$275 Million Medical Debt Scam Exposed

Baltimore, Maryland – A brazen and complex Ponzi scheme has been uncovered in the medical debt industry, with two men accused of defrauding investors of more than $275 million. Richard Shusterman, 50, of Highland Beach, Florida, and Jonathan E. Rosenberg, 44, of West Orange, New Jersey, have been indicted on charges of conspiracy and wire fraud.

According to the indictment, Shusterman and Rosenberg, along with co-conspirators Robert Feldman, 65, of Beach Haven, New Jersey, and Douglas A. Kuber, 53, of Livingston, New Jersey, operated a scheme in which they bought and sold consumer debt, including medical debt portfolios. The conspirators allegedly made fraudulent representations and omissions regarding purchase prices, collection results, and resale values of the debt portfolios.

The indictment alleges that Shusterman, Rosenberg, Kuber, and Feldman negotiated and agreed upon two different purchase prices for each IPI debt portfolio that hedge funds and other investors financed on behalf of ARS. The conspirators set higher purchase prices for the IPI debt portfolios ARS financed through hedge funds and other investors. IPI agreed to kickback the loan proceeds in excess of the true purchase prices to Rosenberg and Kuber.

“The indictment alleges that the defendants perpetrated a brazen and complex Ponzi scheme that defrauded investors of more than $275 million,” said U.S. Attorney Rod J. Rosenstein. “The defendants made false promises to investors and used the funds for their own personal gain.”

The indictment and guilty pleas were announced by U.S. Attorney Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Special Agent in Charge William Winter of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).

Shusterman and Feldman represented that IPI was a company that had experience in the field of medical accounts receivable, including their purchase, valuation, collection, and resale. Beginning on June 21, 2006, Shusterman and Feldman, through United Consulting and IPI, engaged in the business of buying and selling consumer debt, including medical debt portfolios.

The indictment alleges that the defendants’ scheme began in December 2006 and continued through June 2008, resulting in the purchase of over $4.1 billion in medical accounts receivable. The conspirators allegedly used the funds for their own personal gain, rather than making payments to investors as promised.