June 21, 2024


Passion For Business

Healthcare Firm Charged With $4 Million Fraud

A healthcare company and its founder have been charged with defrauding investors of nearly $4 million by misrepresenting it had secured funding from a bank and failing to disclose the founder’s criminal history.

The U.S. Securities and Exchange Commission said Josiah David pitched Premier Healthcare Solution to investors as offering a medical insurance reimbursement plan that would provide them with an “outstanding” return on their investment.

But Premier “lied to prospective investors that it had already cemented a relationship with a bank, when it had not done so,” the SEC said in a civil complaint, and David allegedly failed to disclose he had been convicted of fraud and failing to register a business when he was known as Dennis Lee.

From at least July 2017, Premier has raised about $3.9 million by selling membership units to about 131 investors, the complaint said.

“Investors deserve accurate and complete information about a business’s performance and assets, and about its key persons’ criminal or regulatory histories, if any,” Richard Best, director of the SEC’s New York Regional Office, said in a news release.

According to the SEC, David’s criminal history goes back to 1990, when he was convicted of failing to disclose information in a marketing plan, and by 2005 he had been sanctioned in numerous states for “making a living as a pseudoscientist traveling around the country marketing fake technologies.”

In 2013, David began working for Total Financial, which purported to offer a reimbursement plan covering employees for medical expenses not covered by their employer-provided health insurance. Amid a federal investigation of the company, he left to form Premier in June 2017.

Premier’s business model consisted of a tax-exempt contribution from the employee to Premier, a loan from a lender to repay the contribution, and an insurance policy obtained by Premier payable at the employee’s death to repay the loan.

The SEC said Premier misrepresented that a Minnesota bank wanted to participate in a $150 million loan and David finally disclosed in January 2021 that the company had no banks committed to the program.

After an investor learned of David’s history, he allegedly responded that it was “not real relevant to the project at hand.”

insurance reimbursement, Josiah David, Premier Healthcare Solutions, U.S. Securities and Exchange Commission