On Jun. 14, DoJ charged venture capital fund for $8mn Ponzi.
- David Wagner and Marc Lawrence, were arrested on securities and wire fraud
charges stemming from their several corporate entities (known to as Downing).
- Defendants offered employee-investors the opportunity to get in on the ground
floor of a multi-million-dollar venture capital business, in healthcare start-ups.
- Wagner and Lawrence and others, solicited approximately $8mn in investment.
- Employees were required to make an investment of between $150k and $250k.
- Investors found out that Downing did not have access to millions in funding, had
almost no products to sell, and that employee-investors were source of funding.
- May 2016, even after several investors brought lawsuits, continued recruiting.
- The new investments were in a company called Cliniflow Technologies (Cliniflow).
- Cliniflow supposedly held majority ownership in same primary portfolio company as other Downing entities and was simply a new name used to solicit investments.
- Most of $1.5mn raised through Cliniflow was transferred to other Downing entities.