CRIME

Eight Utahns charged for $100 million dietary fraud scheme

Dec 14, 2022, 5:23 PM
FILE (Photo by Samuel Corum/Getty Images)...
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.

KSL 5 TV Live

Top Stories

Crime

Saginaw Police K9 Cigan sits behind a table with evidence found inside a stolen car. (WNEM)...
Anna Kathman

Stolen vehicle, multiple drugs located by Michigan K9 officer

Saginaw Police said two suspects are behind bars after a stolen vehicle was located during a traffic stop by a K9 officer.
19 hours ago
FILE...
Michael Houck

Utah juvenile services staff member arrested for sexually abusing housed juvenile

A man who worked in a Utah juvenile services facility was arrested for frequently sexually abusing one of the facility's juveniles.
19 hours ago
The Wasatch County Sheriff's Office and Jail in Heber City is pictured on Friday, March 12, 2021. (...
Brooke Williams

Heber man surrendered with firearm after hours-long SWAT barricade

A man in Heber City was barricaded by SWAT and police officers after he made threats while intoxicated, intending bodily harm with a firearm.
19 hours ago
A 29-year old woman has been arrested after allegedly posing as a teenager and attending classes at...
Kiely Westhoff and Zoe Sottile, CNN

29-year-old woman posed as high school teen facing charges in New Jersey, police say

A 29-year-old New Jersey woman is facing charges over claims she used false government documents in a ploy to pose as a teenager at a high school, according to police.
19 hours ago
Former longtime Murray Mayor Dan Snarr is photographed on Dec. 13, 2013. Snarr, 73, was charged Thu...
Pat Reavy

Former Murray mayor accused of spitting in driver’s face in road rage case

The former longtime mayor of Murray has been charged with spitting in the face of another driver during a road rage incident.
2 days ago
Handcuffs in a jail cell FILE PHOTO (Ravell Call/Deseret News)...
Pat Reavy

Sandy man threatened to kill parents after shooting TVs, police say

A Sandy man was charged Friday with shooting two televisions and threatening to kill his parents and go on a killing spree.
2 days ago

Sponsored Articles

Fiber Optical cables connected to an optic ports and Network cables connected to ethernet ports...
Brian Huston, CE and Anthony Perkins, BICSI

Why Every Business Needs a Structured Cabling System

A structured cabling system benefits businesses by giving you faster processing speeds and making your network more efficient and reliable.
notebook with password notes highlighted...
PC Laptops

How to Create Strong Passwords You Can Actually Remember

Learn how you can create strong passwords that are actually easy to remember! In a short time you can create new ones in seconds.
house with for rent sign posted...
Chase Harrington, president and COO of Entrata

Top 5 Reasons You May Want to Consider Apartment Life Over Owning a Home

There are many benefits of renting that can be overshadowed by the allure of buying a home. Here are five reasons why renting might be right for you.
Festive kitchen in Christmas decorations. Christmas dining room....
Lighting Design

6 Holiday Decor Trends to Try in 2022

We've rounded out the top 6 holiday decor trends for 2022 so you can be ahead of the game before you start shopping. 
Happy diverse college or university students are having fun on their graduation day...
BYU MBA at the Marriott School of Business

How to Choose What MBA Program is Right for You: Take this Quiz Before You Apply!

Wondering what MBA program is right for you? Take this quiz before you apply to see if it will help you meet your goals.
Diverse Group of Energetic Professionals Team Meeting in Modern Office: Brainstorming IT Programmer...
Les Olson

Don’t Let a Ransomware Attack Get You Down | Protect Your Workplace Today with Cyber Insurance

Business owners and operators should be on guard to protect their workplace. Cyber insurance can protect you from online attacks.
Eight Utahns charged for $100 million dietary fraud scheme