Wednesday, March 2, 2016

San Diego MedTech Consultant Pleads Guilty to Defrauding Investors by Selling Fake Stock in Medical Research Company

Health care investment fraud is on the rise. On February 16, 2016, Oceanside businessman Greg Ruehle admitted to securities fraud (15 U.S.C. §§ 78j, 78ff) involving more than 160 people out of investments totaling nearly $2 million. As part of his plea to securities fraud charges, Mr. Ruehle admitted being hired by local medical research firm ICB International, Inc. (ICBI) to identify investors who could fund their research. 

Instead, Mr. Ruehle collected millions of dollars from investors and used the money for his own gambling and other personal expenses.  Mr. Ruehle disguised and concealed his fraud by issuing the investors fake stock certificates and failing to report the purported “investment” to the company. In a parallel action, the Securities and Exchange Commission today announced civil charges against Ruehle.  

In 2015, some of the investors asked for proof that their money was being used at ICBI.  In response, Ruehle sent them a letter on what appeared to be company letterhead, and purportedly signed by the company’s CEO.  In fact, the letter was a forgery, which was borne out by the fact that Mr. Ruehle misspelled the CEO’s name.  

ICBI remained unaware of these “investors,” and never received a penny of their $1.9 million investments. San Diego-based ICBI’s mission is to develop technologies to transport therapeutic treatments through the blood-brain barrier to treat neuro-degenerative diseases like Parkinson’s and Alzheimer’s disease.  Mr. Ruehle’s plea agreement requires that he forfeit the $1.9 million in proceeds and pay restitution to the victim investors.

Health care businesses and investors need to be vigilent about due diligence when investing in health care businesses. We have seen many investment disputes which were not properly documented and investors were not properly issued shares.


DISCLAIMER: Green & Associates' articles and blog postings are prepared as a service to the public and are not intended to grant rights or impose obligations. Nothing in this website should be construed as legal advice. Green & Associates' articles and blog postings may contain references or links to statutes, regulations, or other policy materials. The information provided is only intended to be a general summary. It is not intended to take the place of either the written law or regulations. We encourage readers to review the specific statutes, regulations, and other interpretive materials for a full and accurate statement of their contents and contact their attorney for legal advice. The primary purpose of this website is not the commercial advertisement or promotion of a commercial product or service and this website is not an advertisement or solicitation. Anyone viewing this web site in a state where the web site fails to comply with all laws and ethical rules of that state, should disregard this web site.

The information provided on this website is for informational purposes only. It is not intended to create, and does not create, a lawyer-client relationship with Green & Associates, Attorneys at Law. Sending an e-mail to Tracy Green does not contractually obligate them to represent you as your lawyer, or create any type of client relationship. No attorney-client relationship will be formed absent a written engagement or retainer letter agreement signed by both Green & Associates and client and which specifies the scope of the engagement.

Please note that e-mail transmission is not secure unless it is encrypted. E-mail messages sent to Ms. Green should not include confidential or sensitive information.