Longtime Fugitive Gets Prison for Running Van Nuys-Based Billing Scam

A man who co-ran a San Fernando Valley-based "work- at-home" telemarketing fraud scheme was handed a 6 1/2-year federal prison term for conning thousands of victims out of more than $16 million.

Matthew Craig Rubin, 46, was sentenced Monday by U.S. District Judge R. Gary Klausner, who ordered him to pay a $16 million judgment obtained for his victims by the Federal Trade Commission.

Rubin -- along with his younger brother, Andrew -- ran Medicor, a Van Nuys-based marketing company that used false claims to deceive customers into buying software to operate home-based medical billing businesses, according to the U.S. Attorney's Office.

Medicor placed advertisements in the classifieds section of numerous publications, promising that $20 to $40 an hour could be made from home by helping doctors submit bills to insurance companies.

Between July 1999 and March 2001, Medicor sold more than 30,000 Kwic- Claim Medical Billing Software packages for roughly $400 each, but only 65 people were actually able to successfully use the software, according to federal prosecutors.

Matthew Rubin also set up National Business Information Systems, which functioned solely as a reference for Medicor. Following a script, Medicor employees referred potential Medicor customers to NBIS, according to prosecutors.

In September 2005, Matthew Rubin pleaded guilty to two counts of money laundering and one count of witness tampering, admitting that he laundered the proceeds of a telemarketing fraud scheme through foreign bank accounts. He also admitted that he persuaded the former controller of his company to lie in the FTC case against him and his company.

In 2006, Andrew Rubin pleaded guilty to two counts of money laundering related to the telemarketing fraud scheme and, in 2007, was sentenced to three years in prison and three years of supervised release.

Klausner sentenced 44-year-old Andrew Rubin to another year in prison two weeks ago for violating the terms of his supervised release.

In 2001, the FTC lodged a civil lawsuit against Medicor and the Rubins in U.S. District Court in Los Angeles.

During the litigation, Rubin convinced Medicor's controller to lie for him so that he would be excluded from a federal court injunction and asset freeze order. Free from the asset freeze, Rubin wired his fraud proceeds from New Zealand to the U.S. and withdrew $665,000 in $100 bills from his bank account, federal prosecutors said.

In 2002, the FTC prevailed, and a federal judge ordered Medicor and the Rubins to pay more than $16.5 million. Just before he was to be sentenced, Matthew Rubin was arrested in Arizona on suspicion of committing another fraud.

After his release on bond, Matthew Rubin fled to Mexico, where he remained a fugitive for more than five years. With the assistance of the U.S. Postal Inspection Service and the Mexican government, he was returned to the United States last year.

—from City News Service