SEC Wins Contempt Motion Against 3

Three Southern California men were found in contempt by a federal judge for failing to pay court-ordered restitution in an alleged scam that officials say defrauded investors out of more than $5 million, in part by using a bogus Internet endorsement from former U.S. Surgeon General C. Everett Koop. U.S. District Judge Alicemarie H. Stotler in Santa Ana found that three defendants in a civil fraud case brought by the Securities and Exchange Commission hadn’t turned over any of the more than $1.5 million the court ordered them to pay in April, and hadn’t proved an inability to pay. Two of the defendants, David A. Colvin of Chatsworth and John Larson of Los Angeles, were taken into custody at the contempt hearing this week and remain in jail. The judge issued an arrest warrant for a third man, Job K. Hovik of Carlsbad. Colvin and three others were ordered to pay a total of $3.22 million in fines and restitution for their part in the sale of securities in Medical Advantage Inc., a weight loss clinic operator, and Lamelli Inc., developer of a drug detoxification system.