Democratic presidential hopeful Joe Biden’s brother, James Biden, is accused of attempting to defraud a Tennessee business in a federal lawsuit.
Biden along with hedge fund manager Michael Lewitt and others, has until mid-August to respond to the lawsuit filed last month by Michael Frey and Dr. Mohannad Azzam, according to the Knoxville News Sentinel.
The suit says that the plaintiffs founded Diverse Medical Management to reform failing hospitals, and Jim Biden promised to sell the health care plan to investors.
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Breitbart.com reports: Instead, the suit alleges, James Biden urged the two men to borrow $10 million from a hedge fund manager involved in the deal and then proceeded to pass their idea off as his own to a conglomerate of Turkish investors.
“The lawsuit takes direct aim at Biden, painting him as a con artist who uses his ties to his brother — now a Democratic candidate for president — to lure his victims,” the Knoxville News Sentinel reported.
According to documents filed with the U.S. District Court, Frey and his wife developed a business model to take over rural hospitals and retrofit them to not only offer traditional hospital care, but also drug addiction and mental health treatment. After incorporating the enterprise as Diverse Medical Management, they brought on Azzam, “who contracted with nursing homes to provide medical care for seniors.”
The business model was lucrative enough that by 2017, Frey and Azzam were actively pitching it to investors and hospitals across the country. One investor particularly taken with the idea was Americore Health, an operator of rural hospitals.
At the behest of Americore CEO, Grant White, Frey and Azzam were urgd to pitch their business plan to rural hospitals in Kentucky. It was at one such meeting where the two men met James Biden, who identified himself as a “principal” at Americore.
Not long after their initial encounter, James Biden introduced the men to Michael Lewitt, a hedge fund manager and well-known “credit strategist.” Around this time, Americore made plans to buy Diverse Medical for the sum $7 million.
Despite the deal, Americore quickly fell behind on its scheduled payments to Frey and Azzam. It was then that James Biden and Lewitt, as detailed in the lawsuit, hatched a plan to oust White and sell Americore along with Diverse Medical to a third company called the Platinum Group.
Biden or Lewitt’s role within the Platinum Group is unclear. The organization, which is little-known and has no social media presence, is likely a holding company specifically set up for the purchase of Americore.
Frey and Azzam appear to have been uncomfortable with turn the deal took, especially the notion of removing White. The men, though, went along with the plan after being told a payout was “imminent.”
“They repeatedly assured (Frey) that investment capital originating from and flowing through foreign entities was not only certain, but was imminent,” documents filed by Frey and Azzam’s attorney state.
James Biden is alleged to have put the men at ease by playing up his political connections. The lawsuit reads:
Biden promised (Frey’s) Intensive Outpatient Model would play an integral role in health care policy at the highest levels of the United States government.
Since the deal had evolved to include the purchase of Americore, Frey and Azzam were encouraged to take a $10 million loan — part of which would came from Lewitt’s hedge fund — to expand their business. Frey and Azzam claim the loan was taken with the understanding it would be repaid by money brought in from new investors.
Throughout the entire process, the suit states, James Biden was promising investment capital was forthcoming. As more time elapsed and new investors failed to materialize, Frey and Azzam became suspicious they were being set up. Those feelings only intensified when James Biden inadvertently sent Frey a text message about their company meant for someone else in November 2018.
“We can wrap a/c into Frey’s entity further diluting them both in the process? After we take control of both. Just a thought,” the purported text from James Biden reads, as included in the lawsuit. “We must have complete control, too many moving pieces. Jim.”
When asked to explain, James Biden demurred and requested more information on Diverse Medical and the range of healthcare services offered. Even though they provided the information, Azzam and Frey’s suspicions were only further heightened.
The final breakdown in the relationship occurred when the men learned that Biden and Lewitt had left them out of the picture when selling the deal in Turkey. Although, Azzam and Frey knew their business model was being pitched to the “Qatar Investment Authority in Turkey,” they were unaware the documents presented to investors by James Biden and Lewitt were scrubbed clean of the Tennessee businessmen. The lawsuit says:
On January 23, Platinum Group … and Biden submitted a White Paper … outlining ‘Platinum Group Diverse Medical Management (PGDMM)’s business model. What the investors were not told, however, was that this white paper was drafted by (Frey and Azzam) and sent to Biden … Platinum Group simply replaced all references to Plaintiffs with PGDMM, a non-existent entity.
When Frey and Azzam attempted to reassert control over their business, the lawsuit alleges that Lewitt demanded repayment of the money his hedge fund loaned them.
It is unclear if the lawsuit will progress or if James Biden and Lewitt will choose to settle given the high-profile nature of the allegations and the impact they may pose to Joe Biden’s presidential campaign.
This is not the first time that James Biden’s business dealings have raised eyebrows. As Breitbart News reported on Friday, the younger-Biden received “unusually generous” bank loans to open a night club during the 1970s while his brother sat on the Senate Banking Committee. The ample terms under which the loans were issued drew attention and concerns about influence peddling given James Biden’s lack of business experience and paltry net worth.
The former vice president’s younger brother is not member of the Biden clan to come under fire for leveraging political connections to secure lucrative business deals recently. In Secret Empires: How the American Political Class Hides Corruption and Enriches Family and Friends, Peter Schweizer, a senior contributor at Breitbart News, revealed that in 2013 “Hunter Biden’s firm signed a billion-dollar deal with a subsidiary of the Chinese government’s Bank of China just 10 days after Joe and Hunter Biden flew to China aboard Air Force Two.”
Schweizer also detailed how Hunter Biden secured a seat on the board of Bohai Harvest RST (BHR), which invested in a Chinese company that was indicted for engaging in a “nuclear power conspiracy against the United States.”
“When you have the motive of greed and when you don’t worry too much about ethics, it’s very easy to come up with creative ways to enrich yourself, and one of those is what we call ‘American princelings,”
Schweizer told Breitbart News Tonight last year. “The term ‘princelings’ is really a term that’s been widely used in China and in the West to talk about China, where in communist China, if you want to get deals done, if you want to get favors from the government, you basically do business with their children, and these children of communist party officials are called the princelings.”