Scum of the Earth Alert! An Irvine man has been convicted of running a scam that raised about $3.3 million from people who thought they were investing in products that would treat childhood obesity and Type II diabetes.
Charles "Chuck" Davis, 57, was found guilty in U.S. District Court Judge Andrew Guilford's Santa Ana courtroom Monday of two counts of mail fraud, seven counts of wire fraud and four counts of money laundering. Guilford could send Davis to prison for 240 years at sentencing scheduled for Oct. 20.
Davis, who has already been in custody since September 2011, operated an investment scam involving Newport Beach-based LifeRight Holdings, Inc. Claiming he was going to develop and use infomercials to market a product to combat child obesity, Davis promised investors a 15 percent return in only 13 months, royalties on products sold and an option to convert the investment into shares of LifeRight stock.
But Davis really used more than $2.4 million he raised from about 40 victims in 2007 and 2008 on personal expenses–as well as on legal fees in lawsuits brought against him.
Davis then had the gall to launch a second fraud scheme, this one involving a company called DT2 that he claimed offered a product to treat Type II diabetes. From 2009 to 2011, Davis raised more than $900,000 from about 25 DT2 investors. He then used the money to pay for high-end restaurants, expenses sustained by several girlfriends, spa treatments, cash withdrawals, his civil and criminal defense attorneys and for his other companies.
The FBI investigated and threw the book at Davis, which, surprisingly, he didn't pick up and sell to some sap as a diet book.