Joseph J. Lampariello, the former president and Chief Operating Officer of Medical Capital Holdings Inc., was sentenced to ten years in federal prison by U.S. District Judge David O. Carter. Additionally, Lampariello was ordered to pay nearly $40 million in restitution to investors.Medical Capital was a private placement that turned into a Ponzi scheme, destroying dozens of broker-dealers. The company was a medical receivables financing company that operated in southern California. Raising money through a network of independent broker-dealers, it oversaw funds that were meant to buy account receivables from accredited medical providers, made secured loans, and provided money for general operating expenses. For more than 11 months in 2008 and 2009 Lampariello misappropriated funds invested with one of the Medical Capital series of deals and used the money to pay himself administrative fees, according to the U.S. Attorney’s Office for the Central District of California. Through the company, Lampariello defrauded over 700 investors of almost $49 million, according to the office. Between 2003 and 2009, Medical Capital raised nearly $2 billion, supposedly to purchase discounted medical receivables, including unpaid doctor or hospital bills that Medical Capital would then collect at full price. “Mr. Lampariello’s sentence properly reflects the significant harm he caused to hundreds of victims,” said U.S. attorney Eileen M. Decker. “This defendant’s false promises were designed only to provide wealth for himself, and he must now pay for that greed.” Numerous independent broker-dealers sold the company notes and wiped out millions of dollars in investor funds. Brokers who sold them earned commissions of seven percent. Like other private placements, Medical Capital paid broker-dealers a due diligence fee of one percent. After the SEC charged Medical Capital with fraud in 2009, it took the company over. Then, the company owned a medical nuclear reactor, as well as two closed hospitals that had lost their operating licenses. It was also producing a movie about a Mexican Little League team. The company also owned a 115-foot yacht. If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-741-7503 to discuss your potential legal remedies or complete the contact form.