On Wednesday, the Securities and Exchange Commission (SEC) charged a New Jersey-based healthcare company, Premier Healthcare Solution LLC (Premier), with fraudulently acquiring almost $4 million from a total of 130 investors by selling membership units within their company. Officially, the charges focused on violations of the anti-fraud provisions of federal securities laws.
According to the SEC, Premier was founded by Josiah David, formerly known as Dennis Lee. Under the latter name, David has multiple felony convictions in addition to other regulatory violations, according to the press release. His company, Premier, presents as a healthcare company that offers employers a “supplemental medical reimbursement plan.” The plan involves, “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 company turns a profit by selling memberships in Premier to investors.
The SEC alleged that Premier and David have “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.” Other allegations include that Premier misled investors about the status of their business model as patented or patent-pending, when in reality the U.S. Patent and Trademark Office denied their repeated applications. Finally, the SEC claimed that Josiah David intentionally deceived investors by failing to disclose and lying about his prior criminal and regulatory history.
The court complaint by the SEC was filed in the District of New Jersey Wednesday. The SEC is seeking “disgorgement of ill-gotten gains with prejudgement interest, civil penalties, and permanent injunctive relief.” The director of the SEC’s New York Regional Office, Richard R. Best, described that “investors deserve accurate and complete information about a business’s performance and assets, and about its key persons’ criminal or regulatory histories, if any.”
The SEC’s litigation will be led by Kenneth Byrne, Rhonda Jung, and Todd D. Brody who work at the New York Regional Office.
