Sidney M. Field, CEO of Medical Capital Holdings and who along with Medical Capital was sued last month by the Securities and Exchange Commission (SEC) for allegedly cheating investors out of millions of dollars in securities notes, faced similar fraud charges in the early 1990s. At the time, Field was the founder, past president and chairman of FGS, a large insurance broker.
According to an Aug. 24 story in the Orange County Register, Field supervised agents who allegedly employed a deceptive practice known as “sliming” to sell automobile insurance policies. In essence, the agents would alter accident records of questionable drivers, falsify information about car values and commute mileage so that an applicant could qualify for insurance coverage.
FGS also allegedly duped customers into paying interest rates of 21% to 40% when they financed their premiums, according to Aug. 24 story in The Register.
In August 1990, the Department of Insurance sued Field for civil racketeering and ultimately revoked his license. Field was sued again three years later – this time for fraud. He paid $100,000 to settle that lawsuit.
Investors in Medical Capital Holdings never knew about Field’s previous disciplinary actions with regulators, according to The Register story. If such information had been at their disposal, they never would have put their money and trust in Field or Medical Capital Holdings.
“If I would have known, forget about it,” said Jim Palladino. Palladino, who invested $160,000 in Medical Capital, says his broker told him that Medical Capital “was as solid as a rock.”
In February, Palladino stopped receiving checks from his Medical Capital notes. In August, he was forced to put his home up for sale and look for part-time work at the age of 73.
Another investor, Carol Marini, 64, placed her life savings of $145,000 with Medical Capital. Marini, a former school teacher, says she has lost everything.
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