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Thursday, June 13, 2013

IS BATTLE CREEK CHIROPRACTOR ROBERT BUCKHANNON MICHIGAN'S NEWEST "CON KING"? STEPHEN ANDERSON MIGHT VOTE YES.

Robert L. Buckhannon
Per Wickstrom's nephew, Stephen Anderson, didn't know what was about to hit him when he went into the bar business with Robert Buckhannon.

Read how Anderson, the Chief Financial Officer of  'A Forever Recovery', took a bath in Battle Creek courtesy of one crooked chiropractor.



In 2009, two years after graduating from Wayne State University with a degree in Finance, Per Wickstrom's nephew Stephen P. (the "P" stands for Per) Anderson was named to his current post at A Forever Recovery in Battle Creek, Michigan.

Anderson
In a press release that appeared in 2010 on Cambridge Who's Who (you're a "who who" if you pay them a couple grand for the listing), Anderson stated that he was "proud to lend his talents to A Forever Recovery in Battle Creek, Michigan". He described his management duties, including accounts payable and receivable, credit card transactions and purchase orders. Anderson's future goals included becoming "more actively involved in the rehabilitation work provided by the facility", and looking forward to pursuing a master's degree in drug rehabilitation in an effort to play on hands-on role in the recovery process.

Something tells your girl Miss Fortune that Little Stephen should have studied financial chicanery at the feet of his Uncle Per Wickstrom instead of financial management at WSU.  

That homework might have prepared him for his tangle with the crooked chiropractor, Dr. Robert L. Buckhannon. 

A BIKE, A TRUCK...AND PERMANENT DISABILITY?

While living in Colorado in March of 1990, Buckhannon was riding a bicycle and claimed a U.S. West truck swerved into his path. Although he was not struck by the vehicle, court documents state Buckhannon claimed to have injured his shoulder and knee in avoiding a collision. Buckhannon then filed a claim with U.S. West, who was self-insured, for no-fault (PIP) benefits and also filed a claim for benefits with his disability insurance carrier, Monarch Life Insurance Company.

When U.S. West refused to pay the PIP benefits, the matter went before an arbitration panel in March of 1991. Buckhannon testified at the hearing as to the circumstances of the incident and his alleged inju­ries. His then girlfriend who had witnessed the incident corroborated his testimony. The panel found in favor of Buckhannon, awarding un­paid treatment expenses, triple damages, interest, and attorney fees.


In January of 1991, prior to the PIP arbitration, Buckhannon filed a personal injury suit against U.S. West and the truck driver, claiming that his injuries had caused his "total and permanent disability in his profession", in that he was no longer able to perform "manipulation treatments" to the extent that he had prior to his injuries.

As part of its trial preparation, U.S. West took the deposition of Buck­hannon’s former girlfriend. She recanted the majority of the testimony she had given at the PIP arbitration and stated that Buckhannon’s injuries were preexisting. Shortly thereafter, Buckhannon’s personal injury suit was voluntarily dismissed with prejudice.

Prior to the dismissal, an investigator employed by U.S. West’s in-house counsel contacted Monarch to inquire into the disability payments being made to Buckhannon. The investigator allegedly informed Monarch that Buckhannon was not disabled, had filed fraudulent tax returns, had accepted kickbacks, had committed billing fraud in his practice, and questioned why Monarch was still paying benefits to Bu­ck­hannon. Monarch ceased the disability payments.

Monarch sued Buckhannon in September 1992, seeking a declaratory judgment and rescission of the insurance policy; Buckhannon filed his own suit against Monarch for breach of duty of good faith, breach of contract, and other claims. The cases were consolidated, and Monarch and Buckhannon subsequently entered into a confidential settlement.
 

FRAUD. CONSPIRACY.  DIVERTED BANK PROCEEDS.

In 2000, Buckhannon and his then wife, Tanya, were running Neurological Services, Inc. in Sarasota, Florida. 

Running it into the ground, if you believe the allegations made at the time by Novato, California-based health care lender DynaCorp Financial Strategies, Inc.

Neurological Services, which filed for Chapter 11 bankruptcy protection in Tampa on March 8, 2000, leased employees and equipment to doctors' offices and provides management services to neurological practices, including staffing, billing, collections, payroll and marketing. An attorney for the company claimed at the time of the bankruptcy that it had management contracts in 28 states.

DynaCorp's bought health care companies' receivables at a discount. It later collected the full amount from insurers and other third-party payers.

In bankruptcy court filings, DynaCorp said it had bought about $8.25 million worth of receivables from Neurological Services between July 1997 and early 2000.


DynaCorp alleged that Neurological Services sold them those receivables at grossly inflated prices, billed for medical services not rendered and diverted bank proceeds and misdirected third-party payments. 

In its filings, Neurological Services reported owing about $1.7 million to DynaCorp, prior to set-off rights; the final amount owed is about $1.2 million, the company said.

However, DynaCorp claimed it was owed $3.55 million by Neurological Services, and not the $1.2 million stated in the Chapter 11 filing.

DynaCorp alleged that Neurological Services wanted to use DynaCorp's money to "cover the operating expenses of a network of 26 limited-liability companies owned by the Buckhannons ... none of which is a debtor in any bankruptcy case," said DynaCorp's bankruptcy papers. However, Neurological Services itself had only seven employees, according to DynaCorp.

In a deposition filed in California, DynaCorp's chief executive officer, Robert Vener, said this of Tanya Buckhannon, Neurological Services' CEO:

She "on a regular basis ... submitted receivables for purchase which were for services which had never been rendered or were greater than four times the actual payment value expected ... ."

Vener also said the Buckhannons admitted sometimes directing checks to their own account.


DynaCorp asked bankruptcy court Judge Thomas Baynes to convert the bankruptcy to a Chapter 7 liquidation as "there is no prospect of a successful rehabilitation."

Besides $1.2 million it listed as owing DynaCorp, Neurological Services listed $348,307 in other unsecured claims. DynaCorp said in bankruptcy filings that as much as $254,087 of that amount "may be owed to insiders, such as family members, attorneys and accountants."


A partial list of companies registered by Buckhannon from 1995-2010 includes:

Advanced Neurological Associates, Inc.
Allied Healthcare Consultants Of Sarasota, L.L.C.
Allied Healthcare Professionals, Inc
Allied Healthcare Professionals Of Mississippi LLC
Allied Healthcare Professionals Rehab, L.L.C.
Arcanum Equity Fund, LLC
Covenant Imaging LLC
Florida Neurological Services, Inc
Gold Nutrition, LLC
Goshen Wind And Power LLC
Las Vegas Pain Management, LLC
Morningstar Bio Mass Limited Liability Company 
Morning Star Diagnostics, LLC
Morning Star Equipment LLC
Morning Star Financial, LLC
Morning Star Information Systems LLC
Morning Star Investment Group LLC
Morning Star Management, LLC
Morning Star Medical Management Limited Liability Company
Morning Star Medical Staffing, LLC
Morning Star Molecular Imaging, LLC
Morning Star Molecular Imaging LLC 
Morning Star Property Development LLC
Neuromed Of Florida, L.L.C.
Neuromed Of Nevada, Inc.
Prism Investment Partners III, LLC

BUCKHANNON'S MORNING STAR MEDICAL STAFFING MAKES $2.5 MILLION DOLLAR INVESTMENT

By 2005, Buckhannon had rebounded from the bankruptcy, kicked Tanya to the curb and made a $2.5 million dollar investment in Strategic Staffing Resources.  

Based in Greensboro, South Carolina, founder Don Sowers renamed his company as a result, calling it Morning Star Medical Staffing. Buckhannon controlled the new company, owning a 50 percent stake. Buckhannon was at the time the CEO of Morning Star Medical Management.

Morning Star operated imaging clinics around the country, among other businesses. Buckhannon at the time said he was attracted to Strategic Staffing Resources by "the enormous potential of the business".


In 2007, a group of investors led by a Richard Levy, a Greensboro businessman, bought the assets of the company. The new company is still in business, operating under the name Global Medical Staffing.
 

But Don Sowers, a former UNC-Greensboro business professor and State Department Foreign Service Officer, didn't stay on after Levy's group purchased his company.

Instead, he followed Robert Buckhannon to his next venture, becoming the Controller of a hedge fund accused of conning investors out of $34 million by bankrupting two hedge funds and skimming more than $16 million off the top.


PONZI, ANYONE?


In December 2010, the Securities and Exchange Commission (SEC) filed suit in federal court in Tampa, Florida, against the crooked Battle Creek chiropractor Robert Buckhannon, and codefendants involved with two now-defunct Bradenton, Florida-based hedge funds, Arcanum Equity Fund LLC and Vestium Equity Fund LLC.

The SEC said the funds, which worked with investment advisor Imperium Investment Advisors LLC, told investors they would earn handsome profits through conservative investments.

Instead, much of the money was misappropriated, the SEC alleged in its lawsuit.

The defendants from early 2008 through April 2010 "comingled investor money from three separate offerings and then looted and bankrupted the hedge funds by steering millions of dollars to themselves,'' the lawsuit alleged.


For instance, the SEC said Buckhannon was involved in a deal to steer $6 million in investor money to Shea Mining and Milling LLC for a project called the "Tonopah Mine.'' Buckhannon, however, didn't disclose he had a conflict of interest because he was a founder of Shea Mining and planned to enter into an employment contract with Shea and receive a share of the firm's revenue, the SEC alleged.

The SEC also complained Buckhannon had funneled at least $390,000 of investor money to himself, his father, two brothers, his fiance's cousin and a friend. The SEC said in August 2008 he wired $60,000 out of a fund account to a jewelry store for the purchase of an engagement ring for his fiance and in July 2009 he wired another $80,000 to a title company for the down payment on a Las Vegas home.


"Buckhannon knew he was not entitled to these funds because he asked the funds' controller to classify these personal expenditures as business expenses of the funds without any reasonable basis for such classification,'' the SEC lawsuit alleged.

The suit said the defendants told investors in 2009 the funds were profitable when in fact they had lost $8.1 million in 2008 and 2009.


"Buckhannon knew the monthly account statements and newsletters (sent to investors) were false because he simply made up a monthly percentage return figure and reported it to the Vestium Management Group consultant who prepared the funds' monthly statements,'' the lawsuit alleged.

Buckhannon, Terry Rawstern, Dale St. Jean and Gregory Tindall were the managing members of the two Bradenton, Florida-based hedge funds, Imperium and Vestium.

With defendants Richard Mittasch, Christopher Paganes, Glenn Barikmo and Imperium Investment Advisors, the gang "commingled investor money from three separate offerings and then looted and bankrupted the hedge funds by steering millions of dollars to themselves," the SEC said.

Along the way, the men "took more than $1.3 million in profit-based feed and compensation to which they were not entitled," and "steered more than $15 million into loans and other deals with companies in which they had undisclosed financial interests," the complaint stated.

Without admitting or denying the allegations, Buckhannon agreed in early 2011 to return $1.349 million to investors and to pay a $130,000 fine, an SEC settlement agreement filed stated.


And on September 27, 2011, a former Las Vegas chiropractor opened his new clinic officially became Battle Creek's beloved "Dr. Rob".

FROM INVESTMENT FRAUD TO DONUTS: THE BALLAD OF BATTLE CREEK'S DR. ROB

On September 27, 2011, Robert Buckhannon unlocked his clinic door for the first time. Located at 2846 Capital Avenue SW, right across the street from Battle Creek's famed Sweetwater's Donuts, the clinic boasts "$20 visits". Miss Fortune is sure that the fine print is in there somewhere, knowing "Dr. Rob". 

Buckhannon later held the clinic's formal grand opening on December 11, 2011.

And forgoing his usual fancy-schmancy multiple LLCs, Buckhannon finally got around to registering his business under a simple assumed name in Calhoun County-Buckhannon Chiropractic Clinic--on March 14, 2012.

And Dr. Rob got his swerve back on, too. 

But there were bumps along with the pumps--on May 25, 2012 a local woman filed for a Personal Protection Order against Buckhannon in Calhoun County court, but her request was denied by the court. Official records the woman did not protest the decision.

Dr. Rob got right back on the proverbial horse, becoming engaged to Kelly DeMoss. 

Miss Fortune doesn't know if Dr. Rob got tired of his staid, small town "new normal", or if the grifter in him just recognized a worthy mark when he met Stephen Anderson. Maybe it was the soft, pink handshake that betrayed Anderson...we'll never know.

The On Deck Sports Bar and Grill at 225 W. Michigan Avenue in Battle Creek closed last week after opening about a month ago. Partners Kelly DeMoss and Stephen Anderson reportedly invested several hundred thousand dollars into remodeling the former Sports Page.

But the bar closed amid allegations from Anderson that the project was over budget and that employees and vendors were not being paid by DeMoss and Buckhannon, who were operating the business.

Anderson alleged in a complaint filed in Calhoun County's 37th District Court on May 17th that he fired Buckhannon and police escorted him from the property. Buckhannon said that was not true and he remains as general manager.

“The police didn’t escort me off; they told me there was no reason I had to leave.”

Anderson said he just wants to recoup his investment and leave the project while Buckhannon and DeMoss said they are attempting to refinance or find new investors and continue to operate the business. They have denied extensive debt or that vendors or employees are not paid.

However, local Facebook activity shows many former employees claiming "proof" that checks have bounced and hours were cut before the restaurant suddenly closed its doors.

FINANCIAL MANAGEMENT 101

So, what's the lesson here?

Miss Fortune thinks it's simple--there's always a bigger fish in the sea, and Stephen Anderson got swallowed up like Jonah in the whale.

But it doesn't look like Dr. Rob will spit him back out.

9 comments:

  1. Miss Fortune,
    I know Steve Anderson (I'm not his friend, he is a giant D-bag) and this is funny because he acts like he could not be took by a con man. He should have paid more attention to his Uncle Per (met him, creeps me out). Look into a rumor I just heard about Steve being fired by Per. Glad I found your blog, and that someone is onto these scumbags.

    ReplyDelete
  2. Headwaiter66--

    Thank you for the tip. Miss Fortune would love to hear from you regarding your info, so please send me an email at: tcmissfortune@yahoo.com.

    Meanwhile, I'll start digging!

    ReplyDelete
  3. This piece of garbage is reopening soon. He found new vendors and I assume new employees he can rip off. Perhaps all this information here needs to be brought to the paper to prevent more people from being ripped off.

    ReplyDelete
    Replies
    1. Anthony:

      Thank you for the heads up. I'm just about to publish the first in a series of stories about a Buckhannon investment partner, and would love to hear more from you about the "crooked chiropractor".

      Please send me an email to: tcmissfortune@yahoo.com

      Delete
  4. So did he succeed? Is Dr. Buckhannon now a rich man? I thought that that his schemes would backfire and that he would now be broke but it appears that he "pulled it off" and is now rich.

    ReplyDelete
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    1. Mitchell:

      It appears that Dr. Buckhannon has a steady income stream--where it comes from, only he (and possibly his cohort Chris Paganes) knows. A conspiracy theorist might surmise money is washing through that restaurant like a coin-operated laundromat.

      This story can only get more interesting next year...something tells me it's going to break open.

      And Miss Fortune will be there to pick up the pieces!

      Delete
  5. Well just last monday, the on deck sports bar mysteriously had a fire that will condemn the building and end the business. Hmm.....

    ReplyDelete
  6. A former Battle Creek bar manager and chiropractor has been indicted on fraud charges in Nevada

    Robert Buckhannon, 53, who had a chiropractic business and who with his fiance owned One Deck Sports Bar and Grill, was charged with conspiracy and fraud in Las Vegas, according to U.S. Attorney Daniel G. Bogden. Buckhannon is alleged, along with a second man, Terry Rawstern, 66, of Aberdeen, S.D., to have schemed to misappropriate $34 million from two Florida-based hedge funds.

    The fraud occurred between April 2008 and April 2010, the federal government alleges.

    Buckhannon was arrested by FBI agents Wednesday in Henderson, Nev. He pleaded not guilty Thursday when he appeared Thursday before U.S. Magistrate Judge George Foley. He was released on a personal recognizance bond. Rawstern’s arraignment is scheduled Friday.

    If convicted they face up to 30 years in prison on the conspiracy charge and 20 years on a wire fraud charge along with fines of up to $1 million on each count.

    Last year Buckhannon and Kelly DeMoss of Battle Creek opened On Deck in the former Sports Page at 225 W. Michigan Ave.

    On Dec. 30 a fire destroyed the business and the four-story building. Both Battle Creek police and fire inspectors and investigators from the Bureau of Alcohol, Tobacco, Firearms and Explosives have been investigating since trying to determine a cause. The ruins of the building were demolished last month.

    “We have been working with our federal, state and local partners to investigate and prosecute persons who commit significant financial crimes,” said U.S. Attorney Bogden for the District of Nevada. “Often these cases take considerable time and resources to investigate and litigate, but the American people deserve to know that we are working diligently to catch the perpetrators.”

    According to the indictment, for two years, Buckhannon and Rawstern and others were managing members of two Bradenton, Fla.-based hedge funds, Arcanum Equity Fund, LLC and Vestium Equity Fund, LLC.

    Investigators have said the men engaged in a scheme to misappropriate $34 million they raised from investors by misrepresenting how the funds would be used.

    They also falsely said they had safeguards for the investments, it was alleged.

    The defendants then looted and bankrupted the hedge funds by taking payments on false and fictitious profits and taking improper and undisclosed loans, according to the indictment.

    The government is alleging that investors lost approximately $13.1 million. In April 2010, the hedge funds voluntarily filed for Chapter 7 bankruptcy and are now under the control of court-appointed trustees.

    The Las Vegas Review-Journal reported that Buckhannon is accused of secretly funneling at least $341,000 of investor money to his family and associates, the indictment alleges. He spent $60,000 on an engagement ring for his fiance and $80,000 for a down payment on a Las Vegas house, the indictment alleges.

    In 2010 Buckhannon agreed to pay roughly $1.5 million to settle the SEC suit against him. That included returning $1.4 million to hedge fund investors and paying a $130,000 fine.

    But Buckhannon never “paid a penny” of the settlement, Assistant U.S. Attorney Kathryn Newman said Wednesday in court while arguing for his detention, according to the Review-Journal.

    She also said hundreds of investors lost money in the scheme and $13.1 million was still missing.

    ReplyDelete
    Replies
    1. Miss Fortune broke the story of Buckhannon's arrest by the FBI on this blog:http://www.glisteningquiveringunderbelly.blogspot.com/2014/10/robert-buckhannon-arrested-fbi-agents.html

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