A Newport Beach-based businessman was convicted today of a $3.3 million investment scam for childhood obesity and Type II diabetes.
Charles Davis, 57, of Irvine, was convicted of two counts of mail fraud, seven counts of wire fraud and four counts of money laundering.
As Davis operated Newport Beach-based LifeRight Holdings Inc., he promised to develop and use infomercials to market a product for child obesity, according to Thom Mrozek of the U.S. Attorney's Office. The defendant promised a 15 percent return to investors in 13 months, royalties and an option to convert the investment into shares of the company stock, Mrozek said.
Davis used the $2.4 million he received from 40 victims in 2007-08 to pay for personal expenses and to help him fend off lawsuits against him, Mrozek said.
Davis also ran a scam involving a company that offered a product to treat Type II diabetes and raised more than $900,000 from about 25 investors from 2009-11, according to prosecutors.
Davis spent that money on expensive restaurants, girlfriends, spa treatments and attorneys' fees.
Davis, who could face up to 240 years in federal prison, was scheduled to be sentenced Oct. 20.
--City News Service