A Baltimore-area businessman has been accused in a federal lawsuit of enticing investors with false promises and misusing his company’s money for lavish personal expenses.
The lawsuit claims that Patrick B. Nagle, the owner and CEO of Rehab.com, told investors he would convert the company into a C-corporation and launch Series A fundraising but then repeatedly refused to do so.
The plaintiff is the Ryan N. Rice 2018 Irrevocable Trust, which invested $1.5 million in Nagle’s company in 2019. Nagle’s goal for the business, based in Lutherville, was to create a one-stop website at Rehab.com where users could compare addiction treatment facilities.
The trust invested in the company based on Nagle’s representation that it was “cashflow positive,” according to the complaint. When the trust brought its total investment to $1.5 million, it agreed that the balance of the trust’s loan, after company expenses, would be converted into an equity investment that would result in a valuation of $12.5 million in company stock, the complaint alleges.
Nagle then spent about two years refusing to convert the company or begin Series A fundraising, the trust claims in the complaint. During that time, Nagle became increasingly erratic, relocated to Puerto Rico and lost $100,000 of company money in a cryptocurrency scam, according to the complaint. He ultimately returned to Baltimore but continued his erratic behavior, including being verbally abusive toward the…
