Medical Capital Holdings' assets permanently frozen

A federal judge ordered Medical Capital Holdings, a Tustin, Calif., healthcare finance company, to remain under a receiver, along with its subsidiaries and affiliates, including Medical Capital Corp. and Medical Provider Funding VI. U.S. District Judge David Carter also permanently froze the assets of Medical Capital Holdings, its affiliates and two of its executives: CEO Sidney Field and Joseph Lampariello, president and chief operating officer.

The Securities and Exchange Commission has filed a fraud complaint alleging Medical Provider Funding VI paid $18.5 million to Medical Capital Corp. from $77 million raised from investors, despite a statement that money would not be used for that purpose. Regulators also allege Medical Provider Funding VI wrongly told investors no affiliated companies had defaulted on or fallen behind on payments.

Carter extended the receiver's control over Medical Capital after a two-week restraining order sought by SEC expired. According to a preliminary filing by the receiver, Medical Capital invested outside of healthcare in real estate, mobile telephone technology and the “Perfect Game,” a movie starring Cheech Marin. The film was collateral from a defaulted loan, according a request filed by Field and Lampariello to end the receivership and allow the companies, including seven additional subsidiaries, to file for Chapter 11.

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