Charles M Davis, Bogus Investment Scheme, California 2023

SANTA ANA, California – An Irvine man who ran a fraud scheme that raised well over $3 million from victims who thought they were investing in products that would treat childhood obesity and Type II diabetes was sentenced to 151 months in federal prison.

Charles M. “Chuck” Davis, 57, was sentenced by United States District Judge Andrew Guilford. In addition to the prison term, Judge Guilford ordered Davis to pay $3,468,934 in restitution to 66 victims.

Davis was found guilty of two counts of mail fraud, seven counts of wire fraud and four counts of money laundering following a seven-day trial last June.

The evidence presented during the trial showed that Davis operated an investment scam involving the Newport Beach-based LifeRight Holdings, Inc. According to promises made by Davis, LifeRight was going to develop and use infomercials to market a product to combat child obesity.

Davis promised investors a 15 percent return in only 13 months, as well as royalties on products sold and an option to convert the investment into shares of LifeRight stock when the company began selling product. Davis took in approximately $2.5 million from 45 investors, who lost all of their money.

The second scheme involved a company called DT2, which purportedly offered a product to treat Type II diabetes. From 2009 until Davis was jailed in 2011, Davis raised approximately $900,000 from about 21 DT2 investors. Similar to the LifeRight scam, Davis diverted the investor funds to other companies and, instead of spending the money on DT2 business, Davis used the money to pay for high-end restaurants, expenses sustained by several girlfriends, spa treatments, cash withdrawals, and his civil and criminal defense attorneys.

The victims in both scams lost all of their money, with Davis never having a real product to back the investments.

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