SEC Charges Healthcare Company and Its Founder with Multimillion Dollar Fraud
The Securities and Exchange Commission today charged a New Jersey-based healthcare company and its founder with fraudulently raising nearly $4 million from over 130 investors nationwide through the sale of membership units in the company.
According to the SEC’s complaint, since July 2017, Premier Healthcare Solution LLC and its founder, Josiah David (formerly known as Dennis Lee), an individual with felony convictions and an extensive history of regulatory violations, have been raising money from investors by selling them membership interests in Premier, a company that purported to offer employers a supplemental medical reimbursement plan. The SEC alleges that the plan consists of a tax exempt healthcare-related contribution from the employee to Premier, a loan from a lender to repay the employee’s contribution, and an insurance policy obtained by Premier payable at the employee’s death to repay the loan. The SEC’s complaint alleges that Premier and David defrauded investors by making misrepresentations about Premier having secured a bank loan necessary for its business plan to succeed, when, in fact, it had not done so and also making misrepresentations that the concept underlying Premier’s business model was either patent-pending or patented, when, in fact, the U.S. Patent and Trademark Office had repeatedly denied Premier’s applications. The complaint further alleges that David deceived investors by failing to disclose and lying about his prior criminal and regulatory history when he was known as Dennis Lee.
“Investors deserve accurate and complete information about a business’s performance and assets, and about its key persons’ criminal or regulatory histories, if any,” said Richard R. Best, Director of the SEC’s New York Regional Office. “We will vigorously pursue those who fail to provide this information to investors.”
The SEC’s complaint, filed in federal district court in New Jersey, charges Premier and David with violating the antifraud provisions of the federal securities laws and seeks disgorgement of ill-gotten gains with prejudgment interest, civil penalties, and permanent injunctive relief. The complaint also names two parties, Denis Joachim and Provision Corporation LLC, as relief defendants and seeks to recover from them investor monies they received from Premier.
The SEC’s investigation, which is ongoing, is being conducted by Kenneth Byrne, Rhonda Jung and Adam Grace, and the litigation will be led by Todd D. Brody, Mr. Byrne, and Ms. Jung of the New York Regional Office. The case is being supervised by Sanjay Wadhwa. The SEC acknowledges the assistance of the U.S. Department of Labor and the U.S. Attorney’s Office for the Eastern District of Louisiana.