State regulators have zeroed in on a Williamson County man they say illegally soliciting investments in a medical device product.
Texas State Securities Board regulators last week ordered Randall Johnson, the president of a Georgetown wellness company, to stop offering investments in a machine he claims to be "...the most advanced early screening system" for primary care physicians.
Regulators say Johnson has been soliciting investments of $50,000 in a device he refers to as the PS-8X, the WellnessTech System and the WellnessTech Screening System. Regulators notified Johnson on Feb. 19 that his solicitations were subject to securities regulations.
A statement to the press last week indicated that Johnson met with state regulators on Feb. 28 and shortly thereafter sent an email to the director of the state’s enforcement division promising to cease and desist offering investments tied to medical devices.
However, officials say Johnson continued offering investments tied to the WellnessTech System on the same day he promised regulators that he would stop doing so, and that he has continued offering those illegal investments.
That led Texas Securities Commissioner Travis J. Iles took emergency action on March 7 to stop Randall Johnson, the president of a Georgetown wellness company, "...from fraudulently offering investments" in his machine, regulators said in a statement to the press.
Officials say Johnson is connected with several healthcare-related companies and also owns a debt collection firm based in Georgetown.
The state’s emergency order says Johnson has been selling unregistered securities, making misleading statements and unsubstantiated claims about the screening equipment and the companies, and has tried to obstruct the State Securities Board investigation.
Regulators claim in the order that Johnson has been telling individuals that the investment will return 20 percent per year over two years, with the returns paid monthly, according to the regulatory agency. He has also promised investors that they would receive $5 each time a medical facility uses the WellnessTech System, and that such payments could total between $15,000 and $18,000 per year over a term of five years.
According to the order, Johnson is not disclosing to investors any financial information about Advanced Wellness and its ability to pay 20 percent annualized returns over two years. Johnson identifies the company as a limited liability company, but officials said it is not registered with the Texas Secretary of State.
Johnson, Advanced Wellness Services, and Recovery Management International have 31 days to challenge the order at the State Office of Administrative Hearings.