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Friday, December 8, 2023 | Back issues
Courthouse News Service Courthouse News Service

SoCal Nursing Home Called a Boondoggle

LOS ANGELES (CN) - A health management company defrauded investors of more than $1 million for a nursing home that was never built, two dozen plaintiffs claim in a federal lawsuit.

Dr. Arvind Mehta et al. sued Meridian Fontana Group, Meridian Health Services Holding Inc. and Meridian principal James Preimesberger, of Los Angeles.

Alleging fraud, securities fraud and conversion, Mehta et al. say they invested $1.8 million in memberships in a proposed 105,000-square-foot nursing home in Fontana, near a Kaiser hospital.

Preimesberger promised they would see 6 percent returns even before the two-story nursing home was to be unveiled in the summer of 2012, and 12 percent returns after that, according to the complaint.

But the plaintiffs say he never even bought the land for the place.

Meridian and Preimesberger expected to sell 10,000 membership shares, but sold only 3,600 units, and though Preimesberger had promised to sell the remaining shares or buy them himself, that did not happen, the investors say.

They claim he never bought the land in Fontana, never built the nursing home, and owes them more than $1 million, plus interest.

Nor did Preimesberger inform them that so many memberships remained unsold, the investors say: he bought time for himself by sending monthly distribution checks.

When the investors learned the truth, they say, they asked for their money back, but Preimesberger gave them only a partial refund.

"Further, plaintiffs are informed and believe that defendants have transferred assets to other entities and people, including plaintiffs' money, in a transparent effort to hide or shield the very assets from which plaintiffs are entitled to recover," the complaint states.

The investors want an accounting and at least $1 million in damages and an end to Preimesberger and his companies' "shell game and mocking disregard for the rule of law."

They are represented by Tony Buchignani.

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