L.A. Health Firm|Accused of Fraud

LOS ANGELES (CN) – In a “brazen fraud,” Meridian Health Services “swindled and cheated” 70 investors out of $14.5 million, the investors claim in court.
     Lead plaintiff Lingagoud Memula sued Meridian Health Services Holdings, its founder and CEO James Preimesberger, et al. on April 17 in Superior Court.
     The investors claim Meridian induced them to buy preferred stock, corporate bonds and debentures to the tune of $14,585,639 from 2008 to 2011.
     Los Angeles-based Meridian said the money would be used to buy co-defendant defendant Foresight Management and to expand Meridian’s business, and promised investors “a substantial return,” according to the complaint.
     But the defendants “misappropriated the money and transferred the various business assets in an attempt to loot the entities and defraud the plaintiffs,” the investors say.
     They claim the defendants “oversold the preferred stocks, corporate bonds and debentures as a means of raising capital to pay off initial investors’ returns. Defendants Preimesberger and [attorney Keith] Simpson conspired to create an elaborate Ponzi scheme to defraud the plaintiffs by promising them huge returns without any real way to pay it back but for additional capital contribution from new stock, bond, note and debenture holders.”
     With the help of an accountant and their own legal knowledge, Preimesberger and Simpson created fake tax information and corporate records to hide the scam for several years, the complaint states.
     A receptionist for Meridian Health told Courthouse News on Monday there was no one available to speak about the case.
     Memula et al. seek an injunction, restitution, compensatory, treble and punitive damages for breach of contract, fraud, negligent misrepresentation, breach of fiduciary duty, RICO violations, conversion and business code violations.
     They are represented by George Braunstein with Braunstein & Braunstein, who did not respond to a request for comment.

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