SANTA ANA, California – An Irvine man was found guilty today of running a fraud scheme that raised about $3.3 million from victims who thought they were investing in products that would treat childhood obesity and Type II diabetes.
Charles “Chuck” Davis, 57, was found guilty today of two counts of mail fraud, seven counts of wire fraud and four counts of money laundering
The evidence presented during a seven-day trial showed that Davis operated an investment scam involving the Newport Beach-based LifeRight Holdings, Inc. According to promises made by Davis, LifeRight was going to develop and use infomercials to market a product to combat child obesity. Davis promised investors a 15 percent return in only 13 months, as well as royalties on products sold and an option to convert the investment into shares of LifeRight stock when the company began selling product.
But investor funds – more than $2.4 million raised from about 40 victims in 2007 and 2008 – were actually used to fund Davis’ personal expenses and legal fees in lawsuits brought against him.
The second scheme involved a company called DT2, which purportedly offered a product to treat Type II diabetes. From 2009 to 2011, Davis raised more than $900,000 from about 25 DT2 investors. Similar to the LifeRight scam, Davis diverted the investor funds to other companies and, instead of spending the money on DT2 business, Davis used the money to pay for high-end restaurants, expenses sustained by several girlfriends, spa treatments, cash withdrawals, and his civil and criminal defense attorneys.
As a result of being convicted of the 13 felony counts, Davis faces a statutory maximum sentence of 240 years in federal prison when he is sentenced by United States District Judge Andrew Guilford on October 20.
Davis has been in custody since September 2011.
The case against Davis was investigated by the Federal Bureau of Investigation