Feds indict Boardman business woman for securities and bank frau - WFMJ.com News weather sports for Youngstown-Warren Ohio

Feds indict Boardman business woman for securities and bank fraud

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A Boardman woman and a Cleveland man are named in a seven count federal bank and securities fraud indictment handed up by a federal grand jury on Wednesday.

The indictment charges 50-year-old Andrea Trgovcich of Boardman with one count of securities fraud and six counts of bank fraud for allegedly collecting more than half a million dollars from investors without ever developing or marketing a product.

Charged with bank fraud is Bertrand Gray of Cleveland, who according to the indictment was hired by Trgovcich as Chief Financial Officer of her company, Wellness Integrated Network.

Prosecutors say Trgovcich established Wellness Integrated Network LLC in 2008 as a company intended to develop and market a mobile and web-based software application that would enable users to manage diet, weight, and physical activities, based on medical history, lifestyle, cooking ability, time allowances, budge and preferences.

If the software was developed, it would incorporate menus, recipes, shopping lists, e-coupons, exercise tracking, and fitness routines.

The WIN software was intended to be marketed to corporations and businesses with wellness plans, as well as insurance companies.

Between 2008 and 2011, WIN joined three business incubators, one of which awarded the company a $25,000 grant, according to the indictment.

In 2010, a hospital not named in the indictment invested $50,000 in WIN, which agreed to develop and install software specifically for the hospital.

Investigators say after Trgovcich hired Gray as CFO in 2011, both of the defendants conducted a series of presentations where Gray allegedly made false statements to prospective investors that he was independently wealthy and had a letter-of-intent from a company to purchase the WIN software.

According to the indictment, Trgovcich failed to dispute Gray's false claims to investors that Trgovcich was not drawing compensation or a salary from the company.

Prosecutors say that throughout the operation of the company, Trgovcich was withdrawing funds for personal use.

Between 2008 and 2013, investigators say Trgovcich collected $578,869 from investors, while no product was ever developed or marketed by her company.

At an investor meeting in January 2013, Trgovcich told investors that funds they invested in WIN were gone, according to the indictment.

However, prosecutors say that Trgovcich continued to solicit investments for her company for eight more months following that meeting.

The indictment accuses Trgovcich and Gray of misappropriating $234,743 in investor funds.

Trgovcich was also named as a defendant in a separate civil lawsuit filed in 2013 in Mahoning County Common Pleas Court by seven of her investors.

The lawsuit alleged breach of agreement, breach of duty, unjust enrichment, and fraud on the part of Trgovcich.

The investors, who list residences in Youngstown, Canfield and Campbell, complained that they had been unable to obtain financial information about Wellness Integrated Network in spite of repeated requests to find out why $120,000 was withdrawn from the company's accounts in March, 2013.

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