In a dramatic turn of events, a Nevada corporation and an individual investor have filed a lawsuit alleging fraud and conspiracy against a health corporation and two of its consultants. Cimarron Capital, Inc. and Christine Arenella filed the complaint in the Circuit Court of the Fifteenth Judicial Circuit in Palm Beach County, Florida on July 24, 2024, naming Emergent Health Corp., Leonard Tucker, and Frank Magliochetti as defendants.
The case revolves around an alleged scheme to defraud Cimarron Capital and Christine Arenella out of $250,000. According to the complaint, Peter Aiello, president of Cimarron Capital, had prior business dealings with both Tucker and Magliochetti. The plaintiffs claim that these defendants provided various consulting services to undercapitalized public companies. In August 2021, Dr. John Cappello, then CEO of Emergent Health Corp., reached out to Aiello for help in securing immediate capital for Emergent. Aiello introduced Cappello to Tucker and Magliochetti.
Subsequently, Cimarron Capital entered into consulting agreements with Emergent alongside Tucker and Magliochetti. These agreements aimed to secure much-needed capital for Emergent. One key stipulation was that Magliochetti would be appointed as a director of Emergent. The plaintiffs allege that Tucker and Magliochetti misrepresented the need for temporary operating capital amounting to $250,000—$150,000 from Cimarron Capital and $100,000 from Arenella—to buy time for preparing a Reg-A Offering.
A crucial aspect of the negotiations was that Dr. Cappello would remain in control as the majority shareholder of Emergent Health Corp., which was vital for Cimarron Capital's and Arenella's agreement to loan the funds. However, unbeknownst to them at the time, Tucker and Magliochetti had already negotiated a side deal with Dr. Cappello where he agreed to transfer his controlling interest (66.7% voting stock) in Emergent to Magliochetti for just $10 after securing the loan from the plaintiffs.
The plaintiffs were not informed about this change in control until November 2021—months after they had wired their funds on August 21, 2021. They allege that this non-disclosure violated SEC rules and regulations.
Cimarron Capital and Christine Arenella are seeking judgment against all defendants jointly and severally for damages exceeding $50,000 plus interest and costs. They also reserve the right to pursue punitive damages against these defendants.
The legal representation for the plaintiffs is Russell L. Forkey from Boca Raton-based law firm Russell L. Forkey P.A., while details about defense attorneys are currently unavailable.