Joseph J. Lampariello, former president of Medical Capital Holdings, Inc. (“Med Cap”), pleaded guilty on Monday to wire fraud and failure to file a tax return. Lampariello, who earned $6.2 million from the sales of Med Cap notes, faces up to 21 years in federal prison, and an order to pay $49 million in restitution, when he is sentenced.
Between 2003 and 2009, Med Cap raised almost $2 billion from investors, supposedly for the purchase of discounted medical receivables, such as unpaid healthcare bills, that Med Cap would then collect at full price. A court-appointed receiver, appointed in 2009, alleged that Med Cap had actually been operating a Ponzi-like scheme that had bilked $1 billion from more than 11,000 investors.
Lampariello and Med Cap’s former chief executive, Sidney Field, were sued by the Securities and Exchange Commission (“SEC”) for fraud, in connection with Med Cap’s last offering, Medical Provider Funding Corp. VI (“MedCap VI”). According to the Justice Department, Lampariello defrauded the MedCap VI note holders from August 2008 to June 2009.
The Justice Department claims that Med Cap’s investors were told their funds would be used to purchase account receivables and for general operating costs, when in fact, Lampariello and others, used investors’ funds to make Ponzi-type payments to earlier investors, to pay personal expenses, and to invest in more exotic ventures, such as owning a medical nuclear reactor, producing a movie about a Mexican little league team and a 115-foot yacht.
As a result of a massive number of investor lawsuits seeking to recover Med Cap losses, dozens of the independent broker-dealers that sold Med Cap notes, went out of business.
Investors nationwide who have been the victims of a Ponzi scheme, may contact the Florida securities arbitration lawyers at McCabe Rabin, P.A. for a free and confidential consultation by calling toll free at 877.915.4040 or by e-mail to email@example.com.