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Tennessee Holistic Wellness Business Owner Charged in $700K Ponzi Scheme

pexels-pixabay-163186-300x225The founder of a holistic wellness company in Tennessee was charged last week for allegedly scamming dozens of patients, financial institutions, and investors out of nearly $700,000.

Howard L. Young, 75, of Nashville, was charged with four counts of bank fraud, six counts of wire fraud, and aggravated identity theft. If convicted, he faces a fine of up to $1 million and up to 30 years in prison. The press did not name an attorney for him.

According to the charging documents, Young founded a holistic wellness center called Integrative Medical Services (IMS) in 2015. He reportedly titled himself as a Doctor of Naturopathy, even though he did not hold a medical doctorate or medical license.

In 2017, Young allegedly began soliciting cancer patients and investors by telling them that he had received a $2 million grant from Vanderbilt University to study patients with cancer and other chronic medical conditions. He claimed the university gave him the grant because he had managed to cure his cancer using naturopathy, the charging documents allege. Young reportedly promised patients who agreed to participate in the study regular blood testing, nutritional supplements, gym memberships, nutrition and exercise coaching, acupuncture, and massages.

In order to become participants, he allegedly told patients that the university required an upfront payment of $10,000, but the money would be refunded after one year. Patients who couldn’t afford the upfront payment were required to secure a Health Credit Services (HCS) account or a CareCredit credit card—services designed to help patients pay for medical treatments by opening a line of credit or providing unsecured loans that must be paid through monthly installment payments.

Young purportedly told the patients that he would hold the upfront payment in escrow and make the required monthly payments and pay off any remaining balances at the end of one year, as long as the patient followed all of the study’s protocols.

In reality, neither Young nor IMS had received any grants from Vanderbilt, the charging documents claim. His alleged representations that IMS had received a grant were false and were meant to encourage patients to sign up for and obtain credit and loan accounts with various financial institutions, trick investors into funding his fraudulent scheme, and convince his employees to help him solicit new patients to participate in the study.

Young reportedly did not hold the money in escrow; he instead used the funds for his own personal use, made payments to his personal credit cards, and made the minimum required payments to his patients’ credit and loan accounts. To conceal the alleged fraud scheme, Young allegedly changed the mailing addresses of his patients’ accounts at HCS and CareCredit so that the monthly account statements went to a postal address he controlled.

The patients who signed up to participate in the fictitious study allegedly did not routinely receive the promised benefits; they did not receive any coaching, gym memberships, nutritional supplements, or massages and acupuncture as promised.

IMS generated little to no revenue and the majority of the company’s funds were deposits from credit and loan accounts. By mid-2019, Young had received roughly $669,470 through the alleged fraud scheme, according to the charging documents.

Bank fraud refers to the use of deception to obtain funds held by a financial institution. It is a broad term that covers many different scenarios and can carry charges ranging from misdemeanors to felonies. Due to the seriousness of a bank fraud allegation, it is imperative for anyone accused of this offense to consult an experienced fraud defense attorney.

South Florida Fraud Defense Attorney

Are you accused of committing financial crimes in South Florida? Contact Brian Silber, P.A. to set up a free initial consultation with one of South Florida’s most experienced fraud defense attorneys.

Source: 10.26.20 Holistic wellness business founder charged in ponzi scheme.pdf

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