Zicam inventor accused of fraudulently using Lucille Ball’s ‘Desilu’

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The Redondo Beach man claimed to be wealthy—in the 1990s, he had invented Zicam, a popular cold remedy—and, he told investors, he had a lucrative offer.

It started with one name: Desilu Studios Inc.

Charles Hensley, 68, began using the business name in 2016. It bore a striking resemblance to Desilu Productions Inc., a former production company run by Lucille Ball and husband Desi Arnaz.

He approached investors hoping to tap into old Hollywood nostalgia, claiming the company was ready to produce new content. He told them that he was backing the venture with his personal assets and that the business was valued at $11 billion.

He also included a second business in pitches, Migrained Inc.

But the businesses were “little more than shell corporations,” part of a scandal that siphoned investors out of at least $331,000, federal officials alleged Wednesday.

Prosecutors alleged that the money went to personal expenses, including trips to Las Vegas.

In a civil case filed in US District Court on Wednesday, the US Securities and Exchange Commission alleged that Hensley and Desilu Studios raised approximately $596,360 from at least 21 investors.

The alleged scandal ran from August 2017 to May 2018, according to the 12-count federal grand jury indictment.

According to the criminal indictment, Hensley invested and got others to invest in companies including Desilu Studios and Migraine, and offered to use stock in their companies to acquire shares in “at least some” companies. Of.

According to an SEC court filing, “Hensley falsely claimed to investors that he had acquired the rights to the Desilu brand.” “Hensley wooed investors by claiming that it was reviving the Desilu brand through Desilu Studios, a modern entertainment company engaged in film and television production, sales, content streaming, theme parks and theaters.”

According to the SEC, he also falsely told investors that the venture was “blessed” by Lucy Arnaz, daughter of Desi Arnaz and Lucille Ball.

Federal prosecutors said Hensley had no intellectual property, and that his claims to revive the studio and own substantial assets were also untrue.

“He was not very wealthy, had few assets, and was repeatedly bouncing checks and bank accounts to obtain cash and pay expenses,” the criminal indictment states.

Prosecutors said that in his plan, Hensley allegedly claimed that Desilu Studios was about to go public and that the company’s stock was worth more than its face value. He reportedly told investors that the stock would increase in value after the initial public offering.

“Indeed, according to the indictment, none of this was accurate and Hensley stole the identity of someone to be listed as the chief financial officer of Desilu Studios in the material offering,” prosecutors said.

According to the US Attorney’s office, the scheme went beyond taking money from investors. In some cases, Hensley allegedly convinced owners and executives to sell their companies in exchange for worthless Desilu stock.

“The indictment further alleges that Hensley told individual investors about these purchases, and misled them about his alleged acquisitions of valuable assets,” prosecutors said.

According to the U.S. Attorney’s Office for the Central District of California, Hensley was charged with 11 counts of wire fraud and one count of identity theft.

Hensley could not be reached for comment. A spokesman for the US Attorney’s Office said Hensley was in the process of hiring a defense attorney, but none were listed in the court filings.

Prosecutors said that if convicted of the most recent criminal charges, Hensley could face a statutory maximum sentence of 20 years in federal prison for each wire fraud count and a mandatory two years in prison for aggravated identity theft count. Will have to face punishment.

Court filings revealed Hensley had a history of legal troubles.

He was sentenced in 2012 to three years’ probation after pleading guilty to a federal criminal charge for illegally marketing and selling Viera 38, an unapproved herbal remedy he claimed to have cured bird flu. They can be prevented and treated.

And according to the SEC’s recent civil case, the Arizona Corporations Commission filed a cease-and-desist order against him and Migraine in 2021.

The civil case states that Hensley claimed the company was producing an over-the-counter migraine treatment. The Arizona Commission ordered them to pay an administrative fine and restitution to investors.

In October 2016, Hensley filed an application with the U.S. Patent Office for the “Desilu” trademark, pursuant to the SEC’s case.

But he omitted one important fact from the application: The civil case states that CBS Studios had been “constantly using” the Desilu trademark “in its television programming” for decades. However, the Patent Office granted Hensley’s request in January 2018.

Three months later, Desilu Studios sued CBS to “establish its ownership and use of the ‘Desilu’ mark,” but dropped the matter on October 21 of that year, the SEC’s case stated.

Nine days later, CBS filed a countersuit against Desilu Studios, Hensley and Desilu Corp, alleging several claims, including trademark infringement.

CBS’s case ended in May 2019 when the court “barred Desilu Studios from using the ‘Desilu’ mark and ordered that Desilu Studios be dissolved or ‘Desilu’ be removed from its name, according to the SEC ”

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