O.C. Man Who Hawked Bogus Investments In Treatments For Common Ailments Sentenced To Over 12 Years In Federal Prison

SANTA ANA, California – An Irvine man who ran a fraud scheme that raised well over $3 million from victims who thought they were investing in products that would treat childhood obesity and Type II diabetes was sentenced today to 151 months in federal prison.

Charles M. “Chuck” Davis, 57, was sentenced by United States District Judge Andrew Guilford. In addition to the prison term, Judge Guilford ordered Davis to pay $3,468,934 in restitution to 66 victims.

Following a seven-day last June, a federal jury found Davis guilty of two counts of mail fraud, seven counts of wire fraud and four counts of money laundering.

The evidence presented during the trial showed that Davis operated an investment scam involving the Newport Beach-based LifeRight Holdings, Inc. According to promises made by Davis, LifeRight 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, as well as royalties on products sold and an option to convert the investment into shares of LifeRight stock when the company began selling product. Davis took in approximately $2.5 million from 45 investors, who lost all of their money.

The second scheme involved a company called DT2, which purportedly offered a product to treat Type II diabetes. From 2009 until Davis was jailed in 2011, Davis raised approximately $900,000 from about 21 DT2 investors. Similar to the LifeRight scam, Davis diverted the investor funds to other companies and, instead of spending the money on DT2 business, Davis used the money to pay for high-end restaurants, expenses sustained by several girlfriends, spa treatments, cash withdrawals, and his civil and criminal defense attorneys. The victims in the DT2 also lost all of their money.

In both schemes, Davis never had a real product.

Davis has been in custody since September 2011, when his bond in this case was revoked after a judge found he was improperly soliciting money in the DT2 scheme.

The case against Davis was investigated by the Federal Bureau of Investigation.

Release No. 15-049