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Post date: November 25 2013

A.G. Schneiderman Announces Agreement Shuttering Long Island Business That Falsely Claimed To Help Patients Locate Kidney Donors

Michael Goldstein, Owner Of Nephrologica, Required To Refund $6K To Man Who Sought Kidney For Ailing Mother

Schneiderman: My Office Is Committed To Protecting Vulnerable Consumers From Health Care Scams

NEW YORK - Attorney General Eric T. Schneiderman today announced that his office has reached a settlement with Michael T. Goldstein, founder, owner and Chief Executive Officer of Nephrologica, a Long Island company that falsely claimed to be able to help seriously ill people find living kidney donors for a fee. Goldstein and his company also offered financial rewards to potential kidney donors in violation of state and federal law. The settlement agreement requires Goldstein to provide complete refunds to victims of his scam. It further requires him to shut down the company, which was run out of his Nassau County home.

“There are more than 8,000 people waiting for kidney donors in New York State, and those patients and their loved ones must not be preyed upon in this manner," Attorney General Schneiderman said. “This scam artist has now been stopped, and my office will continue to seek to ensure that businesses that provide services to people with serious diseases conduct themselves with transparency and integrity.”

New York State and federal law prohibit paying a donor for a human organ. People in need of kidney transplants can register with the national waiting list managed by the United Network for Organ Sharing (UNOS), they may find donors via legitimate donor-matching organizations or they may seek out donors on their own. The average waiting time for a kidney can be up to five years. Those interested in donating their organs can register with the Donate Life Registry, which is managed by the New York State Department of Health. While no one may be paid for donating, donors may, by law, obtain reimbursement for their related expenses, including travel, lodging and lost wages. In addition, New York law prohibits false advertising and deceptive acts or practices in the conduct of any business.

Nephrologica, which also did business as the World Kidney Network, charged unlawful fees in exchange for sham assistance in locating living kidney donors. Nephrologica’s website boasted that it provided “the quickest, most efficient process to locate a living compatible donor (as little as two weeks in extreme cases),” “Healthy Living Compatible Donors,” and pre- and post-operative assistance. In fact, it provided none of these services. The company posted bogus ads and fake testimonials on Internet sites, luring consumers desperate to help their loved ones find a kidney.

Attorney General Schneiderman's Health Care Bureau launched an investigation into the company when a consumer called the bureau hotline and complained that he had paid $6,000 to Nephrologica for help locating a living donor for his mother, who was suffering from kidney disease, and that the company refused to give him a refund after months of failing to provide help. The out-of-state complainant first posted a message on an Internet bulletin board in July 2011 seeking help finding a kidney donor. The investigation showed that Goldstein, using a fake name, had replied to the man's post by email and falsely claimed that Nephrologica had been able to obtain a kidney donor for another client in just seven months, that it had coordinated and or assisted in the coordination of more than 2,000 transplants, that the transplant donors were living donors from more than 20 countries and that Nephrologica had been successful with 100% of the people who had come for help in finding a compatible donor. It found that Nephrologica had used fake references to dupe consumers. All the claims were fake.

The Attorney General’s investigation also revealed that, from 2009 to 2013, Nephrologica posted solicitations on various Internet sites seeking living kidney donors, promising that the company would cover all travel expenses and up to $10,000 in “missed work earnings.” Offers of compensation for an organ violate the law. Individuals from around the country and the world responded to these ads. In one instance, an individual from India wrote by email that he was willing to donate his kidney for his “financial problems.” Nephrologica’s response was to ask for his blood type, suggesting that Goldstein intended to purchase his organ.

As a result of the Attorney General’s investigation, Nephrologica agreed to cease doing business immediately in New York State and nationally. The settlement bars Goldstein from conducting or operating any business in New York that provides direct services, including assistance in locating kidney donors, to persons with health conditions for six years. Nephrologica has refunded the $6,000 payment to the complainant and has agreed to provide refunds to all other duped clients. Consumers with questions or who believe they were a victim of this fraud are encouraged to call the Attorney General’s Health Care Bureau Helpline at 1-800-428-9071. Under the settlement, Goldstein will also remit $5,000 to defray the costs of the Attorney General’s investigation.

The investigation of this matter was conducted by Assistant Attorney General Michael D. Reisman, with the assistance of Health Care Advocate Peter Panych and Investigator Bradford Farrell, under the supervision of Health Care Bureau Chief Lisa Landau, Executive Deputy Attorney General for Social Justice Alvin Bragg and First Deputy for Affirmative Litigation Janet Sabel.

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