Highland Resident Pleads Guilty To Securities Fraud In Connection With HelpMed, Inc., A Company He Owned
SALT LAKE CITY – Ryan Lynn Cook, age 35, of Highland, Utah, pleaded guilty Thursday morning in federal court to one count of securities fraud in connection with an investment scheme involving his company, HelpMed, Inc.
Cook was president and owner of HelpMed, a Utah company organized in April 2011 in Utah. He represented to potential investors that HelpMed provided medical recruiting services for medical facilities to hire temporary doctors and other medical providers.
According to a Felony Information filed Wednesday, Cook represented to potential investors that he was willing to sell a 10 percent ownership interest in his company through the issuance of company stock in exchange for $2 million. The Felony Information alleges that starting around February 2015 and continuing to May 11, 2015, Cook devised a scheme to defraud investors and took steps to execute the scheme through the use of materially false representations.
As a part of the his guilty plea Thursday, Cook admitted that he represented to investors that HelpMed earned approximately $3.8 million in revenue in January and February 2015, when in fact, HelpMed had no revenue. He represented there were more than 12,000 health care providers in HelpMed’s system ready to be connected with hospitals and clinics, when in fact, the system contained approximately 100 health care providers. He also represented there were more than 8,000 hospitals and clinics in the company’s system, when in fact, the system contained about five hospitals.
He also represented to potential investors that HelpMed’s software developer had signed a non-disclosure agreement with a senior official from the Department of Labor and was being paid $40,000 per month on the agreement, when in fact, there was no such agreement.
As a part of the plea agreement, Cook admitted sending an email in early March to potential investors containing an untrue statement of material facts with willful intent to defraud them saying, “We are continuing to grow more clients everyday so as jobs get filled new ones come in as hospital systems now have to use us to remain competitive . . . At our current rate we will hit more than 11,000 provider openings this year.”
Documents filed in court allege Cook directly solicited two investors and received approximately $2 million from about five individuals who invested in his scheme.
According to a complaint filed in the case, investors demanded Cook provide them access to HelpMed’s server. Once they obtained server access, associates of the investors determined there were not thousands of hospitals and doctors in the system, but only a few hospitals and a few dozen doctors.
According to the complaint, an investor confronted Cook about the lack of purported clients. Cook claimed the data had been moved from the server. Cook also told the investor that FBI agents had shown up at his door, that his office had been bugged and that his cell phone had been tapped by the federal government.
Cook was arrested on a federal warrant after a May 11, 2015, incident in the west desert. Cook drove to the west desert and called one of his investor victims claiming he was being followed, a person identified in the complaint as the “Software Developer” had been kidnapped by the government, and that the government had stolen his truck. Later, Cook asked the investor to come out to the west desert and take his (Cook’s) gun from him or he was going to do something drastic, according to the complaint. The investor called 911 and Cook was subsequently arrested.
As part of the plea agreement executed in court Thursday morning, federal prosecutors and Cook agreed to recommend the court impose a 24-month sentence to be followed by two years of supervised release. Cook agreed to pay restitution in the amount of $1,974,250 to the victims in the case. He also agreed to forfeit a 2015 Lexus RC; cash seized from a bank account; and real property located in Highland, Utah, in addition to a money judgment of $1,974,250. He acknowledged that the money, car, and property were proceeds of illegal conduct or helped to facilitate illegal conduct.
U.S. Magistrate Judge Dustin Pead, who presided at the change of plea hearing, set sentencing in the case for Sept. 9, 2015, at 2:30 p.m.
The case is being prosecuted by the U.S. Attorney’s Office in Salt Lake City and investigated by the FBI.