Medical Device Promoter Ordered to Stop Investment Offering
Texas Securities Commissioner Travis J. Iles took emergency action on March 7 to stop Randall Johnson, the president of a Georgetown wellness company, from fraudulently offering investments in a machine that Johnson claims to be “the most advanced early screening system” for primary care physicians.
Johnson is the president of Advanced Wellness Services LLC, which does business as WellnessTech Health. Johnson is offering Texas residents the opportunity to pay $50,000 for an investment tied to the screening equipment, which he variously refers to as the PS-8X, the WellnessTech System, and the WellnessTech Screening System.
Johnson is the vice-president of marketing at Personalized Healthcare Solutions LLC, a Brentwood, Tenn., company that supposedly manages and services the screening equipment. He is also president of Recovery Management International, a debt collection company in Georgetown.
The order alleges that Johnson is selling unregistered securities, making misleading statements and unsubstantiated claims about the screening equipment and the companies, and has tried to obstruct the State Securities Board investigation.
According to the Emergency Cease and Desist Order, Johnson is telling individuals that the investment will return 20% per year over two years, with the returns paid monthly.
On top of that return, Johnson is representing that Advanced Wellness pays an investor $5 each time a medical facility uses the WellnessTech System. These payments can total between $15,000 and $18,000 per year over a term of five years, according to Advanced Wellness.
The Enforcement Division notified Johnson on Feb. 19 that the WellnessTech investments were securities and subject to regulation. Nonetheless, Johnson continued to offer the investments, according to the order.
Johnson met with the Enforcement Division on Feb. 28. Shortly after the meeting, he sent an email to the director of the Enforcement Division, writing that he would “cease and desist offering investments tied to medical devices, such as [the] WellnessTech System….”
“The communications were a sham,” according to the order. That same day, Johnson “again illegally offered investments tied to the WellnessTech System” and continues to do so.
Johnson is touting the device as a way for physicians to test for “8 critical risk factors with a 10-minute, non-invasive test.”
According to the order, Johnson is not disclosing to investors any financial information about Advanced Wellness and its ability to pay 20% annualized returns over two years. Johnson identifies the company as a limited liability company, but it is not registered with the Texas Secretary of State.
Johnson is also not disclosing any information that backs his claim that a medical facility will use the WellnessTech System to test between 250 and 300 patients per month.
Johnson, Advanced Wellness Services, and Recovery Management International have 31 days to challenge the order at the State Office of Administrative Hearings.