Friday, July 25, 2014

California Man Pleads Guilty In Investment Schemes That Defrauded Physicians And Dentists Out Of More Than $2 Million

On July 21, 2014, David W. Rose, 57, of Orange County, pleaded guilty in United States District Court to one count of wire fraud and one count of mail fraud arising from defrauding dozens of doctors and others of more than $2 million in separate schemes that promised large returns on investments in the medical and dental fields.

According to court documents, over a six-year period that ran through May 2011, Mr. Rose solicited physicians to invest in an Irvine company he called M.D. Venture Partners (MDVP) and falsely promised lucrative returns on investments in emerging medical technologies. In a subsequent scheme, Mr. Rose used Technology Innovation Partners (TIP) to solicit dentists and orthodontists to invest, claiming funds would be pooled and invested in a company developing ablation technology that would be used to remove wisdom teeth in children without surgery.

Throughout both schemes, investor funds were misused, with Mr. Rose using victims’ money for personal expenses. According to a plea agreement filed in court, Mr. Rose used investor funds to pay $7,500-a-month rent for a house in Coto de Caza, college tuition, luxury vehicles, an $80,000 Sea Ray boat and shares in the Green Bay Packers.
The investigation revealed that no money was invested by either MDVP or TIP.
In the MDVP scheme, Mr. Rose caused approximately 32 victims to lose more than $900,000, according to court documents. In the TIP scheme, 45 victims lost more than $1.4 million. Mr. Rose was arrested in May 2013 and has remained in custody since that time.

Mr. Rose pleaded guilty before United States District Judge James V. Selna, who is scheduled to sentence the defendant on November 24. At sentencing, Mr. Rose has agreed there will be an enhancement since there were more than  50 victims. Under the plea agreement, Mr. Rose waives his right to appeal if the sentence is no more than the low end of level 23 on the federal sentencing guidelines (level 23 is 46 to 57 months).  

Thus, his likely sentence is around 4 to 5 years even thought Judge Selna is free to depart from the plea agreement as it is not binding upon him. The statutory maximum sentence of 40 years in federal prison and this shows that the sentencing maximum is not reflective of the actual sentence to be imposed. The government agreed to a one level departure due to Mr. Rose's efforts in helping secure restitution which is estimated over $2.3 million.

Posted by Tracy Green, Esq.

Phone: 213-233-2260


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