

No. 8:16-cv-01435-MSS-AAS (M.D. Fla. June 8, 2016)............................................................. 33 

FTC v. DOTAuthority.com, Inc., 0:16-cv-62186-WJZ (S.D. Fla. Sept. 19, 2016)....................... 33 

FTC v. FTN Promo., Inc., No. 8:07-CV-1279, 

2008 WL 821937, *2 (M.D. Fla. March 26, 2008)....................................................................... 37 

FTC v. Gem Merch. Corp., 87 F.3d 466, 469 (11th Cir. 1996) .................................. 32, 37, 39, 40 

FTC v. IAB Mktg. Assoc., LP, 746 F.3d 1228, 1232 (11th Cir. 2014)............ 33, 35, 37, 38, 39, 40 

FTC v. Jordan Ashley, No. 93-2257, 1994 WL 200775, *3 (S.D. Fla. Apr. 5, 1994).................. 37 

FTC v. Lanier Law, LLC, 715 F. App’x 970, 979 (11th Cir. 2017) ............................................. 31 

FTC v. Mail Tree, Inc., No. 0:15-cv-61034-JIC (S.D. Fla. May 19, 2015).................................. 33 

FTC v. Pantron I Corp., 33 F.3d 1088, 1095-96 (9th Cir. 1994) ................................................. 34 

FTC v. Partners in Health Care Assoc., Inc., 

No. 1:14-cv-23109-RNS (S.D. Fla. Aug. 25, 2014) ..................................................................... 33 

iii
 

FTC v. Partners in Health Care Ass'n, Inc., 

189 F. Supp. 3d 1356, 1367-68 (S.D. Fla. 2016).......................................................................... 38 

FTC v. People Credit First, LLC, 244 F. App’x 942, 944 (11th Cir. 2007)................................. 34 

FTC v. Pointbreak Media, LLC, No. 0:18-cv-61017-CMA (S.D. Fla. May 7, 2018) .................. 32 

FTC v. Primary Grp, Inc., 2015 WL 12976115, at *4 (N.D. Ga. June 8, 2015).......................... 33 

FTC v. RCA Credit Servs., LLC, 727 F. Supp. 2d 1320, 1329 (M.D. Fla. 2010) ................... 34, 35 

FTC v. SlimAmerica, Inc., 77 F. Supp.2d 1263, 1272 (S.D. Fla. 1999) ....................................... 35 

FTC v. Strategic Student Sols. LLC, No. 9:17-cv-80619-WPD (S.D. Fla. May 15, 2017) .......... 33 

FTC v. Student Debt Doctor, LLC, No. 17-cv-61937-WPD (S.D. Fla. Oct. 3, 2017).................. 32 

FTC. v. Transnet Wireless Corp., 506 F. Supp. 2d 1247, 1267 (S.D. Fla. 2007)................... 34, 35 

FTC v. Univ. Health, Inc., 938 F.2d 1206, 1217 (11th Cir. 1991)................................................ 33 

FTC v. U.S. Oil & Gas Corp., 748 F.2d 1431, 1432 (11th Cir. 1984).............................. 32, 39, 40 

FTC v. USA Fin., LLC, 415 F. App’x 970, 976 (11th Cir. 2011) ........................................... 32, 37 

FTC v. Wash. Data Res., 856 F. Supp. 2d 1247, 1271 (M.D. Fla. 2012) ......................... 31, 33, 36 

FTC v. Wash. Data Res., 2009 WL 4885033 at *11 (M.D. Fla. Dec. 14, 2009).......................... 33 

FTC v. World Media Brokers, 415 F.3d 758, 764 (7th Cir. 2005) ............................................... 37 

FTC v. World Patent Mktg., Inc. et al., 

No. 1:17-cv-20848-DPG (S.D. Fla. Mar. 8, 2017) ................................................................. 33, 40 

FTC v. World Travel Vacation Brokers, Inc., 861 F.2d 1020, 1029 (7th Cir. 1988).................... 39 

FTC v. World Wide Factors, Ltd., 882 F.2d 344, 347 (9th Cir. 1989) ................................... 33, 39 

Levi Strauss & Co. v. Sunrise Int’l Trading, 51 F.3d 982, 985 (11th Cir. 1995) ......................... 33 

Removatron Int’l Corp. v. FTC, 884 F.2d 1489, 1497 (1st Cir. 1989) ......................................... 36 

Resort Car Rental Sys., Inc v. FTC, 518 F.2d 962, 964 (9th Cir. 1975)....................................... 36 

SEC v. First Fin. Grp. of Tex., 645 F.2d 429, 438 (5th Cir. 1981)............................................... 41 

iv
STATUTES 

Federal Trade Commission Act, 15 U.S.C. § 45(a)...................................................................... 34 

15 U.S.C. § 53(b) .......................................................................................................................... 32 

RULES 

Telemarketing Sales Rule, 16 C.F.R. § 310.3(a)(4)...................................................................... 36 

16 C.F.R. § 310.2(dd) ................................................................................................................... 36 

16 C.F.R. § 310.2(ff)..................................................................................................................... 36 

16 C.F.R. § 310.2(gg) ................................................................................................................... 36 

16 C.F.R. § 310.3(a)(2)(iii)........................................................................................................... 36 

16 C.F.R. § 310.3(a)(2)(vii).......................................................................................................... 36 

Fed. R. Civ. P. 65(b) ..................................................................................................................... 42 

v
 

 

 

 

 

 

 

I. INTRODUCTION 

The Federal Trade Commission (“FTC”) asks this Court to halt a massive deceptive 

telemarketing scheme based in southern Florida that falsely claims to be selling comprehensive 

health insurance plans to consumers across the country. Doing business as Simple Health Plans, 

Defendants prey on consumers seeking affordable health insurance, many of whom are 

uninsured and have preexisting medical conditions. Defendants gain consumers’ trust by falsely 

claiming to be affiliated with reputable organizations, such as the Blue Cross Blue Shield 

Association and AARP, and by falsely claiming to be experts on, and providers of, governmentsponsored health insurance policies, such as those offered pursuant to the Affordable Care Act. 

Defendants then deceive consumers into paying hundreds of dollars per month for what they are 

led to believe is comprehensive health insurance. Instead, Defendants enroll consumers in 

products that provide few, if any, of the fundamental benefits of comprehensive health insurance. 

These alternative products consist of discount memberships and indemnity policies that offer 

negligible reimbursements on only a subset of medical services regardless of their actual cost. 

Deceived consumers are effectively left uninsured and subjected to nearly unlimited financial 

exposure. Many of Defendants’ victims only learn that they are still uninsured after incurring 

tens of thousands of dollars in medical expenses. In stark contrast, the architect of this scam, 

defendant Steven Dorfman, has siphoned millions of dollars of proceeds from defrauded 

consumers to pay for private jet travel, gambling sprees in Las Vegas, the rent for his oceanfront 

condominium, luxury automobiles, over $1 million in jewelry, and even the nearly $300,000 cost 

of his recent wedding at the St. Regis Hotel in Miami. 

The FTC brings this motion ex parte to immediately halt Defendants’ ongoing unlawful 

conduct, which has caused well over $150 million in consumer injury. Without swift action, 

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significant consumer injury is imminent because November 1 begins Open Enrollment for the 

Affordable Care Act, a period during which Defendants have historically increased their sales by 

as much as 350%. The temporary restraining order (“TRO”) sought by the FTC would enjoin 

Defendants’ deceptive sales practices, freeze their assets, appoint a temporary receiver, and 

provide access to Defendants’ business premises and records. The requested relief is supported 

by overwhelming evidence of Defendants’ fraud. This evidence includes multiple declarations 

from consumers victimized by Defendants as well as a transcript of a sales call between a 

consumer and one of Defendants’ telemarketers; declarations from two of Defendants’ former 

employees describing the extent to which Defendants’ business practices are permeated by fraud; 

transcripts of three undercover purchases conducted by FTC staff; copies of a managementapproved sales script that is deceptive on its face; an expert witness’s analysis of the products 

Defendants offer; and declarations from representatives of the Blue Cross Blue Shield 

Association, AARP, and the Better Business Bureau. The relief requested in this motion is 

necessary to prevent continued consumer injury, dissipation of assets, and destruction of 

evidence, thereby preserving this Court’s ability to provide effective final relief to the victims of 

Defendants’ scheme. 

II. DEFENDANTS’ DECEPTIVE BUSINESS PRACTICES 

Defendants’ business model is a classic bait-and-switch scheme designed to trick 

consumers into paying hundreds of dollars for substandard products under the pretense that they 

are actually receiving comprehensive health insurance. This “insurance,” Defendants claim, will 

supposedly cover nearly every aspect of health care, including, but not limited to, doctor visits, 

specialists, hospital stays, laboratory services, emergency room visits, and prescription 

medication. Defendants also blatantly mislead many consumers into believing that they will 

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receive government-sponsored health insurance, including insurance plans that comply with the 

guidelines set by the Affordable Care Act (“ACA”). 

The advantages of a health insurance policy that complies with the standards set by the 

ACA are substantial. For example, those enrolled in ACA-qualified plans are not required to pay 

a fee imposed on individuals who can afford insurance but choose not to purchase it.1 Other 

advantages of ACA-qualified insurance include coverage of preexisting conditions as well as 

“essential health benefits,” including emergency medical care, hospitalization, prescription 

medication, preventive care, maternity care, and pediatric care.2 

In reality, Defendants enroll consumers in limited benefit indemnity plans and discount 

memberships that provide virtually none of the promised benefits. Unlike comprehensive health 

insurance, which shifts significant financial risk from the consumer to the insurance company, 

Defendants’ products do not pay any portion of consumers’ healthcare costs. At most, they may 

provide nominal reimbursements and potential savings for certain expenses. The “benefits” 

afforded by these products are generally deficient on their face (such as a $50 annual limit for 

hospital emergency room care), highly suspect (such as a purported $634 in savings on “life 

extension naturopaths”), or completely unrelated to medical care (such as pet medication, 

magazine subscriptions, car rental, and cell phone service). The financial consequences for 

many consumers are devastating, often saddling them with tens of thousands of dollars in 

1

 Many consumers specifically inform Defendants that they want an ACA plan to avoid paying 

this fee. Plaintiff’s Exhibit (“PX”) 10, Declaration of Dawn Hall (“Hall Dec.”) ¶¶ 3 & 5 

(consumer “made it clear [she] wanted to avoid the tax penalty”); PX 13, Declaration of April 

Macary (“Macary Dec.”) ¶ 4 (consumer told telemarketer she wanted “to avoid incurring a tax 

penalty”); PX 21, Declaration of Catherine Touchet (“Touchet Dec.”) ¶ 4 (consumer wanted to 

“be sure that [she] would not incur a tax penalty”); PX 22, Declaration of Shannon Van Deusen 

(“Van Deusen Dec.”) ¶ 3 (consumer “told the agent” she did not want to be obligated to “pay the 

penalty for failing to obtain insurance”). 

2

 PX 23, Declaration of Expert Witness Dr. Brian Miller (“Miller Dec.”) p. 15. 

3
 

 

 

 

 

 

 

 

 

healthcare bills that they thought would be covered by the “insurance” they had purchased from 

Defendants. 

A. Defendants’ Deceptive Lead Generation Websites 

Defendants advertise their products primarily through a network of deceptive lead 

generation websites that make a variety of false claims, including that Defendants: (1) specialize 

in providing affordable, comprehensive health insurance from an array of reputable carriers; (2) 

are affiliated with the Blue Cross Blue Shield Association and AARP; and (3) are experts on, and 

providers of, government-sponsored health insurance, including plans offered pursuant to the 

ACA and Medicare.3

 Consumers typically find their way to these websites after searching 

online for health insurance.4 

3 Defendants own some of these lead generation websites themselves, and also pay third parties 

for leads. See PX 1, Declaration of Roberto C. Menjivar (“Menjivar Dec.”) ¶¶ 27 & 81-86; PX 

5, Declaration of Emil George (“George Dec.”) ¶ 38. Defendants register all of their lead 

generation websites using a privacy protection service that shields their identity. PX 1, Menjivar 

Dec. ¶¶ 14-25 & ¶¶ 28-39. Similarly, the mailing address displayed on most of these sites is not 

publicly associated with Defendants, but is instead a UPS Store maildrop. Id. ¶¶ 12 & 28. 

4

 PX 6, Declaration of Dawn Banski (“Banski Dec.”) ¶ 32; PX 9, Declaration of Jane Hackethal 

(“Hackethal Dec.”) ¶ 2; PX 10, Hall Dec. ¶ 4; PX 11, Declaration of Ryan Hess (“Hess Dec.”) ¶ 

2; PX 12, Declaration of David Llamas (“Llamas Dec.”) ¶ 3; PX 13, Macary Dec. ¶ 2; PX 14, 

Declaration of Holly Mandarich (“Mandarich Dec.”) ¶ 2; PX 15, Declaration of Roger Prescher 

(“Prescher Dec.”) ¶ 3; PX 16, Declaration of Amanda Scott (“Scott Dec.”) ¶ 2; PX 17, 

Declaration of Vicki Skordilis (“Skordilis Dec.”) ¶ 2; PX 18, Declaration of Gertrude Slawson 

(“Slawson Dec.”) ¶ 2; PX 20, Declaration of Michelle Thompson (“Thompson Dec.”) ¶ 2; PX 

21, Touchet Dec. ¶ 2 PX 22, Van Deusen Dec. ¶ 2. In some instances, consumers follow links 

received in email or text messages that Defendants pay affiliate marketers to disseminate. See, 

e.g., PX 1, Menjivar Dec. ¶ 18 (premiumhealthquotes.com registered to Defendants), ¶ 37 

(capture of premiumhealthquotes.com), ¶ 84 (affiliate marketing campaigns for Premium Health 

Quotes), & ¶ 86 and p. 659 (unsolicited email promoting Premium Health Quotes). See also id. ¶ 

80 and pp. 636-43 (class action text spam lawsuit filed against Defendants); PX 7, Declaration of 

Curtis Conner (“Conner Dec.”) ¶ 2 and p. 4 (email received by consumer with telephone number 

linked to Defendants that stated: “Find Out About TrumpCare Today . . . Open Enrollment Is 

Here.”). 

4
 

 

 

 

 

 

 

Defendants’ lead generation websites deceptively claim that consumers who submit their 

contact information5 will receive multiple quotes for comprehensive health insurance from “the 

Nation’s Leading Carriers” and that these policies will include benefits such as prescription drug 

coverage, access to doctors and specialists as well as hospital and emergency care – all for “low 

co-pays” and “affordable premiums.”6 Defendants falsely assert that they “work closely with 

most insurers to provide an unbiased comparison of plan benefits, premium cost, and 

eligibility.”7 On one of their sites, healthinsurane4me.com, Defendants misleadingly claim that 

they have “assisted hundreds of thousands of consumers with their enrollment in major medical 

insurance.”8 The site includes a mock breaking-news video announcing that Defendants offer 

“top quality health insurance for as much as 66% less than Obamacare.”9 The fake newscaster in 

this video, displayed below, claims that Defendants’ policies include “low co-pays and cover 

items like doctor visits, access to specialists, prescription benefits, coverage for hospitalization 

and emergency room visits.”10 

5 To receive a call from Defendants, consumers must submit a form with their contact 

information as well as information regarding any preexisting medical conditions, such as HIV, 

diabetes, cancer, and mental illness. PX 1, Menjivar Dec. ¶¶ 35, 38 & 39 and pp. 227, 273 & 

289. 

6

 PX 1, Menjivar Dec. ¶¶ 30, 33, 35, 36, 37, 40 & 41 and pp. 153, 186, 218, 235, 244, 294 & 

305. 

7 Id. ¶¶ 39 & 40 and pp. 257 & 277. 

8 Id. ¶ 39 and pp. 276-277. 

9 Id. ¶¶ 40 & 41 and pp. 294, 302 & 303. 

10 Id. ¶¶ 40 & 41 and pp. 294 & 305. 

5
 

 

 

 

 

 

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The announcer closes with this flagrantly deceptive guarantee: “This is not a discount health 

card; it’s real insurance.”11 

Many of Defendants’ lead generation websites also display the Blue Cross Blue Shield or 

AARP logos.12 One site, www.trumpcarequotes.com, shown below, prominently features the 

Anthem BlueCross logo. 13 

11 Id. ¶ 40 and p. 294. 

12 PX 1, Menjivar Dec. ¶¶ 29 (usamedsupp.org), 33 (trumpcarequotes.com) & 42 

(hbcquotes.direct and myobamacareapplication.com) and pp. 138, 186, 310 & 314. 

13 Id. ¶ 33 and p. 186. 

6
 

 

 

 

 

These sites also identify “Anthem BCBS” and the “Blue Cross/Blue Shield Association 

Companies” as “carriers and partners” of Defendants.14 In fact, Defendants are not affiliated 

with the Blue Cross Blue Shield Association or AARP and are not authorized to use the 

trademarks of these organizations.15 

Defendants aggressively exploit widespread uncertainty and confusion regarding the 

ACA by pretending on their lead generation websites to be experts on, or providers of, 

government-sponsored insurance.16 These sites often refer to the ACA and terms associated with 

it, such as “Obamacare.” For example, one site operated by a lead generator affiliated with 

14 Id. ¶ 29 and p. 148 (usamedsupp.org), ¶ 30 and p. 161 (usahealthinsure.net), ¶ 32 and p. 181 

(americanhealthinsure.com), ¶ 33 and p. 203 (trumpcarequotes.com), ¶ 34 and p. 213 

(medigapquote.com), ¶ 35 and p. 230 (freedomcarequotes.com), ¶ 37 and p. 251 

(premiumhealthquotes.com), ¶ 38 and p. 266 (supremehealthplans.com) & ¶ 39 

(healthinsurance4me.com) and p. 284.

15 PX 27, Declaration of Leslie Nettleford ¶ 4 (AARP); PX 29, Declaration of Jeffrey Hinshaw 

¶¶ 5-9 (Blue Cross Blue Shield Association). 

16 Defendants make similar claims regarding their ability to advise consumers about the ACA in 

press releases and media interviews. Specifically, Defendants have claimed that their employees 

provide better guidance to consumers about the ACA in particular, and health insurance options 

in general, than ACA-certified advisors (called “navigators”). In a newspaper interview, for 

example, Defendants’ chief compliance officer asserted that, compared to navigators, her 

employees “have the freedom to help the consumer figure out what’s in their best interest.” PX 1, 

Menjivar Dec. ¶ 50 and p. 384. Similarly, in a press release, Defendant Steven Dorfman claimed 

that his employees have a “deeper, surer feel of the policies, companies, and networks, and how 

they compare.” See Health Benefits Center press release (Jan. 20, 2015), 

https://www.marketwatch.com/press-release/theres-still-time-for-aca-obamacare-openenrollment-here-are-some-questions-answers-and-maybe-surprises-2015-01-20. An ACA 

navigator is an individual or organization trained to help consumers look for health coverage 

options available through the ACA. Navigators are required to be unbiased, and their services 

are free to consumers. Defendants’ telemarketers, by contrast, are compensated solely based on 

commissions. PX 30, Declaration of Terena Baker (“Baker Dec.”) ¶ 8 (former salesperson). 

Moreover, as explained below, they follow deceptive scripts designed to sell inferior limited 

benefit plans and discount memberships, not comprehensive health insurance, much less ACAqualified plans. Id. ¶¶ 11- 13; PX 31, Declaration of Lovely Seraphin (“Seraphin Dec.”) ¶ 31 

(former manager) (“As everyone at Simple Health knows, however, the company’s limited 

benefit plans are significantly inferior to traditional health insurance.”). 

7
 

 

 

 

;.-• .,. • •- Obamacare Marketplace 

-- Compare rates and providers now1 

INDIVIDUAL & FAMILY COVERACE 

Enter Your Zip Code: 

Defendants, displayed below, prominently refers to the “Obamacare Marketplace” and features 

the Blue Cross Blue Shield logo:17 

Even this site’s address, obamacare-plans.com, is misleading. 

On their lead generation websites, Defendants falsely claim that they have helped 

“hundreds of thousands of consumers” enroll in “Obamacare.”18 These sites assert that 

Defendants either will provide consumers with quotes for ACA insurance plans or help 

consumers who are shopping for such plans.19 The sites refer to both the ACA and Medicare, 

17 PX 1, Menjivar Dec. ¶ 27 and pp. 129-130. One consumer was first contacted by Defendants 

after submitting her telephone number to the obamacare-plans.com lead generation site. PX 14, 

Mandarich Dec. ¶ 2. Similarly, another consumer reported being called by Defendants after 

submitting his contact information to a different deceptive lead generation website, officialplans.com. PX 1, Menjivar 1, ¶ 27 and p. 132-136; PX 19, Declaration of Michael Stanley 

(“Stanley Dec.”) ¶ 2.

18 PX 1, Menjivar Dec. ¶¶ 38 & 39 and pp. 257 & 276-77. 

19 Some of Defendants’ lead generation websites deceptively advise consumers that they will 

receive “health insurance quotes” that “may include a combination of state exchange plans, 

federal exchange plans, and private health insurance.” Id. ¶ 33 and p. 186 

(trumpcarequotes.com), ¶ 36 and p. 236 (americashealthcareadvisors.com). Other sites promise 

that Defendants can “help” consumers “interested in shopping on a state or federal exchange.” 

Id. ¶ 32 and p.173 (americanhealthinsure.com), ¶ 30 and p. 153 (usahealthinsure.net), ¶ 31 and p. 

8
 

 

 

 

 

 

 

 

 

 

 

using terms associated with these programs.20 One site registered to Defendants at the URL 

healthinsurancedeadline2018.com,

21 displayed below, warns that uninsured consumers “will pay 

an average Obamacare penalty of almost $1000,” cautions that this amount “is likely to increase 

in the coming year,” and urges consumers to “beat the deadline” and “[a]void these penalties by 

getting insured today.”22 

165 (healthinsurancedeadline2018.com). “Exchange” is a reference to the health insurance 

marketplace established pursuant to the ACA, which assists consumers in shopping for and 

enrolling in ACA-qualified health insurance.

20 Defendants also use the ACA as an employee recruitment tool, promising that prospective 

employees “WILL HAVE MONEY THROWN AT YOU” during “open enrollment.” One of 

Defendants’ job postings features a cigar-smoking man throwing money in the air next to the 

statement: “If you are not making money hand over first [sic] this open enrollment you are not 

making the most of your time left on this earth. Well guess what . . . here is your golden 

opportunity to MAKE THAT MONEY!” Id. ¶ 48 and p. 370. Under the ACA, “open 

enrollment” is a period during which individuals or employees may add or drop their health 

insurance, or make changes to their coverage. There is no such period for Defendants’ limited 

benefit plans and medical discount memberships. 

21 Id. ¶ 31 and p. 165. 

22 Defendants also operate sites that promote “Medicare Health Plans for Your Needs and 

Budget,” invite consumers to “Learn about Medicare and Choose a Plan with Confidence” and 

“Compare Medicare Quotes,” and feature the AARP logo. Id. ¶ 29 and p. 138 (usamedsupp.org) 

& ¶ 42 and p. 318 (simplemedicareplans.com). 

9
 

 

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In fact, Defendants do not sell government-sponsored healthcare plans or provide advice 

regarding such plans. Indeed, they do the opposite, actively misleading consumers about the 

availability and affordability of their options under the ACA by steering consumers into 

markedly inferior products even after consumers have explicitly stated that they want an ACA10
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

qualified health insurance plan.23 During 2015, while publicly boasting about their superior 

ability to advise consumers about options under the ACA,24 Defendants admitted to state 

regulators that out of the 103,000 policies they sold that year, only 30 were ACA-qualified (that 

is, less than 0.029% of their total sales volume).25 Defendants then completely exited the ACA 

marketplace in 2016.26 Despite this, their websites continue to this date to promote their nonexistent expertise regarding government-sponsored health insurance.27 

This lack of scruples has paid off. During the first month of open enrollment in 2017, 

Defendants experienced a 350% increase in revenue.28 According to a former employee, 

Defendants’ telemarketers can easily double their sales during this period.29 

23 See, e.g., PX 14, Mandarich Dec. ¶ 3 (“I specifically asked him to confirm that the plan was 

ACA-compliant and he assured me that it was.”); PX 13, Macary Dec. ¶ 4 (same); PX 21, 

Touchet ¶ 3 (same). Tellingly, the monthly “premiums” that Defendants quoted during the 

FTC’s three undercover transactions were roughly comparable to what the undercover persona 

would pay for a “bronze” ACA-qualified health insurance policy with comprehensive coverage. 

PX 23, Miller Dec. pp. 13 (Fig. 3), 29 (Fig. 8) & 32 (Fig. 10). Nevertheless, Defendants’ 

telemarketers offered the same indemnity plan to each caller, which lacks most of the ACA’s 

essential health benefits and exposes consumers to greater financial risk. PX 23, Miller Dec. pp. 

12-13 (Fig. 2), p. 27 (Fig. 7) & p. 30 (Fig. 9). 

24 See supra note 16. 

25 PX 1, Menjivar Dec. ¶ 75 and p. 560. 

26 In a letter to the Florida Department of Financial Services dated February 4, 2016, Defendants 

stated they chose “not to participate in the Federal Insurance Marketplace this year.” Id. at p. 

558. See also PX 30, Baker Dec. ¶ 10 (former salesperson) (“As far as I knew, Simple Health 

did not offer ACA-qualified plans”).

27 On their primary, consumer-facing website, Defendants claim that their “one objective” is to 

“help consumers through the complexities of the Affordable Care Act.” PX 1, Menjivar Dec. ¶ 

43 and pp. 321 & 333. Another section claims that defendant Steven Dorfman “positioned 

Simple Health to capitalize on the rollout of the Affordable Care Act, aka Obamacare.” See 

www.simplehealthplans.com/steve-dorfman.php. Defendants also operate a lead generation 

website at the URL myobamacareapplication.com. PX 1, Menjivar Dec. ¶¶ 25 & 42 and pp. 

309-312. 

28 Id. ¶ 64 and p 413. This spike in sales also led to an increase in chargebacks, which itself led 

to the eventual termination of Defendants’ existing merchant account for “excessive risk.” Id. ¶ 

61 and p. 411. 

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B. Defendants’ Deceptive Telemarketing Sales Pitch 

Many consumers who submit their contact information to the deceptive lead generation 

websites described above receive a call from one of Defendants’ telemarketers,30 who typically 

identify themselves as an insurance agent licensed in the consumer’s state.31 In many instances, 

these telemarketers are not, in fact, properly licensed insurance agents.32 

In calls with consumers, Defendants’ telemarketers purport to offer comprehensive health 

insurance for a one-time enrollment fee of up to $175 as well as an ongoing monthly “premium” 

of up to $700 or more.

33 When making this pitch, telemarketers follow a management-approved 

script that is deceptive on its face.34 Defendants’ script repeatedly and misleadingly 

29 PX 30, Baker Dec. ¶ 8. The same former employee observed a corresponding surge in “lies 

and deception” by Defendants’ telemarketers and noted that management rarely, if ever, 

disciplined anyone for this conduct. Id. ¶ 14. 

30 See, e.g., PX 9, Hackethal Dec. ¶ 2; PX 12, Hess Dec. ¶ 2; PX 13, Scott Dec. ¶ 2; PX 14, 

Mandarich Dec. ¶ 2; PX 19, Stanley Dec. ¶ 2. Some consumers contact Defendants directly by 

calling one of the telephone numbers displayed on Defendants’ lead generation websites. PX 6, 

Banski Dec. ¶ 2; PX 13, Macary Dec. ¶ 3

31 See, e.g., PX 1, Menjivar ¶ 67 and pp. 417 & 422. 

32 PX 31, Seraphin Dec. ¶¶ 19 & 43 (former customer service manager describing Defendants’ 

practice of attributing sales to her license without her knowledge or consent); PX 30, Baker Dec. 

¶¶ 20-21 (similar testimony from former salesperson).

33 See, e.g., PX 6, Banski Dec. ¶ 5 ($119 enrollment fee, $312 monthly “premium” for “PPO” 

health insurance plan); PX 9, Hackethal Dec. ¶ 6 ($145 enrollment fee, $514 monthly “premium” 

for “PPO health insurance policy”); PX 10, Hall Dec. ¶ 5 ($155 enrollment fee, $283 monthly 

“premium” for “PPO health insurance plan”); PX 13, Macary Dec. ¶ 5 ($360 monthly 

“premium” for ACA-compliant health insurance policy); PX 14, Mandarich Dec. ¶ 4 ($120 

enrollment fee, $88 monthly “premium” for ACA-compliant health insurance policy); PX 15, 

Prescher Dec. ¶ 5 ($150 enrollment fee, $720 monthly “premium” for “PPO” health insurance 

policy); PX 17, Skordilis Dec. ¶¶ 3-6 ($125 application fee, $312 monthly fee for major medical 

“PPO” health insurance plan); PX 20, Thompson Dec. ¶ 3 ($125 enrollment fee, $265 monthly 

“premium” for major medical health insurance policy); PX 21, Touchet Dec. ¶ 3 ($125 

enrollment fee, $79 monthly fee for major medical coverage that complied with “Obamacare” 

requirements); PX 22, Van Deusen Dec. ¶¶ 3-4 ($80 enrollment fee, $277 monthly “premium” 

for ACA-compliant major medical health insurance).

34 PX 24, Declaration of Michael Fissel (“Fissel Dec.) ¶ 11 and pp. 4-8; PX 30, Baker Dec. ¶ 9 

and pp. 7-10 (former salesperson); PX 31, Seraphin Dec. ¶¶ 18 & 31 (former manager) (scripts 

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characterizes the limited benefit plans and discount memberships sold to consumers as “PPOs.”35 

It also deceptively uses other insurance terms of art, such as “premium,” “copay” and 

“deductible” that simply do not apply to Defendants’ products.36 

Building on these facially deceptive scripts, telemarketers often falsely claim that 

Defendants’ “PPO” “insurance” plans cover preexisting medical conditions37 and prescription 

medications.

38 Many telemarketers go even further, leading consumers to believe they are 

receiving ACA-qualified health plans.39 

“were deliberately designed to give consumers the impression that the coverage provided by 

Simple Health’s limited benefit plans was equal to, if not better than, major medical insurance”). 

35 As explained by the FTC’s expert witness, these products are not PPOs. By definition, a PPO 

contracts with a broad range of healthcare providers, including physicians and hospitals, 

designated as the “preferred” network. Plan members who use these so-called preferred 

providers are charged a favorable copay that counts toward their annual deductible. Defendants’ 

limited benefit plans and discount memberships, by contrast, have no preferred network with 

favorable contracting terms and therefore cannot be considered a PPO. PX 23, Miller Dec. p. 9. 

Nevertheless, in accordance with Defendants’ script, telemarketers consistently describe them as 

a type of “PPO” “insurance.” See, e.g., PX 1, Menjivar Dec. 1, ¶ 67 and p. 418 (“So this is an Arated carrier and a PPO”); PX 2, Declaration of Kenneth Hawkins (“Hawkins Dec.”) ¶ 8 and p. 9 

(“We got you approved as a PPO [sic] with an A-plus rated carrier”); PX 3, Declaration of 

Nathaniel Al-Najjar (“Al-Najjar Dec.”) ¶ 9 and p. 14 (“A-rated carrier and a PPO”); PX 7, 

Conner Dec. ¶ 5; PX 18, Slawson Dec. ¶ 3 and p. 18 (“You got a good PPO insurance”).

36 PX 7, Conner Dec. ¶ 5; PX 23, Miller Dec. pp. 9-10; PX 30, Baker ¶ 12 (former salesperson). 

37 PX 1, Menjivar Dec. ¶ 67 and p. 418 (“They don’t discriminate against any of your preexisting 

conditions”); PX 2, Hawkins Dec. ¶ 8 and p. 10; PX 3, Al-Najjar Dec. ¶ 9 and p. 15 (“It will 

cover the preexisting condition of your daughter”); PX 9, Hackethal Dec. ¶ 4; PX 11, Hess Dec. 

¶ 5; PX 12, Llamas Dec. ¶ 4; PX 15, Prescher Dec. ¶ 4 (“I specified that the policy needed to 

cover certain preexisting medical conditions that my wife and I had been diagnosed with and 

identified these conditions to the agent”); PX 19, Stanley Dec. ¶ 4. 

38 PX 1, Menjivar Dec. ¶ 67 and pp. 419, 421; PX 2, Hawkins Dec. ¶ 8 and p. 9 (“You get a plan 

that has . . . prescriptions coverage”) and p. 10 (“So, remember, it covers your prescriptions”); 

PX 9, Hackethal Dec. ¶ 9; PX 15, Prescher Dec. ¶ 4; PX 17, Skordilis Dec. ¶ 5 ($3-6 for generic 

prescriptions, $15-40 for name brand prescriptions); PX 19, Stanley Dec. ¶ 4 ($4 to $12 for 

generic prescriptions, $5 to $20 for name brand prescriptions); PX 20, Thompson Dec. ¶ 3 ($14 

for generic prescriptions, $35 for name brand prescriptions). 

39 PX 9, Hackethal Dec. ¶ 6; PX 10, Hall Dec. ¶¶ 3 & 5; PX 13, Macary Dec. ¶¶ 4-5; PX 14, 

Mandarich Dec. ¶ 3; PX 21, Touchet Dec. ¶¶ 3-4; PX 22, Van Deusen Dec. ¶ 3. See also PX 24, 

Fissel Dec. ¶ 13, Att. B (interview with former salesperson, who stated that script was “sketchy” 

and that employees “would dance around the question if asked if the plan was ACA compliant”); 

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At the end of Defendants’ sales pitch, consumers expect that they will receive a 

comprehensive health insurance policy that covers prescription medication, laboratory services, 

primary and specialty doctor visits, and hospital care.40 Defendants even guarantee some 

consumers that specific doctors or medications will be covered by their plan with only minimal 

copays.41 

PX 30, Baker Dec. ¶¶ 14-15 (former salesperson) (employees lied regularly to consumers, 

bragged to one another about it, and were rarely, if ever, disciplined by management, who only 

cared about sales and seemed to deliberately exploit confusion regarding the ACA). 

40 See, e.g., PX 1, Menjivar Dec. ¶ 67 and p. 418 (“You’re going to have doctor office visits, 

diagnostic testing for blood and lab, three options on your medications, medical, surgical and 

hospital coverage with no deductible”); PX 2, Hawkins Dec. ¶ 8 and p. 9 (“what you receive with 

the policy is going to be doctor visits, diagnostic testing, so blood and lab work ... [m]edications 

will be covered, surgical, and hospital coverage”); PX 8, Declaration of Jules Fernandez 

(“Fernandez Dec.”) ¶ 5 (plan benefits “included no out-of-pocket expenses for major health 

healthcare services; acceptance at every hospital and urgent care center; low deductible; and, 

depending on the doctor, I may or may not have a co-pay”); PX 9, Hackethal Dec. ¶ 4 (“The 

agent assured me that he would find a plan that enabled me to see any doctor I wanted and would 

also cover all of my pre-existing conditions and current medications”); PX 16, Scott Dec. ¶ 4 

(telemarketer repeatedly assured consumer that she would receive major medical insurance, 

which the consumer understood meant a plan that would cover “hospital and doctor visits, 

medical tests, and prescription drugs”); PX 18, Slawson Dec. ¶ 4 (“Nellie told me that the policy 

she offered would cover doctor’s visits, lab work, and surgical costs, that it required no 

deductible, no claim forms, and that it had no limits.”); PX 19, Stanley Dec. ¶ 4 (telemarketer 

“indicated that the insurance plan would cover doctor visits, diagnostic testing, medical and 

surgical procedures, hospitalization”).

41 See, e.g., PX 1 Menjivar Dec. ¶ 67 and pp. 420, 421 ($25 copay for unlimited doctor visits, 

and $4-$12 copay for prescription medications); PX 14, Mandarich Dec. ¶ 3 (plan included 

doctors in consumers’ area); PX 15, Prescher Dec. ¶ 4 ($35 copay for doctor visits); PX 17, 

Skordilis Dec. ¶ 5 (telemarketer claimed that plan had no deductible for hospitalization, 

maximum out-of-pocket expense of $1,250 per person per year, $35 copay for urgent care visits, 

and a $50 copay for emergency room visits); PX 18, Slawson Dec. ¶ 12 and p. 14 (“You will 

never pay more than $50 to see a doctor, okay?”); PX 19, Stanley Dec. ¶ 6 (telemarketer assured 

consumer that doctor was within plan’s network); PX 20, Thompson Dec. ¶ 3 (telemarketer 

claimed “plan had no deductibles, that the copay for doctor visits was $10 for primary care 

physicians and $30 for specialists . . . and [consumer] would pay under $35 for name brand 

prescriptions and under $14 for generic prescriptions”); PX 21, Touchet Dec. ¶ 3 (consumer was 

promised that plan would include doctor visits, clinic visits, and prescription all with a $20 

copay). 

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In three undercover calls conducted by the FTC, telemarketers made misrepresentations 

consistent with – and often more egregious than – Defendants’ facially deceptive sales script. In 

one undercover transaction, Defendants’ telemarketer claimed to find a “PPO” “health 

insurance” policy that would cover preexisting conditions, including diabetes treatment needed 

by the caller’s daughter.

42 The telemarketer not only guaranteed the plan would “cover the 

preexisting condition of your daughter,” but claimed that Defendants’ “system” specifically 

selected the plan “because it does cover preexisting conditions.”43 Notwithstanding these 

unequivocal assurances, Defendants actually sold the caller a limited benefit “hospital 

indemnity” policy and a discount membership, among other products, not comprehensive health 

insurance.44 What’s more, plan documents plainly show that the child’s diabetes and all related 

treatments are excluded for 12 months from even the exceedingly narrow benefits conferred by 

the “indemnity” policy because diabetes would be classified as a preexisting condition.45 

Even Defendants’ managers personally engage in this deception. During one of the 

FTC’s undercover calls, a manager who identified himself as “Kirsch” intervened and assured 

the caller that his medical needs would be “covered 100 percent” by Defendants’ “health 

insurance plan.” 46 “Kirsch” also promised the caller that he did not “have to worry about being 

42 PX 3, Al-Najjar Dec. ¶ 9 and p. 15. 

43 Id. 44 Id. ¶ 11 and pp. 37, 59 (“THIS PROGRAM IS NOT INSURANCE. IT IS A DISCOUNT 

PROGRAM.”) & ¶ 12 and pp. 79-80 (“Accident & Sickness Hospital Indemnity Plan”).

45 Id. at p. 47 (“There is no coverage for a pre-existing condition for a continuous period of 12 

months following the effective date of a Covered Person’s coverage under the Policy.”). The 

coverage limitations defined in these documents are, in many respects, ludicrous on their face. 

“Emergency Room Benefit,” for example, is limited to $50 per day with a maximum of one day 

of coverage per year. PX 3, Al-Najjar Dec. ¶ 11 and p. 39. The maximum annual coverage is 

limited to just $3200. PX 23, Miller Dec. p. 22. 

46 PX 1, Menjivar Dec. ¶ 67 and p. 433. “Kirsch” is likely Kirschner Alteme, the agent in charge 

of defendant Health Benefits One. Id. at ¶ 7 and p. 124. 

15
 

 

 

 

 

 

 

 

 

 

penalized” under the ACA.47 The plan documents provided after the purchase belie these 

representations, however, showing that the limited benefit and discount membership, as 

discussed below in section II.D, would have covered only a fraction of his medical expenses.

48 

The same documents also acknowledge that enrollment in the policies alone may result in 

additional tax payments, a reference to the ACA penalty the consumer would have incurred 

despite enrolling in Defendants’ program.49 

C. Defendants Enroll Consumers in Limited Benefit Plans and Medical 

Discount Memberships, Not Comprehensive Health Insurance 

The vast majority of consumers who contact Defendants do so in search of 

comprehensive health insurance, including ACA-qualified health plans.50 Contrary to promises 

on their lead generation websites and in telemarketing calls, Defendants do not sell 

comprehensive health insurance policies to these consumers, much less policies from “the 

nation’s leading” carriers, such as Anthem Blue Cross. Instead, Defendants typically enroll 

47 Id. at ¶ 67 and p. 433. 

48 Consumers do not have an opportunity to see these documents prior to completing the sale. If 

consumers ask for written documentation about the plans before agreeing to purchase them, 

telemarketers refuse and state that they are not capable of providing documentation. See PX 21, 

Touchet Dec. ¶ 4; PX 9, Hackethal Dec. ¶ 9; PX 19, Stanley Dec. ¶¶ 10-11.

49 PX 1, Menjivar Dec. ¶ 33 and p. 448 (“accident & sickness hospital indemnity plan is not 

major medical. . . . Lack of major medical coverage (or other minimum essential coverage) may 

result in an additional payment with your taxes”). 

50 PX 30, Baker Dec. ¶¶ 10-11 (former salesperson); PX 31, Seraphin Dec. ¶ 31 (former 

manager). See also PX 6, Banski Dec. ¶ 4 (consumer specifically asked for “a traditional 

individual health insurance plan that would provide comprehensive coverage”); PX 9, Hackethal 

Dec. ¶ 4 (consumer asked for “major medical insurance with low deductibles and copays”); PX 

13, Macary Dec. ¶ 3 (consumer asked for “full medical coverage”); PX 15, Prescher Dec. ¶ 4 

(consumer explained that he wanted “full medical health insurance similar to my current policy 

with Aetna”); PX 17, Skordilis Dec. ¶¶ 3 & 4 (consumer, a retired nurse, asked for “major 

medical health insurance” and asked specific questions about coverage she required); PX 20, 

Thompson Dec. ¶ 4 (“I reiterated that I wanted a nation-wide full coverage major medical 

insurance plan”); PX 21, Touchet Dec. ¶ 3 (consumer asked for “affordable preferred provider 

organization plan with full medical coverage”); PX 22, Van Deusen Dec. ¶ 3 (consumer 

informed telemarketer that she needed “major medical insurance that met all the requirements of 

the Affordable Care Act”). 

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consumers in at least two inferior products: a limited benefit plan (also known as an indemnity 

plan or hospital indemnity plan) and a medical discount membership.51 These products offer 

virtually none of the benefits of traditional health insurance and subject consumers to nearly 

unlimited financial exposure for medical expenses.

52 

Defendants’ limited benefit plans claim to partially reimburse consumers for three narrow 

categories of medical expenses, but the purported reimbursements are grossly inadequate in 

relation to real healthcare costs and are far less than what an actual comprehensive insurance 

policy would cover. For example, Defendants’ typical limited benefit plan restricts total yearly 

coverage to: $100 per day for hospital care with a maximum of 30 days per year; $50 per 

doctors’ office visit with a maximum of three visits per year; and $50 per day for emergency 

room care with a single day of coverage per year.53 In other words, the maximum annual 

reimbursement allowable under Defendants’ plan is just $3200.54 Moreover, an individual could 

only realize this benefit after being hospitalized for at least 30 days and incurring the associated 

financial burden, which the plan would not begin to cover,55 assuming the claims were even paid 

51 Defendants frequently bundle accidental death and dismemberment plans with the other 

products sold to consumers. These “AD&D” plans are limited benefit life insurance policies 

with a separate monthly premium. See PX 6, Banski Dec. ¶ 9 and pp. 15-17, 24-25; PX 11, Hess 

Dec. ¶ 11 and pp. 14 & 20; PX 12, Llamas Dec. ¶ 7 and p. 15; PX 16, Scott Dec. ¶ 11 and pp. 28-

31, 36-39; PX 22, Van Deusen Dec. ¶ 6 and pp. 12-24. 

52 Unlike traditional health insurance, these products do not shift risk from the consumer to an 

insurer. PX 23, Miller Dec. pp. 10 (“In major medical plans . . . the health plan bears the 

supermajority of both the financial and clinical risk. . . . In contrast, in Simple Health’s plans, the 

consumer bears those risks both because of the product design . . . and because the Simple Health 

plans offer extremely limited scope of covered services.”) & 20 (medical discount plans are not 

risk bearing).

53 See, e.g., PX 1, Menjivar Dec. ¶ 70 and p. 459; PX 2, Hawkins Dec. ¶ 12 and p. 62; PX 3, AlNajjar Dec. ¶ 11 and p. 39. 

54 See PX 23, Miller Dec. p. 22. 

55 For 2015, the average adjusted cost for inpatient care in U.S. hospitals was $2,271 per day. 

See Henry J. Kaiser Family Foundation, “Hospital Adjusted Expenses per Inpatient Day,” 

https://www.kff.org/health-costs/state-indicator/expenses-per-inpatient-day/. In fact, 

17
 

 

 

 

 

 

 

 

out.56 Aside from their negligible financial coverage, Defendants’ plans also contain numerous, 

gaping exclusions and omissions. In particular, despite explicit promises to the contrary by 

Defendants’ telemarketers57 and their lead generation websites,58 the plans exclude coverage of 

preexisting medical conditions for the first year and provide no coverage for prescription 

medications.

59 

Defendants’ discount memberships, meanwhile, merely purport to provide consumers 

with access to various pre-negotiated savings from third parties, only some of which relate to 

healthcare. In addition to trivial prescription drug discounts,60 for example, these discounts 

supposedly also apply to identity theft protection, cell phone service, flowers, vitamins, travel, 

car rental and purchase, diet and exercise programs, magazine subscriptions, pet insurance and 

medications, dining, and movie tickets.61 Other membership programs purport to offer 

thousands of dollars’ worth of benefits consisting of access to “wellness specialists,” “life 

Defendants’ own lead generation website scares consumers into purchasing their plans by 

claiming that a three-day hospital stay could cost “around $30,000.” PX 1, Menjivar Dec. ¶ 31 

and p. 165. See also PX 23, Miller Dec. pp. 17-18 (discussing “conservative” estimates of 

inpatient hospital costs based on Medicare statistics).

56 PX 17, Skordilis ¶ 9 (all of consumer’s claims denied). 

57 See, e.g., PX 1, Menjivar Dec. ¶ 67 and p. 418; PX 3, Al-Najjar Dec. ¶9 and pp. 14-15; PX 9, 

Hackethal Dec. ¶ 4; PX 11, Hess Dec. ¶ 5; PX 12, Llamas Dec. ¶ 4; PX 15, Prescher Dec. ¶ 4 (“I 

specified that the policy needed to cover certain preexisting medical conditions . . . and identified 

these conditions to the agent”); PX 19, Stanley Dec. ¶ 4. 

58 See, e.g., PX 1, Menjivar ¶ 39 and pp. 294, 305. 

59 Id. ¶ 69 and p. 448 (“This insurance does not pay any benefits for Sickness caused by or 

resulting from a Covered Person’s Pre-existing Condition if the Sickness occurs during the first 

12 months that a Covered Person is insured under this policy”); PX 2, Hawkins Dec. ¶ 11 and p. 

39 (same); PX 3, Al-Najjar Dec. ¶ 11 and p. 47 (“There is no coverage for a pre-existing 

condition for a continuous period of 12 months following the effective date of a Covered 

Person’s coverage under the Policy”). Defendants’ plans also do not cover nurse practitioners, 

physician assistants, rehabilitation hospitals, or psychiatric hospitals. PX 23, Miller Dec. p. 19. 

60 PX 10, Hall Dec. ¶ 10 (attempted to purchase prescription with a $70 retail price and was told 

that Defendants’ plan would provide a discount of three dollars). 

61 PX 1, Menjivar Dec. ¶ 70 and pp. 473-90 (NCE Lifestyle Saving Program) & 513-17 (MedSense Guaranteed Association); PX 2, Hawkins Dec. ¶ 12 and pp. 76-78 & pp. 108-09. 

18
 

 

 

 

 

 

 

 

 

extension naturopaths,” and “comprehensive education lifestyle coaching.”62 Whatever their 

benefits, however, these memberships do not provide consumers with the comprehensive health 

insurance they thought they were purchasing.63 

D. Defendants’ Limited Benefit Plans and Discount Memberships Do Not Pay 

for Medical Services Typically Covered by Comprehensive Health Insurance 

Consumers are unable to use Defendants’ limited benefits plans and discount 

memberships to pay for medical expenses or receive meaningful discounts or savings for such 

expenses. For example, one consumer agreed to pay $283 per month as well as a $155 

enrollment fee for what Defendants’ telemarketer led her to believe would be an ACA-qualified 

health insurance plan.64 The consumer brought her “insurance” card to the pharmacy to fill 

prescriptions only to discover that it was a prescription discount plan, not insurance, and that it 

entitled her to a savings of just three dollars.65 Defendants advised another consumer to schedule 

medical appointments through a so-called “concierge” service available as a part of what the 

telemarketer assured the consumer was an ACA-qualified plan with no deductibles purchased for 

$277 per month with an $80 enrollment fee.66 When the consumer attempted to make an 

appointment with her doctor, she learned that Defendants’ plan would not cover any of the costs 

of such a visit.67 

62 PX 16, Scott Dec. ¶ 12 and p. 51 ($634 in purported savings on “life extension vitamins and 

supplements” and $125 in purported savings on “pet care”); PX 22, Van Deusen Dec. ¶ 11 and p. 

38. 

63 PX 23, Miller Dec. p. 20 (“Discount memberships do not guarantee coverage of medical 

services or pharmaceutical products, rather they serve as a ‘buyer’s club’ akin to a grocery store 

savers card. . . . I am unaware in all my years of practicing medicine, regulation, and health 

insurance of discount memberships like the ones sold by Simple Health playing any significant 

role in the provision of healthcare.”). 64 PX 10, Hall Dec. ¶ 5. 

65 Id. ¶ 10. 

66 PX 22, Van Deusen Dec. ¶ 3, 4, 10. 

67 Id. ¶ 14. 

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One of the FTC’s undercover transactions illustrates the gulf between what Defendants 

promise in their sales pitch and the meager benefits available to consumers under Defendants’ 

plans. During this call, an FTC investigator asked about coverage for two particular specialists 

at the Emory Clinic in Atlanta as well as multiple preexisting conditions.68 Defendants’ 

telemarketer claimed that the investigator qualified for a comprehensive “PPO” health insurance 

plan with a $263 monthly “premium.”69 According to the telemarketer, (1) the two Emory 

specialists identified by the investigator were in the plan’s preferred provider network;70 (2) the 

investigator would be able to schedule unlimited appointments with these physicians and pay no 

more than $25 per visit;71 and (3) the plan would allow the investigator to obtain the diabetes 

drug Victoza for $4 to $12 per prescription.72 All of these claims are patently false. Defendants 

enrolled the investigator in a “hospital indemnity” plan, not comprehensive health insurance.73 

This plan has no contractual relationship with the Emory Clinic – thus, a patient attempting to 

use this plan with the physicians identified by the investigator would be treated as uninsured and, 

for a routine office visit, billed at a rate of $232 to $458, not $25 as promised by Defendants’ 

telemarketer.74 The telemarketer’s assurances regarding prescription drug costs proved equally 

misleading. Defendants enrolled the FTC’s investigator in a prescription discount program that 

68 PX 1, Menjivar Dec. ¶ 67 and pp. 417, 420. 

69 Id. at p. 418 (“So this is an A-rated carrier and a PPO. So like I said, a PPO means like you 

choose your own doctors and hospitals and you don't need a referral to see a specialist”) and p. 

419 (“And you also you have your prescription medications . . . you have medical, surgical, and 

hospital coverage with no deductible”).

70 Id. at pp. 420-21. 

71 Id. at p. 421. 

72 Id. 73 Id. ¶ 70 at p. 455-71. 

74 PX 26, Declaration of Andrew Rowles ¶¶ 3 & 4 (Director, Patient Accounts at Emory 

Healthcare). 

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would require a consumer in the Atlanta area to pay $850-$900 to fill a Victoza prescription, 

hundreds of dollars more than promised by the telemarketer.75 

The financial consequences of Defendants’ misrepresentations have been ruinous for 

consumers, many of whom do not realize that they are uninsured until after incurring substantial 

medical expenses.

76 According to Defendants’ former customer service manager, consumers 

often complained about receiving thousands or even tens of thousands of dollars in unreimbursed 

medical bills, especially for emergency room visits and surgical procedures.77 One consumer 

purchased what Defendants led her to believe was a PPO health insurance policy that covered 

doctor visits, lab work, and surgical costs.78 Consistent with their script, Defendants’ 

telemarketer also assured the consumer there would be no deductible for hospital visits, which 

the consumer reasonably understood to mean that any expenses related to hospital care would be 

covered by the plan.

79 Shortly after purchasing what she believed was comprehensive health 

insurance, the consumer and her husband each required emergency medical care and incurred 

75 PX 1, Menjivar Dec. ¶ 71. 

76 See, e.g., PX 17, Skordilis Dec. ¶ 9 (consumer incurred thousands of dollars in expenses 

related to treatment for herself and son, none of which was reimbursed by Defendants’ plan); PX 

15, Prescher Dec. ¶ 17 (consumer incurred over $25,000 in medical expenses, none of which 

were covered by plan that Defendants represented to be major medical health insurance). 77 PX 31, Seraphin Dec. ¶ 18. 

78 PX 18, Slawson Dec. ¶ 4. 

79 In the course of its investigation, the FTC obtained an audio recording of this consumer’s sales 

call that reveals the full extent to which Defendants misled her. A transcript of this recording is 

attached to the consumer’s declaration. Among other claims, Defendant’s telemarketer stated: 

“Let’s suppose you need to go to the hospital. I told you that this plan have no deductible. 

When a plan have deductible, what that means is that you have to pay thousands of dollars from 

your pocket before start receiving benefits from the insurance. In this case, those don't work in 

that way. This is for – called first dollar coverage plan, which means that the plan cover you 

from the moment you enter in the hospital. The PPO network take care of the entire bill. They 

reprice that and then they send you what they call the cash benefit to cover the rest. At the end, 

what you pay is less than if you have a very high deductible. You never pay anything – . . .” 

[sic].” Id. ¶ 12 and p. 14. 

21
 

 

 

 

 

 

 

 

 

 

 

over $60,000 in hospital bills.80 Contrary to the telemarketer’s representations, Defendants 

actually enrolled the consumer in a limited benefit plan that covered none of these expenses, 

leaving her tens of thousands of dollars in debt.81 

E. Defendants’ Sham “Verification” Process 

After obtaining consumers’ payment information, Defendants steer consumers through a 

sham “verification” process. Prior to the start of this process, Defendants’ telemarketers often 

instruct consumers to disregard any verification statements indicating that consumers will not 

receive comprehensive health insurance that covers their preexisting medical conditions.82 

During verification, consumers are asked to confirm a series of densely worded 

statements that are either read by a separate employee or transmitted electronically by email or 

text message. On mobile devices, these electronic disclosures are rendered in pages of small, 

barely legible text.83 Consumers who choose to have these statements read aloud are cautioned 

not to ask any questions or they will be transferred back to their sales representative.84 The 

length and complexity of these statements make it virtually impossible for consumers to 

80 Id. ¶¶ 15-21. 

81 Id. ¶ 21; PX 30, Baker ¶ 20. 

82 PX 3, Al-Najjar Dec. ¶ 9 and p. 19 (“some of the information will say they will apply to you 

and some of which will not apply to you. . . . they read their script to everyone.”). A 

telemarketer told one consumer to disregard any inconsistencies between the benefits she had 

been promised and what would be described during verification, explaining that “certain things 

are going to apply for you guys” and that the verification call is “a script” that must be read to 

everyone. PX 18, Slawson Dec. ¶¶ 9 & 12 and p. 19. 

83 PX 2 Hawkins Dec. ¶¶ 8 & 10 and pp. 16-33 (during three-minute electronic verification of 

undercover purchase, investigator signed 11 times on a 13-page document, all viewed on a 

smartphone screen). 

84 PX 1, Menjivar Dec. ¶ 67 and pp. 426; PX 8, Fernandez Dec. ¶ 6; PX 9, Hackethal Dec. ¶ 9 (“I 

felt pressure to agree to everything because the verification employee warned that if I asked any 

questions, he would need to transfer me back to the sales agent where the process would start all 

over again.”); PX 22, Van Deusen Dec. ¶ 5 (consumer felt pressured to agree with verification 

employee, who “not only refused to answer any questions, but warned that I would be transferred 

back to the sales agent if I tried asking a question, where the process would start all over again”). 

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comprehend them.85 Regardless, the record created by this charade does not reflect consumers’ 

understanding of what they agreed to purchase.86 

F. Defendants’ Deceptive Cancellation and Refund Policies 

Consumers often do not discover that that they have been misled until they have paid 

Defendants, and in some cases, continued to pay for the products for many months.87 Those who 

call to cancel their policies and obtain refunds frequently are unable to reach a customer service 

representative, are prevented from canceling, are refused refunds, or are further misled that 

Defendants’ products are comprehensive health insurance policies.88 One former manager 

85 PX 13, Macary Dec. ¶ 8 (telemarketer “rushed” consumer through electronic verification, did 

not explain any of the information, consumer did not feel she had the time to closely review 

documents); PX 21, Touchet Dec. ¶ 6 (same); PX 14, Mandarich Dec. ¶ 6 (telemarketer “quickly 

read through a series of long statements and periodically asked me whether I understood or 

agreed with these statements. It was difficult, if not impossible, to follow everything this person 

said.”); PX 9, Hackethal Dec. ¶ 7 (same); PX 10, Hall Dec. ¶ 6 (same); PX 22, Van Deusen Dec. 

¶ 5 (same).

86 PX 31, Seraphin Dec. ¶ 17 (former customer service manager describing thousands of 

complaints received each day by Defendants from misled consumers). See also PX 24, Fissel 

Dec. ¶ 3 (Pennsylvania Insurance Department investigation prompted by high volume of 

complaints); PX 25, Declaration of Guy Miller (“G. Miller Dec.”) ¶ 15 (BBB alert regarding 

pattern of consumer complaints filed against Defendants). 

87 See, e.g., PX 15, Prescher Dec.; PX 17, Skordilis Dec.; PX 18, Slawson Dec. 

88 PX 6, Banski Dec. ¶ 10 (unable to reach anyone by calling customer service number provided 

by Defendants’ telemarketer); PX 9, Hackethal Dec. ¶ 10 (representative effectively refused 

consumer’s cancellation request, justifying refusal by saying that she had 30 day trial period); 

PX 13, Macary Dec. ¶ 12 (after multiple calls, customer service employee promised that 

consumer would be contacted within 48 hours by someone from Defendants’ “escalation 

department,” but no one ever contacted her); PX 16, Scott Dec. ¶ 15 (consumer called seven 

times and spoke to multiple employees, none of whom could satisfactorily explain why she had 

not received promised insurance) and ¶ 16 (employee attempted to talk consumer out of 

canceling by claiming that Defendants’ policies are cheaper than actual health insurance); PX 17, 

Skordilis ¶ 10 (Defendants’ employees would hang up on consumer when she called); PX 19, 

Stanley Dec. ¶¶ 15-16 (refused to cancel policy without speaking to consumer’s daughter); PX 

20, Thompson Dec. ¶ 10 (“rude and dismissive” supervisor who told consumer that she had a 

“bad attitude”); PX 21, Touchet Dec. ¶ 10 (consumer hung up on at least three times while 

waiting on hold for supervisor); PX 22, Van Deusen Dec. ¶¶ 10 &13 (manager claimed that 

consumer had purchased “excellent medical coverage” and would not be subject to the ACA 

penalty, and encouraged consumer to schedule doctor appointment with her “concierge”). 

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estimates that approximately 95% of the two to three thousand customer service calls received by 

Defendants each day consisted of “complaints from consumers who had been misled about the 

benefits they would receive, typically people who were under the impression that they had 

purchased major medical insurance.”89 Defendants use specially trained “saves team” 

employees and misleading, scripted “rebuttals” to talk consumers out of canceling.90 

When, for example, an FTC investigator attempted to cancel the limited benefit plan and 

discount membership sold to him by Defendants, the investigator unambiguously told the 

customer service agent that he had been deceived: 

I clearly told [the agent] that I needed full coverage insurance, and 

I told him that I needed that to cover my annual physicals and 

doctor’s visit and lab work. . . . Once I received the documents and 

I started reviewing them, I realized that the insurance cards 

actually indicate that it’s more like a discount plan . . . and that it’s 

not intended to replace health insurance.91 

Instead of granting the investigator’s cancellation request, the customer service agent argued 

with the investigator for several minutes, claiming deceptively that he had purchased a “good 

policy” with no “copayments, no co-insurance, and [no] deductibles.”92 Even after the agent 

finally seemed prepared to comply with the investigator’s cancellation request, she first offered 

89 PX 31, Seraphin Dec. ¶ 17. 

90 Id. at ¶¶ 22-23. 

91 PX 2, Hawkins Dec. ¶ 13 and p. 121. 

92 Id. (“So, for real, it is a very good policy, sir.”). The customer service agent who handled one 

of the FTC’s other cancellation requests described the limited benefit plan sold to the FTC in 

similarly deceptive terms: “But normal checkup visits, you’re covered. If you got to an 

emergency room, you’re covered, or to a hospital, you’re covered. You have no deductible and 

no copays when you go to the doctors that are in your network.” PX 1, Menjivar Dec. ¶ 72 and 

p. 550. 

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only to cancel the “health portion” of his policy and continue charging him for “accidental 

death” insurance that Defendants had included in the various products sold to him.93 

G. Consumer Injury 

Defendants’ bank and telephone records show both the scale of their operations as well as 

the considerable harm it has caused to consumers. These records indicate that between January 

2016 and April 2018, Defendants’ boiler rooms handled over 62 million calls with consumers.94 

During this same period, bank records show that Defendants’ scheme generated well over $150 

million in revenue.95 

H. Other Law Enforcement Actions 

As detailed below, Defendants have been the target of numerous law enforcement actions 

related to both the deceptive marketing of their products as well as other illegal conduct. 

Nevertheless, Defendants continue to actively mislead both consumers and law enforcement. 

For example, although Defendants record and save all of their sales calls,96 they tell regulatory 

authorities that such recordings do not exist.97 

93 Id. at p. 551. These products, according to an email received by the investigator, consist of a 

bewildering array of confusingly-named plans and services, including: 1) Health Choice + 

American Financial Security Life Insurance at $99.64 per month; 2) Teladoc 24/7 doctor visits 

by telephone at $29.99 per month; 3) Association Dues at $12.50 per month; 4) Rx Helpline at 

$10.00 per month; 5) Health Education Program (PEP) Online health education & fitness 

training at $125 per month; and 6) Freedom Spirit Plus Cost inclusive of monthly Med-Sense 

Dues & Plan Cost Federal Insurance Company at $161.50 per month. PX 2, Hawkins Dec. ¶ 11 

and p. 43. 

94 PX 1, Menjivar Dec. ¶ 54. 

95 PX 5, George Dec. ¶ 9. 

96 PX 31, Seraphin Dec., ¶¶ 28-31 (former manager); PX 30, Baker Dec. ¶ 19 (former 

salesperson). See also, e.g., PX 18, Slawson Dec. pp. 9-20 (transcript of sales call between 

consumer and Defendants).

97 PX 24, Fissel Dec. ¶ 7 (interview with state insurance investigators in which Defendants’ chief 

compliance officer falsely claimed that Defendants only record the verification portion of sales 

calls). Moreover, Defendants remove misleading statements from the recordings and provide 

sanitized versions to their business partner. PX 31, Seraphin Dec. ¶ 36 (former manager). 

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1. Cease and Desist Orders 

In July 2011, the Indiana Commissioner of Insurance issued an emergency cease and 

desist order against defendant Steven Dorfman after finding that he had engaged in the 

unlicensed sale of insurance to Indiana consumers.98 Six months later, in January 2012, the 

Nebraska Department of Insurance issued a similar order, finding cause to believe that Dorfman 

had sold insurance without a license in violation of a Nebraska statute.99 

2. Florida Department of Financial Services Investigations 

The Florida Department of Financial Services (“DFS”) has conducted at least four 

separate investigations that revealed a pattern of deceptive practices similar to those alleged in 

the FTC’s complaint. Each of these investigations has resulted in the issuance by DFS of a letter 

of guidance to Defendants. DFS issued its first letter of guidance in April 2015 after finding that 

Defendants had improperly displayed a Better Business Bureau logo on multiple websites 

without authorization.100 

DFS conducted a more extensive investigation of defendant Health Benefits One starting 

in July 2014.101 In a letter of guidance issued on June 17, 2016, DFS concluded that Defendants’ 

“websites and press releases over multiple years contained deceptive advertising that implied the 

agency primarily sold ACA ‘Obamacare’ eligible products; however, the agency product 

portfolio consisted primarily of indemnity products and discount plans that did not provide 

98 PX 1, Menjivar Dec. ¶ 77 and pp. 605-11. 

99 Id. ¶ 78 and pp. 613-19. 

100 PX 1, Menjivar Dec. ¶ 75; PX 25, G. Miller Dec. ¶¶ 21-24 (Vice President of Southeast 

Florida BBB). 

101 PX 1, Menjivar Dec. ¶ 75 and p. 555. In response to an initial set of inquiries from DFS, 

Defendants categorized Dorfman as simply a “manager.” In a letter of guidance issued on June 

17, 2016, DFS noted that Dorfman was omitted from the agency license application despite 

being identified publicly as the company’s founder and CEO. 

26
 

 

 

 

 

 

Minimum Essential Coverage.”102 The letter also found that Defendants employed no agents 

certified to sell ACA health insurance policies for the 2014 and 2016 enrollment periods, and 

only sold 30 ACA-qualified policies in 2015.103 

DFS issued a third letter of guidance on January 17, 2018, finding that Health Benefits 

One allowed its employees “to engage in deceptive and misleading practices by misrepresenting 

the terms of policies placed by the agency” for three consumers.104 

A fourth letter of guidance issued by DFS on August 10, 2018 alleged that Health 

Benefits One allowed two of its agents “to engage in deceptive and misleading practices by 

misrepresenting the terms of health policies” sold to two consumers. Although these consumers 

“wanted to purchase major medical policies,” Defendants “placed health policies with limited 

benefits without these consumers’ knowledge and consent.”105 

3. Pennsylvania Investigation 

In June 2017, the Pennsylvania Insurance Department began investigating a high volume 

of complaints filed by consumers who had purchased what they had been led to believe were 

ACA-compliant health insurance policies, but which actually turned out to be medical discount 

memberships, indemnity policies, and similar products.106 After identifying Defendants as one 

of the telemarketers responsible for selling these products, Pennsylvania investigators conducted 

two separate inspections of Defendants’ call center in Hollywood, Florida.107 During one of 

102 Id. at pp. 562-66. 

103 Id. at p. 562. 

104 Id. at pp. 568-69. 

105 Id. at pp. 573-75. The letter also notes that Defendants failed to report the location of their 

former Boca Raton branch to DFS as required by Florida statute. 

106 PX 24, Fissel Dec. ¶ 3. 

107 Id. at ¶ 6. 

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these inspections, investigators interviewed Defendants’ chief compliance officer, who falsely 

claimed that Defendants did not record the sales portion of calls with consumers.108 

4. Nebraska Attorney General Warning 

In a press release dated July 10, 2017, the Nebraska Attorney General alerted consumers 

that “scam artists . . . posing as Blue Cross and Blue Shield of Nebraska . . . are using fake 

Google and Manta listings bearing Blue Cross’s logo and web address, along with bogus 

physical addresses in Omaha.”109 The release cautions that “scam artists,” referring to 

Defendants, “offer insurance plans well below market value . . . but never provide[] insurance 

cards or proof of coverage.” Blue Cross Blue Shield of Nebraska contacted Defendants directly 

informing them of the deceptive internet listings.110 In response, Defendants blamed the listings 

on an affiliate marketer located in Gujarat, India.111 

5. Montana Action 

In May 2016, the Montana Commissioner of Securities and Insurance filed a notice of 

proposed agency action naming defendant Health Benefits One.

112 The complaint alleged that 

Health Benefits One and other respondents had “routinely sold through misinformation and 

deception” short-term medical insurance “by individuals not properly licensed or appointed in 

Montana to conduct this insurance business.”113 

III. DEFENDANTS 

Defendants are Steven J. Dorfman and the six Florida companies through which he 

operates this scheme: Simple Health Plans LLC, Health Benefits One LLC, Health Center 

108 Id. at ¶ 7. 

109 PX 1, Menjivar Dec. ¶ 79 and pp. 621. 

110 PX 28, Declaration of John Clabaugh ¶ 11. 

111 Id. 112 PX 1, Menjivar Dec. ¶ 76 and pp. 566-603. 

113 Id. at pp. 579-80. 

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Management LLC, Innovative Customer Care LLC, Simple Insurance Leads LLC, and Senior 

Benefits One LLC. In the United States, Defendants maintain two call centers in south Florida 

and one in Dallas, Texas. Defendants also operate two offshore business locations in Panama 

and the Dominican Republic.114 

A. Corporate Defendants 

Simple Health Plans LLC functions primarily as a shell company that Defendants use to 

do business under the name “Simple Health.”115 Defendants use Health Benefits One LLC, 

formed in 2012, to transact most of the scheme’s business. Bank, merchant processing, and 

telecommunications accounts associated with Defendants’ operations, as well as their primary 

Florida insurance agency license, are all in the name of Health Benefits One.116 Similarly, many 

of Defendants’ deceptive lead generation websites are registered to Health Benefits One.117 Its 

bank accounts have received tens of millions of dollars in commission payments for the 

deceptive sale of limited benefit plans and medical discount memberships by Defendants to 

consumers.118 Defendants use these funds to finance the day-to-day operating expenses of their 

call centers and funnel millions more to Simple Insurance Leads LLC to buy consumer leads 

from third parties.119 

114 PX 1, Menjivar Dec. ¶ 75 and p. 558-59; PX 30, Baker Dec. ¶ 3; PX 31, Seraphin Dec. ¶ 7. 

115 PX 1, Menjivar Dec. ¶¶ 9 (“Simple Health” on nameplate at Doral location) & 10 (“Simple 

Health” sign above Hollywood location); PX 4, Declaration of Kelle Slaughter ¶ 3 (“Simple 

Health” on a sign outside Dallas location). In addition to being a limited liability company, 

Simple Health Plans is also a fictitious business name registered in Florida to defendant Health 

Benefits One. See PX 1, Menjivar Dec. ¶ 6 and p. 117. 

116 PX 1, Menjivar Dec. ¶¶ 7 (insurance license), 53 (telephone), 56 (bank), 58 (credit cards) & 

61 (merchant processing). 

117 Id. at ¶ 14-25 (website domain registrations). 

118 PX 5, George Dec. ¶ 9. 

119 PX 5, George Dec. ¶ 10 (From January 2015 through April 2018, Health Benefits One paid 

$73,240,237.45 to Simple Insurance Leads). Many of Defendants’ lead generation websites refer 

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Innovative Customer Care LLC and Senior Benefits One LLC also each receive 

significant transfers from Health Benefits One.120 Defendants formed Innovative Customer Care 

in 2017 to manage their customer service operations. Most funds transferred into Innovative 

Customer Care’s bank accounts are paid to Defendants’ customer service employees. Senior 

Benefits One holds a Florida insurance agency license and is licensed to sell insurance in 

multiple other states. Health Center Management LLC is a managing member of Senior 

Benefits One and Simple Health Plans. 

B. Individual Defendant 

Steven J. Dorfman is a resident of this district.121 He controls and actively manages the 

corporate defendants.122 He is identified on Defendants’ main website as Simple Health’s 

“founder and CEO,” and has been quoted extensively in press releases and other media about 

Defendants’ business.123 Dorfman is a signatory on many of the corporate bank accounts that 

receive proceeds of Defendants’ scheme and are used to pay its operating expenses.124 

Dorfman’s extravagant lifestyle is bankrolled by the corporate defendants. He has 

charged millions of dollars for personal expenses to credit cards maintained by these entities that 

to a fictitious business name registered to Simple Insurance Leads, Health Insurance Services, in 

the sites’ privacy policies. PX 1, Menjivar Dec. ¶¶ 6 and 28-39. 

120 PX 5, George Dec. ¶ 10 (From January 2017 through April 2018, Health Benefits One paid 

Innovative Customer Care $1,096.871.17 and from March 2015 through March 2018 paid Senior 

Benefits One $971,500).

121 PX 1, Menjivar Dec. ¶ 89. 

122 See, e.g., PX 31, Seraphin Dec. ¶ 8 & 24 (former manager) (Dorfman has a large office at 

Defendants’ headquarters and receives a daily email with sales and cancellation statistics).

123 PX 1, Menjivar Dec. ¶ 43 and pp. 333, 387. See also Marcia Heroux Pounds, ObamaCare, 

year two: Insurance firms hiring agents to help consumers choose wisely, Sun Sentinel (Oct. 24, 

2014), https://www.sun-sentinel.com/business/careers/fl-health-benefits-jobs-20141027-

story.html. 124 Id. ¶ 57. 

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are then settled with funds from Defendants’ corporate accounts.125 Dorfman also spends 

lavishly on himself using funds directly from the corporate bank accounts. A partial catalog of 

personal expenses that Dorfman has financed with corporate funds, which are proceeds from 

Defendants’ scam, includes: over $1 million in jewelry;

126 luxury vehicles, including a RollsRoyce Wraith and a Lamborghini Aventador;127 $368,000 in cash transfers to the Cosmopolitan 

Hotel and Casino in Las Vegas;

128 $341,000 at nightclubs, including a $57,000 tab incurred at 

one club in a single evening;129 the rent on his $1.4 million oceanfront condominium;130 and his 

recent wedding at the St. Regis Bal Harbor Resort in Miami for which Dorfman spent $133,000 

on flowers alone.131 

C. Common Enterprise 

The corporate defendants operate as a common enterprise and are therefore jointly and 

severally liable for each other’s illegal conduct. To determine if a common enterprise exists, 

courts consider various factors, including: (1) maintaining officers and employees in common; 

(2) operating under common control; (3) sharing of office space; (4) operating the business 

through a maze of interrelated companies; (5) commingling of funds; and (6) sharing of 

advertising and marketing. See FTC v. Wash. Data Res., 856 F. Supp. 2d 1247, 1271 (M.D. Fla. 

2012) (citing Del. Watch Co. v. FTC, 332 F.2d 745, 746 (2d Cir. 1964)); see also FTC v. Lanier 

Law, LLC, 715 F. App’x 970, 979 (11th Cir. 2017) (per curiam) (“[A] corporate entity can be 

held liable for the conduct of other entities where the structure, organization, and pattern of a 

125 PX 5, George Dec. ¶¶ 14-25. 

126 Id. ¶¶ 22 & 30. 

127 Id. ¶ 33 & 34; PX 1, Menjivar Dec. ¶ 87. 

128 PX 5, George Dec. ¶ 31 

129 Id. ¶ 20 and p. 54. 

130 Id. ¶ 31 and p. 77; PX 1, Menjivar Dec. ¶ 89. 

131 PX 5, George Dec. ¶¶ 28 & 29 and pp. 67-75; PX 1, Menjivar Dec. ¶ 52 and pp. 391-405. 

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business venture reveal a common enterprise or a maze of integrated business entities.” (internal 

quotation marks omitted)). 

The corporate defendants form a classic common enterprise. The six corporate 

defendants engage in the same health insurance scam; share ownership, management, office 

locations, employees, fictitious business names, insurance licenses, leads and lead generation 

websites; and commingle funds. 

IV. ARGUMENT 

The FTC seeks ex parte entry of a temporary restraining order, including an asset freeze, 

appointment of a temporary receiver, and immediate access to Defendants’ business premises, to 

prevent Defendants from dissipating assets and destroying evidence. As set forth below, the 

evidence overwhelmingly supports entry of the proposed TRO. 

A. This Court Has the Authority to Grant the Requested Relief 

Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), authorizes the FTC to seek, and this 

Court to grant, preliminary and permanent relief enjoining violations of the FTC Act. See FTC 

v. Gem Merch. Corp., 87 F.3d 466, 469 (11th Cir. 1996) (“[A] district court may order 

preliminary relief, including an asset freeze, that may be needed to make permanent relief 

possible.”). With that authority comes the power to grant “ancillary relief, including freezing 

assets and appointing a Receiver.” FTC v. USA Fin., LLC, 415 F. App’x 970, 976 (11th Cir. 

2011) (per curiam) (quoting FTC v. U.S. Oil & Gas Corp., 748 F.2d 1431, 1432 (11th Cir. 1984) 

(per curiam)). Courts in this District have frequently granted the same ancillary relief that the 

FTC seeks here.132 

132 See, e.g., FTC v. Pointbreak Media, LLC, No. 0:18-cv-61017-CMA (S.D. Fla. May 7, 2018) 

(entering ex parte TRO granting asset freeze, immediate access, expedited discovery, and 

appointment of receiver); FTC v. Student Debt Doctor, LLC, No. 17-cv-61937-WPD (S.D. Fla. 

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B. The FTC Meets the Standard for Issuance of a Temporary Restraining 

Order 

To grant preliminary injunctive relief in an FTC Act case, district courts consider: (1) the 

likelihood that the Commission will ultimately succeed on the merits, and (2) the balance of the 

equities. See FTC v. IAB Mktg. Assoc., LP, 746 F.3d 1228, 1232 (11th Cir. 2014); see also FTC 

v. Univ. Health, Inc., 938 F.2d 1206, 1217 (11th Cir. 1991). The FTC, unlike private plaintiffs, 

need not establish irreparable harm. See IAB Mktg, 746 F.3d at 1232. As demonstrated below, 

the FTC’s evidence satisfies the two-part test and warrants issuance of a temporary restraining 

order against Defendants. 

1. The FTC Is Likely to Succeed on the Merits 

To show that it is likely to succeed on the merits, the FTC need only present evidence 

that it “likely will prevail,” rather than evidence that would justify a “final determination.” Univ. 

Health, 938 F.2d at 1218. The FTC satisfies the standard by establishing “some chance of 

probable success on the merits.” FTC v. World Wide Factors, Ltd., 882 F.2d 344, 347 (9th Cir. 

1989); FTC v. Wash. Data Res., 2009 WL 4885033 at *11 (M.D. Fla. Dec. 14, 2009), aff’d in 

part, vac’d in part on other grounds by FTC v. Bishop, 425 F. App’x 796 (11th Cir. 2011).133 

Oct. 3, 2017) (same); FTC v. Am. Student Loan Consolidators, LLC, No. 17-61862-DPG (S.D. 

Fla. Sept. 26, 2017) (same); FTC v. Strategic Student Sols. LLC, No. 9:17-cv-80619-WPD (S.D. 

Fla. May 15, 2017) (same); FTC and Florida v. Marcus, No. 0:17-cv-60907-FAM (S.D. Fla. 

May 9, 2017) (same); FTC v. World Patent Mktg., Inc. et al., No. 1:17-cv-20848-DPG (S.D. Fla. 

Mar. 8, 2017) (same); FTC v. DOTAuthority.com, Inc., 0:16-cv-62186-WJZ (S.D. Fla. Sept. 19, 

2016) (same); FTC v. D&S Mktg. Sols. LLC, et al., No. 8:16-cv-01435-MSS-AAS (M.D. Fla. 

June 8, 2016) (same); FTC v. All Us Mktg. LLC et al., No. 6:15-cv-1016-ORL-28GJK (M.D. Fla. 

June 22, 2015) (same); FTC v. Mail Tree, Inc., No. 0:15-cv-61034-JIC (S.D. Fla. May 19, 2015) 

(same); FTC v. Partners in Health Care Assoc., Inc., No. 1:14-cv-23109-RNS (S.D. Fla. Aug. 

25, 2014) (same). 133 The evidence used to support such a showing can include “affidavits and hearsay materials.” 

Levi Strauss & Co. v. Sunrise Int’l Trading, 51 F.3d 982, 985 (11th Cir. 1995); see also FTC v. 

Primary Grp, Inc., 2015 WL 12976115, at *4 (N.D. Ga. June 8, 2015). 

33
 

 

 

 

 

 

Here, the evidence establishes that the FTC is likely to prevail on its claim that 

Defendants violated the FTC Act and the Telemarketing Sales Rule through their deceptive sale 

of limited benefit plans and medical discount memberships. The evidence also shows that the 

corporate defendants are jointly and severally liable because they operated as a common 

enterprise and that individual defendant Steven Dorfman is liable for these practices. 

Accordingly, the FTC is likely to succeed on the merits of its claims. 

a. Defendants Are Violating the FTC Act 

Defendants are violating the FTC Act, which prohibits “deceptive acts or practices in or 

affecting commerce.” 15 U.S.C. § 45(a). An act or practice is deceptive if it involves a material 

misrepresentation or omission that is likely to mislead consumers acting reasonably under the 

circumstances. See FTC v. People Credit First, LLC, 244 F. App’x 942, 944 (11th Cir. 2007) 

(per curiam) (following FTC v. Tashman, 318 F.3d 1273, 1277 (11th Cir. 2003)). “Express 

claims, or deliberately made implied claims, used to induce the purchase of a particular product 

or service are presumed to be material.” FTC. v. Transnet Wireless Corp., 506 F. Supp. 2d 1247, 

1267 (S.D. Fla. 2007); see also FTC v. Pantron I Corp., 33 F.3d 1088, 1095-96 (9th Cir. 1994). 

In determining whether a solicitation is likely to mislead consumers, courts consider the overall 

“net impression” it creates. See FTC v. RCA Credit Servs., LLC, 727 F. Supp. 2d 1320, 1329 

(M.D. Fla. 2010) (citing FTC v. Stefanchik, 559 F.3d 924, 928 (9th Cir. 2009)). “A solicitation 

may be likely to mislead by virtue of the net impression it creates even though the solicitation 

also contains truthful disclosures.” RCA Credit Servs., 727 F. Supp. at 1329 (quoting FTC v. 

Cyberspace.Com, LLC, 453 F.3d 1196, 1200 (9th Cir. 2006)). Finally, the FTC need not prove 

that consumers actually relied on the claims. See Transnet Wireless Corp., 506 F. Supp. 2d at 

1266-67 

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Defendants make at least four materially misleading claims: (1) that Defendants’ limited 

benefit plans and medical discount memberships are comprehensive health insurance or the 

equivalent of such insurance; (2) that these products are qualified health insurance plans under 

the Affordable Care Act; (3) that Defendants are experts on, or providers of, governmentsponsored health insurance policies; and (4) that Defendants are affiliated with AARP or the 

Blue Cross Blue Shield Association. 

All of these claims are false. They are also presumed to be material as they are “used to 

induce the purchase of a particular product or service.” RCA Credit Servs., F. Supp. 2d at 1329 

(quoting Transnet Wireless Corp., 506 F. Supp. 2d at 1267); see also FTC v. SlimAmerica, Inc., 

77 F. Supp.2d 1263, 1272 (S.D. Fla. 1999). Each of Defendants’ claims is likely to affect a 

reasonable consumer’s decision about whether to purchase Defendants’ products. Indeed, as 

reflected by the attached declarations from Defendants’ victims and former employees, these 

misrepresentations have induced consumers to pay hundreds of dollars a month for what they 

believed would be comprehensive health insurance or its equivalent.134 

These misrepresentations are not cured by the farcical “verification” process that 

consumers are subjected to at the end of the sales call, after they submit their payment 

information. See IAB Mktg, 746 F.3d at 1233 (operators of medical discount scheme cannot shift 

blame to consumers by faulting them for not reading post-sale disclosures, which do not cure 

134 The consumers whose declarations are submitted herewith in support of the FTC’s motion are 

only a fraction of the consumers who have been injured by Defendants’ conduct. See, e.g., PX 3, 

Al-Najjar Dec. ¶¶ 14-16 (145 consumer complaints against Defendants in the Consumer Sentinel 

Database); PX 31, Seraphin Dec. ¶ 31 (former manager) (thousands of calls received daily by 

Defendants from deceived consumers). 

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misrepresentations made during initial sales pitch) (citing Tashman, 318 F.3d at 1277 (caveat 

emptor is not a valid defense to liability arising from misrepresentations)).

135 

b. Defendants Are Violating the TSR 

The Telemarketing Sales Rule (“TSR”) prohibits deceptive and abusive telemarketing 

practices, including misrepresenting any material aspect of the nature or central characteristics of 

goods or services, 16 C.F.R. § 310.3(a)(2)(iii), or making a false or misleading statement to 

induce any person to pay for goods or services, 16 C.F.R. § 310.3(a)(4).136 As explained above, 

Defendants are violating these two provisions of the TSR by falsely leading consumers to believe 

that they will receive comprehensive health insurance, the equivalent of such insurance, or an 

ACA-qualified health insurance policy. Defendants also violate these provisions by falsely 

claiming to be experts on, and providers of, government-sponsored health insurance policies. 

Defendants also violate a third provision of the TSR, which prohibits misrepresenting an 

affiliation with, or endorsement or sponsorship by, any person or government entity. 16 C.F.R. 

§ 310.3(a)(2)(vii). Despite claims to the contrary on their lead generation websites, Defendants 

are not affiliated with either AARP or the Blue Cross Blue Shield Association. 

135 See also Removatron Int’l Corp. v. FTC, 884 F.2d 1489, 1497 (1st Cir. 1989) (“Disclaimers 

or qualifications in any particular ad are not adequate to avoid liability unless they are 

sufficiently prominent and unambiguous to change the apparent meaning of the claims and to 

leave an accurate impression. Anything less is only likely to cause confusion by creating 

contradictory double meanings.”); Wash. Data Res., 856 F. Supp. 2d at 1275 (FTC Act is 

violated if the seller “induces the first contact through deception” despite buyer later obtaining 

more information (quoting Resort Car Rental Sys., Inc v. FTC, 518 F.2d 962, 964 (9th Cir. 1975) 

(per curiam)).

136 Defendants are “sellers: or “telemarketers” as defined by the TSR because they arrange for 

the sale of goods or services. 16 C.F.R. § 310.2(dd), (ff), & (gg). 

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c. Steven Dorfman Is Individually Liable for Injunctive and 

Monetary Relief 

Defendant Steven Dorfman is responsible for the illegal activity of the corporations that 

he controls.137 An individual may be held liable for injunctive relief under the FTC Act if the 

individual participated directly in or had authority to control the practices, and may be held liable 

for monetary relief if the individual had actual or constructive knowledge of the unlawful acts. 

See IAB Mktg., 746 F.3d at 1233; Gem Merch. Corp., 87 F.3d at 470; FTC v. Bay Area Bus. 

Council, Inc., 423 F.3d 627, 636 (7th Cir. 2005); FTC v. World Media Brokers, 415 F.3d 758, 

764 (7th Cir. 2005). Authority to control may be evidenced by active involvement in the 

corporation’s business affairs, including assuming the duties of an officer, particularly when the 

corporate defendant is a small, closely held entity. See IAB Mktg., 746 F.3d at 1233; FTC v. Amy 

Travel Serv., Inc., 875 F.2d 564, 573-74 (7th Cir. 1989)). The FTC does not need to show intent 

to defraud. See IAB Mktg., 746 F.3d at 1233; FTC v. Affordable Media, LLC, 179 F.3d 1228, 

1234 (9th Cir. 1999). Instead, the FTC need only show that the individual had actual knowledge 

of material misrepresentations, reckless indifference to the truth or falsity of such 

representations, or an awareness of a high probability of deception, coupled with intentional 

avoidance of the truth. See USA Fin., LLC, 415 Fed. Appx. at 974; see also FTC v. FTN Promo., 

Inc., No. 8:07-CV-1279, 2008 WL 821937, *2 (M.D. Fla. March 26, 2008); FTC v. Jordan 

Ashley, No. 93-2257, 1994 WL 200775, *3 (S.D. Fla. Apr. 5, 1994). Participation in corporate 

affairs is probative of knowledge. See IAB Mktg., 746 F.3d at 1233. 

137 As noted above in Section III.C, supra, the corporate defendants do not function as 

independent legal entities, but as an interrelated network to facilitate Defendants’ scam. They 

are therefore jointly and severally liable for Defendants’ conduct because they have operated as a 

common enterprise. 

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Dorfman is the sole officer of four of the six closely held corporate defendants, including 

the entity that serves as the sole manager of the remaining two corporations. He unquestionably 

controls and participates in their practices. He maintains an office at Defendants’ headquarters 

in Hollywood, Florida, is a signatory on corporate bank accounts, and has converted millions of 

dollars in corporate assets for his personal use. Dorfman is fully aware of Defendants’ unlawful 

practices, having been interviewed at least once in connection with Florida’s regulatory 

investigations of Defendants.138 He also receives a daily email summarizing both the number of 

cancellations and reasons why consumers decide to cancel Defendants’ products.139 The most 

common cancellation reason identified in these emails, by far, is deception – specifically, 

complaints from consumers who were misled into believing that they would receive major 

medical health insurance.140 Courts routinely find individuals liable for injunctive and monetary 

relief in such circumstances. See IAB Mktg, 746 F.3d at 1233 (individual defendants named in 

FTC action against medical discount scheme liable for actions of corporate defendants based on 

their active involvement in business affairs and evidence showing some knowledge of deceptive 

practices); FTC v. Partners in Health Care Ass’n, Inc., 189 F. Supp. 3d 1356, 1367-68 (S.D. Fla. 

2016) (individual defendant named in action brought against deceptive seller of medical discount 

card liable for actions of corporate defendants because individual had authority to control seller’s 

day-to-day activities and was aware of underlying deceptive practices). 

2. The Balance of Equities Strongly Favors Injunctive Relief 

Once the FTC has shown a likelihood of success on the merits, the Court must balance 

the equities, giving greater weight to the public interest than to any of Defendants’ private 

138 Florida and Pennsylvania regulators interviewed Dorfman in connection with a 2017 

investigation of Defendants. PX 1, Menjivar Dec. ¶ 75 and p. 570. 

139 PX 31, Seraphin Dec. ¶ 24. 

140 Id. 

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concerns. See World Wide Factors, Ltd., 882 F.2d at 347; FTC v. World Travel Vacation 

Brokers, Inc., 861 F.2d 1020, 1029 (7th Cir. 1988). There is a strong public interest in halting 

Defendants’ fraudulent conduct and preserving assets for restitution. Defendants, by contrast, 

have no legitimate interest in continuing their scam. See World Wide Factors, Ltd., 882 F.2d at 

347 (“no oppressive hardship to defendants in requiring them to comply with the FTC Act, 

refrain from fraudulent representation or preserve their assets from dissipation or concealment”); 

see also IAB Mktg., 746 F.3d at 1233 (FTC met burden of showing that injunction would serve 

the public interest). The evidence demonstrates that Plaintiff is likely to succeed on the merits 

and that an injunction is necessary to ensure that Defendants do not continue their scheme while 

the case is pending. The requested TRO is therefore warranted. 

C. The Temporary Restraining Order Should Include an Asset Freeze, 

Appointment of a Receiver, and Other Ancillary Relief 

The evidence shows that the FTC is likely to succeed in showing that Defendants violated 

the law, and the balance of the equities is in the FTC’s favor. The FTC therefore requests that 

the Court issue a TRO that prohibits future law violations,141 preserves assets, and imposes a 

temporary receivership to ensure that the Court can grant effective final relief, including 

restitution, in this case.142 As noted above, such an order is well within the Court’s authority. 

1. An Asset Freeze Is Necessary to Preserve the Possibility of Providing 

Restitution to Defendants’ Victims 

The Eleventh Circuit has repeatedly upheld the authority of district courts under Section 

13(b) of the FTC Act to impose an asset freeze to preserve the possibility of consumer redress. 

See, e.g., IAB Mktg, 746 F.3d at 1234; Gem Merch. Corp., 87 F.3d at 469; U.S. Oil & Gas Corp., 

141 Specifically, the requested conduct prohibitions in the proposed TRO require only that 

Defendants comply with the FTC Act and the TSR. 

142 A proposed TRO has been filed concurrently with the FTC’s TRO application. 

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748 F.2d at 1433-34. Moreover, the Eleventh Circuit has recognized that the “FTC’s burden of 

proof in the asset-freeze context is relatively light.” IAB Mktg, 746 F.3d at 1234.143 As a result, 

courts in this District have frozen the assets of defendants in numerous FTC enforcement actions. 

See cases cited supra note 132. 

An asset freeze is necessary to ensure that funds are available for consumer redress. The 

need is especially pressing here given the magnitude of financial injury caused by Defendants’ 

scheme, which is responsible for over $150 million in consumer harm in the past three years 

alone. A freeze is also justified by the threat of asset concealment or dissipation. Defendants 

maintain bank accounts in Panama and the Dominican Republic to which they could easily 

transfer funds in the absence of an asset freeze.144 Moreover, as shown above, individual 

defendant Dorfman has spent millions of dollars in corporate funds to pay for his personal 

expenses, including over a million dollars in jewelry, hundreds of thousands of dollars on his 

wedding, and $368,000 at a Las Vegas casino. As the FTC is likely to succeed in showing that 

Dorfman is personally liable for restitution, the asset freeze should extend to his assets as well. 

See Gem Merch. Corp., 87 F.3d at 470 (upholding use of individual defendants’ assets for 

restitution). 

2. A Temporary Receiver Is Necessary to Preserve the Status Quo 

The FTC Act authorizes a district court to appoint a receiver to oversee a business. See 

U.S. Oil & Gas Corp., 748 F.2d at 1432; see also cases cited supra note 132. When a corporate 

defendant has used deception to obtain money from consumers, “it is likely that, in the absence 

143 The FTC is not required to present evidence that assets will be dissipated, “only show a 

concern that the Defendants’ assets will disappear.” FTC v. World Patent Mktg., Inc., 2017 WL 

3508639, at *17 (S.D. Fla. Aug. 16, 2017) (citing IAB Mktg. Assocs., LP, 972 F. Supp. 2d at 

1313 n.3). 

144 PX 5, George Dec. ¶ 37 (over $20 million in offshore transfers between March 2015 and 

April 2018). 

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of the appointment of a receiver to maintain the status quo, the corporate assets will be subject to 

diversion and waste” to the detriment of victims. SEC v. First Fin. Grp. of Tex., 645 F.2d 429, 

438 (5th Cir. 1981). 

Appointment of a receiver is particularly appropriate when, as here, pervasive fraud 

presents a strong likelihood of continued misconduct. A temporary receiver would prevent the 

destruction of documents and dissipation of assets as well as secure the sensitive consumer data 

that Defendants have collected. The risk of document destruction is especially high given 

Defendants’ history of lying to regulators about the existence of sales recordings as well as their 

practice of altering these recordings. A receiver could also assist the Court in assessing the 

extent of Defendants’ fraud, trace the proceeds of that fraud, and make an independent report of 

Defendants’ current and past activities to the Court. 

3. Immediate Access and Expedited Discovery Are Necessary to 

Preserve Evidence 

The proposed TRO would grant the temporary receiver and the FTC immediate access to 

the corporate defendants’ physical business premises to locate and to secure Defendants’ assets 

and documents pertaining to their business practices. Immediate access is critical to protecting 

evidence against destruction and ensuring that the Court can ultimately determine: (1) the full 

scope of Defendants’ law violations; (2) the identities of injured consumers; (3) the total amount 

of consumer injury; and (4) the nature, extent, and location of Defendants’ assets. The proposed 

TRO would also allow limited expedited discovery to aid in locating documents or assets and to 

assess Defendants’ compliance with the proposed TRO. Courts in this district have frequently 

granted this relief in similar cases. See cases cited supra note 132. 

From the inception of their scheme, Defendants have shown a willingness to mislead 

regulators and law enforcement in order to hide their illegal conduct. Defendants have, for 

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example, repeatedly lied to investigators about the existence of sales recordings and withheld 

information that they are legally obligated to disclose to state licensing authorities. Although 

Defendants are obligated to report all locations from which they operate to the Florida 

Department of Financial Services, they have disclosed only one of these three locations. In light 

of this and similar conduct, Defendants are unlikely to be forthcoming in discovery or take 

seriously their obligation to preserve records relevant to this case. 

D. The Temporary Restraining Order Should Be Issued Ex Parte 

To prevent Defendants from dissipating or concealing their assets, the requested TRO 

should be issued ex parte. An ex parte TRO is warranted when the facts show that immediate 

and irreparable injury, loss, or damage will occur before the defendants can be heard in 

opposition. See Fed. R. Civ. P. 65(b). As noted above, there is a serious risk that assets and 

evidence stemming from Defendants’ illegal activity will disappear if they receive prior notice. 

The blatantly deceptive nature of Defendants’ scheme presents a serious risk that Defendants 

will destroy documents and dissipate assets if given advance notice of Plaintiff’s motion.145 

Indeed, such behavior is likely in this case given the entirely fraudulent nature of Defendants’ 

business practices, their practice of regularly funneling large sums of cash overseas, and the steps 

they have taken to conceal their illegal conduct from law enforcement and regulators. 

145 Plaintiff’s Rule 65(b) Declaration of Counsel, filed contemporaneously herewith, describes 

the need for ex parte relief and cites cases in which defendants who learned of impending FTC 

actions withdrew funds, destroyed vital documents and fled the jurisdiction. Declarations of 

counsel provide an appropriate basis for granting ex parte relief. AT&T Broadband v. Tech 

Commc’ns, Inc., 381 F.3d 1309, 1319-20 (11th Cir. 2004). 

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V. CONCLUSION 

For the above reasons, the FTC respectfully requests that this Court issue the attached 

proposed TRO with asset freeze, appointment ofa receiver, immediate access, and other 

equitable relief, and require Defendants to show cause why a preliminary injunction should not 

issue. 

Dated: October 29, 2018 Respectfully submitted, 

ALDEN F. ABBOTT 

General Counsel 

ELIZABETH 

~ C. SCOTT, ~ Special Bar No. A5501502 

escott@ftc.gov; (312) 960-5609 

JAMES H. DA VIS, Special Bar No. A5502004 

jdavis@ftc.gov; (312) 960-5611 

JOANNIE WEI, Special Bar No. A5502492 

jwei@ftc.gov; (3 I 2) 960- 5607 

Federal Trade Commission · 

230 S. Dearborn Street, Suite 3030 

Chicago, Illinois 60604 

Telephone: (312) 960-5634 

Facsimile: (312) 960-5600 

Attorneys for Plaintiff 

FEDERAL TRADE COMMISSION 

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