Zicam inventor charged with utilizing Lucille Ball’s ‘Desilu’ in fraud

The Redondo Seaside man claimed to be rich — within the Nineteen Nineties, he had invented Zicam, a preferred chilly treatment — and, he informed buyers, he had a tempting provide.

It started with a reputation: Desilu Studios Inc.

Charles Hensley, 68, began utilizing the enterprise identify in 2016. It bore a placing resemblance to Desilu Productions Inc., the previous manufacturing firm operated by Lucille Ball and husband Desi Arnaz.

He approached buyers, hoping to faucet into the nostalgia of outdated Hollywood and claiming the corporate was set to supply new content material. He informed them that he was backing the enterprise together with his private wealth and that the enterprise was valued at $11 billion.

He additionally included a second enterprise within the pitches, Migranade Inc., which he claimed was valued at greater than $50 million.

However the companies have been “little more than shell corporations,” a part of a rip-off that bilked buyers out of at the very least $331,000, federal authorities alleged Wednesday.

The cash went to non-public bills, together with journeys to Las Vegas, prosecutors alleged.

In a civil case additionally filed in U.S. District Court docket on Wednesday, the U.S. Securities and Change Fee alleged that Hensley and Desilu Studios raised about $596,360 from at the very least 21 buyers.

The alleged rip-off ran from August 2017 to Might 2018, in line with a 12-count federal grand jury indictment.

Hensley pitched investments and acquired different folks to pitch investments in firms together with Desilu Studios and Migranade, and supplied to make use of inventory in his firms to amass shares in “at least some” of the businesses he focused, in line with the prison indictment.

“Hensley falsely claimed to investors that he had obtained the rights to the Desilu brand,” in line with the SEC’s courtroom submitting. “Hensley lured investors by claiming that he was reviving the Desilu brand through Desilu Studios, which purported to be a modern entertainment company engaged in film and television production, merchandising, content streaming, theme parks, and cinemas.”

He additionally falsely informed the buyers that the enterprise was “blessed” by Lucie Arnaz, the daughter of Desi Arnaz and Lucille Ball, in line with the SEC.

Hensley owned no mental property, and his claims of revitalizing the studio — and of possessing substantial wealth — have been additionally unfaithful, federal prosecutors mentioned.

“He was not extremely wealthy, had few assets, and was repeatedly bouncing checks and overdrawing bank accounts to get cash and pay expenses,” the prison indictment said.

In his scheme, Hensley allegedly went so far as claiming that Desilu Studios was about to go public and that the corporate’s inventory was price greater than its face worth, prosecutors mentioned. He allegedly informed buyers the inventory would enhance in worth following an preliminary public providing.

“In fact, according to the indictment, none of this was accurate and Hensley stole someone’s identity to list as Desilu Studio’s chief financial officer in offering materials,” prosecutors mentioned.

The scheme went past taking cash from buyers, in line with the U.S. legal professional’s workplace. In some instances, Hensley allegedly satisfied homeowners and executives to promote their firms in change for nugatory Desilu inventory.

“The indictment further alleges that Hensley touted these purchases to the individual investors, further misleading them about his purported acquisitions of valuable assets,” prosecutors mentioned.

Hensley was charged with 11 counts of wire fraud and one rely of aggravated id theft, in line with the U.S. legal professional’s workplace for the Central District of California.

Hensley couldn’t be reached for remark. A spokesperson for the U.S. legal professional’s workplace mentioned Hensley was within the strategy of hiring a protection legal professional, however none was listed in courtroom filings.

If convicted on the latest prison costs, Hensley would face a statutory most sentence of 20 years in federal jail for every wire fraud rely plus a compulsory two-year jail sentence for the rely of aggravated id theft, prosecutors mentioned.

Court docket filings revealed that Hensley has a historical past of authorized troubles.

He was sentenced to 3 years of probation in 2012 after pleading responsible to a federal prison cost for illegally advertising and marketing and promoting VIRA 38, an unapproved natural treatment that he claimed may stop and deal with chicken flu.

And in line with the SEC’s latest civil case, the Arizona Company Fee filed a cease-and-desist order in opposition to him and Migranade in 2021.

Hensley claimed the corporate was producing an over-the-counter migraine treatment, the civil case said. The Arizona fee ordered him to pay an administrative penalty and restitution to buyers.

In October 2016, Hensley filed an software with the U.S. Patent Workplace asking to trademark “Desilu,” in line with the SEC’s case.

However he left a important reality out of the applying: CBS Studios had been “continuously using” the Desilu trademark “for decades in its television programming,” the civil case said. The patent workplace, nonetheless, accepted Hensley’s request in January 2018.

Three months later, Desilu Studios sued CBS “to establish its ownership and use of the ‘Desilu’ mark,” but it surely dropped the case on Oct. 21 that 12 months, the SEC’s case said.

9 days later, CBS filed a countersuit in opposition to Desilu Studios, Hensley and Desilu Corp. alleging a number of claims, together with trademark infringement.

CBS’ case concluded in Might 2019 when the courtroom barred “Desilu Studios from using the ‘Desilu’ mark and ordered that Desilu Studios be dissolved or remove ‘Desilu’ from its name,” in line with the SEC.