The Securities and Exchange Commission has accused a Tustin, CA-based healthcare financing company with fraud and asked a federal judge to freeze the company's assets. Medical Capital Holdings, a subsidiary of Medical Capital Corp., and special holding company Medical Provider Funding Corp. VI are accused of misappropriating $18.5 million of the $77 million the two raised from investors.
According to the SEC, MCH promised its 700 investors that none of the $77 million would be used on administrative fees, but went ahead and did so, anyway.
The agency also asserts that MCH falsely claimed that no special holding companies affiliated with MPFC VI had defaulted or fallen behind on payments to investors. The month MPF made its investment offering, two special holding companies had begun to default on payments, and moreover, two have since defaulted or fallen behind on payments.
Originally, the judge granted the SEC's request to freeze the companies' assets, but then gave them a few days to respond to the request.
To learn more about this matter:
- read this Modern Healthcare piece [1] (reg. req.)
Links:
[1] http://www.modernhealthcare.com/article/20090721/REG/307219983/-1