Eight Utahns charged for $100 million dietary fraud scheme
Dec 14, 2022, 5:23 PM
FILE (Photo by Samuel Corum/Getty Images)
(Photo by Samuel Corum/Getty Images)
SALT LAKE CITY — A federal grand jury indicted multiple Utahns for their involvement in an online scheme selling nutraceutical, CBD, and dietary supplement products.
On Wednesday, the United States Attorney’s Office District of Utah announced that eight Utahns and one Washington resident are facing 18 counts of criminal activity, which are:
- one count of conspiracy to commit wire fraud,
- one count of conspiracy to commit bank fraud,
- one count of conspiracy to commit money laundering,
- six counts of wire fraud,
- five counts of aggravated identity theft,
- and two counts of money laundering, aiding and abetting.
According to the indictment, the nine defendants facing charges are:
- April Gren Bawden, 36, of Salt Lake County,
- Chad Austin Bawden, 43, of Salt Lake County,
- Makaio Lyman Crisler, 39, of Utah County,
- Phillip Gannuscia, 52, of Salt Lake County and Puerto Rico,
- Dustin Garr, 44, of Washington County,
- Barbara Jo Jackson, 69, of Utah County,
- Brent Goldburn Knudson, 42, of Utah County,
- Richard Scott Nemrow, 42, of Utah County,
- and Robert McKinley, 45, of Spokane, Washington.
The Sold Products
According to the indictment, each defendant engaged in fraud and money laundering conspiracies to obtain more than $100 million of credit and debit card processing from around January 2016 to April 2022.
“The scheme involved the sale of nutraceutical, CBD, and dietary supplement products to consumers through a number of websites and a call center operating in Utah,” the indictment states.
Each product was falsely advertised to provide health benefits like weight loss and treating seizures, cancers, and erectile dysfunction. Customers were also misled about the product’s effectiveness, fake celebrity endorsements, the price of the products, and the ability to return or refund the product.
“As a result of the misleading and fraudulent practices: consumers were enrolled in monthly subscriptions without their knowledge or consent; consumers were charged more than the advertised price for the product; consumers received and were charged for more product than they ordered; consumers were unable to obtain a refund for or to return the product; and consumers were upsold on other products when attempting to obtain a refund,” states the indictment.
Straw Owners, LLCs, and Accounts
The defendants are accused of using hundreds of sham LLCs run by “straw owners” that the defendants controlled.
Straw owners were people recruited and paid by the defendants to open the LCCs, checking accounts, and merchant processing accounts, according to the indictment.
The straw owners used their personal information to open these accounts and were paid approximately $250 to $350 a month to keep their accounts open but had no involvement in operating the businesses.
According to the indictment, the main LCCs used in the alleged scheme were:
- Envision Wellbeing, LLC (also known as My Wellness Rebound),
- Infinite Nutrasupp, LCC (also known as Infinite Improvement),
- Envision Wellbeing, LLC (also known as Pure Transformation Today)
- Divine Health, LLC (also known as Increased Wellness)
- Target Fulfillment LLC
- Energia LLC
- Control Marketing LLC
- Continental Orient LLC
The defendants allegedly used a call center named Total Client Connect, which is registered under Elite Business Resources LLC, according to the indictment.
It states the defendants used these LCCs to receive more than $100 million in illegal proceeds from the straw LLCs “for the purpose of furthering their business and for their own personal benefit, to including the purchase of homes, vehicles, a boat, and cosmetic surgery.”
The defendants also transferred more than $64 million to overseas accounts in foreign countries.
Because of the grand jury indictment, many of the bank accounts and the purchases made with the money were foreclosed.
