Medical Capital Sued for Perpetrating Ponzi Scheme
Medical Capital Holdings, Inc., Medical Capital Corporation, Medical Provider Funding Corp., Sidney Field, and Joseph Lampariello were sued by the Securities and Exchange Commission on August 3, 2009, for perpetrating an alleged Ponzi scheme.
Investigation by the securities litigation law firm of Chapman & Associates, LLC, determined that the Medical Capital principals and their accomplices sold over $2.2 billion of unregistered, non-exempt securities. The unregistered securities, in the form of notes and evidence of indebtedness, were sold to thousands of investors nationwide.
Chapman & Associates attorneys established that Medical Capital's most recent fraudulent offering totalled approximately $77 million. Of that amount, more than $18 million appears to have been converted by the organizers of the Medical Capital scheme. The remaining funds may have been distributed to earlier investors as "returns" on their investment, "in typical Ponzi scheme fashion," according to John S. Chapman, a securities attorney.
The Medical Capital organizers failed to disclose to their new investors that they had already defaulted on earlier Medical Capital loans, and that the investments were going to be used for payments to earlier investors.
The U.S. District Court for the Central District of California ordered the Medical Capital organizers to cease the sale of unregistered securities, froze the assets of Medical Capital, and appointed a receiver.
Chapman & Associates' investigation determined that the Medical Capital perpetrators used a network of broker-dealers to sell the unregistered notes to the public. "Those broker-dealers who negligently approved the sale of fraudulent securities to the investing public will be held accountable," said John Chapman. "Our law firm will vigurously pursue claims against those who had a duty to ensure the integrity of the marketplace, but turned a blind eye on the numerous irregularities and red flags surrounding the Medical Capital offering," said Chapman.
Chapman & Associates is preparing to take action on behalf of investors victimized by the "Medical Capital" scheme. If you lost money in that scheme, please contact us immediately.
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