Santa Ana – An Irvine man was recently convicted of running a fraud scheme that generated approximately $3.3 million from victims investing in products that they believed would treat childhood obesity and Type II Diabetes.
According to the United States Attorney’s Office, Charles “Chuck” Davis, 57, was found guilty on Fri., June 20, of two counts of mail fraud, seven counts of wire fraud and four counts of money laundering. During the trial, Davis was shown to have operated an investment scam involving the Newport Beach firm, LifeRight Holdings, Inc. The company was to develop and use infomercials to market a product to battle childhood obesity. Davis promised his investors a 15 percent return in just 13 months, royalties on products sold, and the option to convert the investment into shares of LifeRight stock when the company began selling the products.
$2.4 million of the funds raised from about 40 victims in 2007 and 2008 were actually used to finance Davis’ personal expenses and legal fees from lawsuits brought against him.
Another scam involved DT2, a company that reportedly offered a product treating Type II Diabetes. Davis raised nearly $1 million from 2009 to 2011 from about 25 DT2 investors. Similar to the LifeRight scam, Davis diverted investor funds to other companies, and rather than spend the money on the business, he enjoyed high-end restaurants, spa treatments, cash withdrawals, the expense of several girlfriends, as well as civil/criminal defense attorneys.
Davis has been in custody since September 2011, and faces a statutory maximum sentence of 240 years in federal prison when he is sentenced on October 20.