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A cold-remedy inventor, Lucille Ball’s old studio and an alleged investment scheme. What could go wrong?

Zicam inventor Charles Hensley is charged with bilking investors out of hundreds of thousands of dollars by fraudulently using the ‘Desilu’ brand.

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The Redondo Beach resident claimed to be wealthy because he created Zicam, a popular cold remedy, in the 1990s. He also promised investors a lucrative deal.

Desilu Studios Inc. was the company’s original moniker.

In 2016, 68-year-old Charles Hensley launched the company under that name. It was remarkably similar to Desilu Productions Inc., which Lucille Ball and husband Desi Arnaz had run in the past.

He approached potential financiers, pitching the idea that the company was about to begin producing new content in an effort to capitalize on the popularity of retro-style Hollywood. He reportedly informed them that the company was worth $11 billion and that he was investing his own money in the venture.

Another company he pitched was called Migranade Inc., which he said was worth over $50 million.

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However, federal authorities claimed on Wednesday that the companies were “little more than shell corporations” as part of a scheme to defraud investors of at least $331,000.

Prosecutors claim the money was spent on things like Las Vegas vacations and other luxury items.

On the same day that the criminal case was filed in U.S. District Court, the U.S. Securities and Exchange Commission filed a civil case alleging that Hensley and Desilu Studios fraudulently solicited $596,360 from at least 21 investors.

A 12-count indictment handed down by a federal grand jury alleges the scam occurred between August 2017 and May 2018.

According to the indictment, Hensley offered stock in his companies to acquire shares in “at least some” of the companies he targeted, including Desilu Studios and Migranade. He also falsely claimed to investors that he had obtained the rights to the Desilu brand. By portraying Desilu Studios as a cutting-edge media conglomerate involved in feature film and television production, merchandising, content streaming, theme parks, and movie theaters, Hensley was able to convince investors to back his venture.

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According to the SEC, he also lied to the investors by saying that Desi Arnaz and Lucille Ball’s daughter, Lucie Arnaz, had “blessed” the business.

Federal prosecutors stated that Hensley’s claims that he had revitalized the studio and amassed substantial wealth were false.

The criminal indictment stated that “he was not extremely wealthy, had few assets, and was repeatedly bouncing checks and overdrawing bank accounts to get cash and pay expenses.”

Prosecutors claim that Hensley deceived investors by saying Desilu Studios was going public and that the stock was worth more than its nominal value. It is claimed that he guaranteed a rise in stock price after the IPO.

Prosecutors claim that Hensley stole someone’s identity in order to list himself as Desilu Studio’s chief financial officer in offering materials, and that none of the aforementioned claims were true.

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According to the U.S. attorney’s office, the scheme was about more than just stealing from investors. Hensley is accused of convincing business owners and top executives to sell their companies in exchange for worthless Desilu stock.” The indictment adds that Hensley misled individual investors by boasting about these purchases “stated the prosecution.

The Central District of California U.S. attorney’s office stated that Hensley faced 12 charges: 11 for wire fraud and one for aggravated identity theft.

No one was successful in contacting Hensley for remark. Although the U.S. attorney’s office claimed that Hensley had retained counsel, no such name appeared in the case’s official documents.

Prosecutors say that Hensley faces a mandatory two-year prison term for the count of aggravated identity theft, in addition to the statutory maximum of 20 years in federal prison for each count of wire fraud, if he is found guilty on the new criminal charges.

There is evidence in the court records that Hensley has a history of legal problems.

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After pleading guilty to a federal criminal charge for illegally marketing and selling VIRA 38, an unapproved herbal remedy he claimed could prevent and treat bird flu, in 2012, he was sentenced to three years of probation.

Furthermore, the Arizona Corporation Commission issued a cease-and-desist order against him and Migranade in 2021, as stated in the SEC’s recent civil case.

According to the lawsuit, Hensley claimed the company was making an OTC migraine remedy. The Arizona Securities Commission fined him and made him reimburse investors.

According to the SEC’s case, Hensley sought to trademark “Desilu” in October 2016 by filing an application with the United States Patent Office.

However, he omitted a crucial detail from the application: CBS Studios had “continuously used” the Desilu trademark “for decades in its television programming,” as stated in the civil case. However, in January of 2018, Hensley’s application was granted by the patent office.

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After filing suit “to establish its ownership and use of the ‘Desilu’ mark,” Desilu Studios dropped its suit against CBS on October 21, according to the SEC’s case.

CBS countersued Desilu Studios, Hensley, and Desilu Corp. for trademark infringement and other claims nine days later.

In May 2019, the court ruled in favor of CBS and “ordered that Desilu Studios be dissolved or remove ‘Desilu’ from its name,” as stated by the SEC.

There was an earlier version of this story published in the Los Angeles Times.

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