According to the claims made by Azzam Medical Services and Diverse Medical Management, hedge fund manager Michael Lewitt and James Biden defrauded them by never sending the funds promised. James Biden is the brother of Democratic presidential candidate, Joe Biden.
The report filed last month by Azzam Medical Services and Diverse Medical Management stated that the group stole their business models. Further, the complaint read that these two investors tried to drive the companies into insolvency. The complaint is filed with the U.S. District Court for the Eastern District of Tennessee.
The name of the defendant included Michael Lewitt who is the fund and money manager for Third Friday Total Return; Grant White, the founder of Americore Health; Amer Rustom, co-founder of Platinum Group USA and; James Biden, Americore principal.
According to the lawsuit, Americore proposed to buy Tennessee’s Azzam and Diverse last year itself. This company was founded in Alabama, for about $7 million. This deal was promised to be accomplished in September last year. However, it was never done. After this, Biden, Lewitt, and Rustom purposefully held discussions with the health-care providers and tried to pursue them for securing funding from foreign investors. The name included Turkish investment firm Dogan Holdings and Qatar Investment Authority.
The fraud seems to be bait and switch fraud. The alleged encouraged healthcare services to acquire new business and service lines, in the pretence of helping them with capital arriving from “foreign entities”. Following which, Azzam and Diverse sued the defendants for tortious interference with business relationships, civil conspiracy, negligent misrepresentation, and fraud.
As per the complaint, James Biden promised Azzam and Diverse and convinced them to trust their intensive outpatient model. This model is a mental health and addiction treatment program which lets patients to live at home during the treatment process.
In late March, the founder and chief executive officer of Diverse, Michael Frey asked Michael Lewitt about the progress of the deal. To this, Lewitt response was rude.
He said, “Nothing has changed,”. However, the complaint read that the next day, Lewitt texted to Michael Frey saying: “Actually things have changed. We have multiple companies that want to do the deal now.”
Moreover, the attorney who was representing Diverse called Lewitt to clear the confusion. Lewitt exclaimed, “I know you are putting on a show for your client but this is a friendly deal and if you want it to continue to be a friendly deal you need to adopt the proper tone and drop the nonsense,”.