This case was last updated from PACER on 09/24/2021 at 07:17:54 (UTC).

Securities and Exchange Commission v. Biogenic, Inc. et al

Case Summary

On September 23, 2021, Securities and Exchange Commission (“SEC” or “Plaintiff”), represented by Christian Schultz and Steven F. Fishman, attorneys at SEC’s DC regional office, filed a civil enforcement action against Biogenic, Inc., Diagnostic Link Ltd, LLC, Vital Systems Ltd LLC, BioTek Holdings LLC, Tek Wellness Inc. (collectively, “the Biogenic Entities”), Capital Care management LLC (“Capital Care”), Susann Ashley Cargnino, Zachari Alan Cargino, Julie Ann Youssef and Gary Youssef (collectively, “Defendants”). Plaintiff filed suit seeking injunctive relief and other relief along with payment of civil penalties for the alleged illegal investment contract created and fraud committed by Defendants. This case was filed in the U.S. District Court in the Eastern District of Michigan with Judges Matthew F. Leitman and David R. Grand presiding.

 

In the complaint Plaintiff alleged that, “This is an illegal investment contracts case. Beginning no later than June 2017, and continuing through at least March 2021, Defendants defrauded more than 55 investors out of nearly $7 million through sales of bogus investment contracts for a supposed “World-Class” and “Life Saving” medical device that “performs comprehensive neuropathic cardiovascular diagnostics.”

 

Plaintiff further alleged that, “Working under the name of Vital Systems, Biogenic, or one of the other Biogenic Entities, Julie Youssef, Gary Youssef, Susan Cargnino, and Zach Cargnino directly or indirectly offered and sold to investors an investment contract involving a medical testing device that purportedly had been manufactured by one of the Biogenic Entities, which these individuals and the Biogenic Entities claimed would provide investors with $250 of “passive income” every time the device was used in a doctor’s office.”

 

Plaintiff also alleged that, “Likewise, no investors appear to have ever received any money from the actual use of one of Defendants’ devices much less anywhere close to the $10,000 per month described by Defendants in their offering communications. Rather, the purported “passive income” that investors received from their investment contracts came not from a doctor’s use of a device but rather from Ponzi payments that Zach Cargnino or Susan Cargnino sent using money received by one of the Biogenic Entities from new investors’ purchases of investment contracts. Indeed, at least one investor received purported “usage” revenue payments from Zach Cargnino out of money that the investor had himself paid to purchase additional investment contracts from Defendants.”

 

There are five claims for relief laid down by Plaintiff. The first, third, and fourth claims are for the alleged violation of Section 5(a) and (c) [15 U.S.C. § 77(a) and (c)], Section 17(a) [15 U.S.C. § 77q(a)] and Section 17(a)(3) [15 U.S.C. § 77q(a)] of the Securities Act. The second claim is for the alleged violation of Section 10(b) of the Exchange Act and Rule 10b-5 [15 U.S.C. § 78j(b) and 17 C.F.R. § 240.10b-5]. The fifth claim is for the alleged violation of Control Person Liability Under Section 20(a) of the Exchange Act [15 U.S.C. § 78t(a)].

 

In its prayer for relief Plaintiff has requested the court to permanently enjoin Defendants and file an order against each Defendant for disgorgement of any and all ill-gotten gains, together with prejudgment and postjudgment interest. Plaintiff also requested the court for imposing civil penalties pursuant to Section 20(d) of the Securities Act and Section 21(d)(3) of the Exchange Act or any other relief that the court deems just and proper.

 

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Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    5:21-CV-12236

  • Filing Date:

    09/23/2021

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Finance - Security/Commodity/Exchange

Judge Details

Presiding Judge

Matthew F. Leitman

Referral Judge

David R. Grand

 

Party Details

Plaintiff

Securities and Exchange Commission

Defendants

Susann Ashley Cargnino

Zachari Alan Cargnino

Julie Ann Youssef

Gary Youssef

Biogenic, Inc.

Diagnostic Link Ltd, LLC

Vital Systems Ltd LLC

BioTek Holdings LLC

Tek Wellness LLC

Susann Ashley Walker

Ashley Walker

Zach Alan

Julie Ann

Julie Joseph

Capital Care Management LLC

Gary Joseph

Attorney/Law Firm Details

Plaintiff Attorney

Christian Schultz

Attorney at Securities and Exchange Commission

100 F. Street, Ne

Washington, DC 20549

Defendant Attorney

Steven F. Fishman

615 Griswold, Suite 1125

Detroit, MI 48226

 

Court Documents

#3

(#3) ATTORNEY APPEARANCE: Steven F. Fishman appearing on behalf of BioTek Holdings LLC Diagnostic Link Ltd LLC, Vital Systems Ltd LLC, BioTek Holdings LLC, Tek Wellness Inc., Capital Care Management LLC, Susann Cargnino, Zachari Cargnino (Fishman, Steven) (Entered: 09/23/2021)

2 #4

Exhibit Signed Consent - Gary Youssef

2 #3

Exhibit Signed Consent - Julie Youssef

2 #2

Exhibit Proposed Judgment Gary Youssef

2 #1

Exhibit Proposed Judgment Julie Youssef

#2

(#2) MOTION to Approve Consent Judgment As to Liability Against Julie Youssef and Gary Youssef by Securities and Exchange Commission. (Attachments: #1 Exhibit Proposed Judgment Julie Youssef, #2 Exhibit Proposed Judgment Gary Youssef, #3 Exhibit Signed Consent - Julie Youssef, #4 Exhibit Signed Consent - Gary Youssef) (Schultz, Christian) (Entered: 09/23/2021)

#1

(#1) COMPLAINT filed by Securities and Exchange Commission against All Defendants with Jury Demand. No summons requested. No Fee Required - US Government. County of 1st Plaintiff: USA - County Where Action Arose: Lenawee - County of 1st Defendant: Lenawee. [Previously dismissed case: No] [Possible companion case(s): None] (Schultz, Christian) (Entered: 09/23/2021)

 

Docket Entries

  • 09/23/2021
  • View Court Documents
  • Docket(#3) ATTORNEY APPEARANCE: Steven F. Fishman appearing on behalf of BioTek Holdings LLC Diagnostic Link Ltd LLC, Vital Systems Ltd LLC, BioTek Holdings LLC, Tek Wellness Inc., Capital Care Management LLC, Susann Cargnino, Zachari Cargnino (Fishman, Steven) (Entered: 09/23/2021)

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  • 09/23/2021
  • View Court Documents
  • Docket(#2) MOTION to Approve Consent Judgment As to Liability Against Julie Youssef and Gary Youssef by Securities and Exchange Commission. (Attachments: #1 Exhibit Proposed Judgment Julie Youssef, #2 Exhibit Proposed Judgment Gary Youssef, #3 Exhibit Signed Consent - Julie Youssef, #4 Exhibit Signed Consent - Gary Youssef) (Schultz, Christian) (Entered: 09/23/2021)

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  • 09/23/2021
  • View Court Documents
  • Docket(#1) COMPLAINT filed by Securities and Exchange Commission against All Defendants with Jury Demand. No summons requested. No Fee Required - US Government. County of 1st Plaintiff: USA - County Where Action Arose: Lenawee - County of 1st Defendant: Lenawee. [Previously dismissed case: No] [Possible companion case(s): None] (Schultz, Christian) (Entered: 09/23/2021)

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