Coto de Caza Man Indicted for Operating Investment Schemes That Targeted Physicians and Dentists
|FBI Los Angeles April 19, 2013|
SANTA ANA—An Orange County man has been indicted by a federal grand jury on charges alleging he defrauded dozens of victims in separate schemes that promised large returns on investments in the medical field, announced Bill Lewis, Assistant Director in Charge of the FBI’s Los Angeles Field Office, and André Birotte, Jr., the United States Attorney in Los Angeles.
David Rose, 56, of Coto de Caza, was charged in an indictment filed Wednesday afternoon in United States District Court in Santa Ana with multiple counts of mail and wire fraud. The indictment outlines two schemes Rose allegedly operated beginning in or about March 2005 to the present. During this time, Rose owned and operated companies in Irvine, California, including M.D. Venture Partners LP (MDVP) and Technology Innovation Partners LP (TIP).
The indictment alleges that beginning in at least March 2005 and continuing through May 2011, Rose solicited physicians to invest in MDVP and falsely represented lucrative investment opportunities in emerging medical technologies. The defendant is alleged to have prepared a “private placement memorandum” that described MDVP and set forth how investor funds would be used. The agreement stated that a 2.5 percent management fee would be paid to the defendant.
In promotional materials and in conversations and e-mails with prospective investors, the defendant claimed that investor money would be pooled and used to invest in companies developing new medical technology, according to the indictment.
In fact, investor funds were not used in the manner set forth in the memorandum signed by investors; instead, the defendant used investor funds for personal expenses, including $7,500 a month to rent a house in Coto de Caza; tuition and other college fees for his children; $65,000 for vehicles used by himself and his family; jewelry; attorney fees; and other expenses. The investigation revealed that no money was ever invested in companies developing new medical technology. In the MDVP scheme, the defendant caused approximately 32 victims to lose more than $800,000, according to the indictment. The indictment further alleges that in a subsequent scheme, the defendant solicited dentists and orthodontists to invest money in TIP, claiming the money would be pooled and invested in a company developing ablation technology for the removal of wisdom teeth in children without surgery. The indictment alleges the defendant prepared a private offering memorandum describing TIP and how investor funds would be used. The agreement stated that a 10 percent management fee would be paid to the defendant. The investigation revealed that victim funds were not used for investments but, instead, for the defendant’s personal expenses, including $5,000 a month to rent a house in Coto de Caza; tuition and other college fees for his children; $80,000 for a Sea Ray boat; $40,000 for a GMC Acadia; a stock offering in the Green Bay Packers; and other personal expenses. No money was ever invested in a company developing ablation technology. The indictment alleges that the defendant caused approximately 45 victims to lose more than $1 million in the TIP scheme.
On Monday, FBI agents executed warrants and seized multiple bank accounts, vehicles, and the above-mentioned boat purchased by Rose with the proceeds of the alleged schemes.
A federal warrant for Rose’s arrest is outstanding.
This case is a continuing investigation by the FBI. Rose is being prosecuted by the United States Attorney’s Office in Orange County.
FBI Media Relations: 310 996-3343
United States Attorney’s Office: 213 894-6947