IRVINE — A Vietnamese inventor of an intravenous medical device has been accused by the Securities and Exchange Commission of making fraudulent claims about his former company and selling nearly $2-million worth of unregistered securities to Vietnamese investors.
Lloyd Tran, founder of Biomedcare Inc. in Irvine, is alleged to have provided investors with false and incomplete information about Controlled Release Technologies, a company he founded in Chicago in 1984 and moved to Irvine in 1989, according to the SEC complaint filed Thursday in Chicago.
Alice Holloway, an SEC attorney in Chicago, said that Tran faces no penalty from the civil complaint. The agency is simply seeking an injunction ordering Tran not to engage in any similar securities practices in the future.
Controlled Release Technologies, which manufactured the Micros drug-delivery system, was forced into involuntary bankruptcy in 1990.
Between February, 1989, and March, 1990, the SEC alleges, Tran sold about $2-million worth of unregistered common stock to more than 100 investors in California--many of them in Little Saigon in Orange County--Illinois, Washington and Oregon, without telling them of CRT's precarious financial condition.
Also, according to the complaint, Tran claimed that his product had full FDA approval, when it did not. The FDA had warned Tran not to make such representations.
Tran, who had not yet seen a copy of the complaint, denied the allegations Friday. He said the company's bankruptcy was brought on by disgruntled employees in Chicago who opposed the move to Irvine, and he assumed that the allegations stemmed from their complaints.
"CRT was a private company, not public," Tran said. "I only sold (stock) among friends and friends of friends."
Tran said he hopes that his new company, Biomedcare, which is developing a new version of Micros, can generate enough profits to reimburse some of the investors who lost money.
"Maybe we can settle this," Tran said about the allegations. "My goal, if (Biomedcare) is successful, is to return those back investments."