It was nothing to sneeze at.
A man who co-created the cold remedy, Zicam, has been charged with running a phony movie business called Desilu Studios after the famed production company behind “I Love Lucy” and “Star Trek,” and using cash he attracted for film projects to line his pockets.
Charles Hensley, 68, of Redondo Beach, claimed he was extremely wealthy from the fortune he made on Zicam in the 1990s, and was throwing his own money into his film projects. In fact he was broke, and seeking money to support his lifestyle, federal prosecutors said.
According to an indictment filed in federal court in Los Angeles, Hensley convinced several unnamed companies to invest in his businesses, Desilu Studios Inc. and Migrande Inc. in 2017 and 2018, using falsified documents that claimed the businesses were worth billions of dollars.
He also claimed he had acquired the rights to multiple projects and had secured distribution and development deals.
Prosecutors say none of it was true and that the businesses were merely shell companies that were set up for the purpose of an investment scam. In all, prosecutors say Hensley made off with hundreds of thousands which he used to pay for his personal expenses and lavish trips to casinos in Las Vegas.
When investors grew suspicious and came after Hensley for their money, prosecutors say he claimed that Desilu Studios was about to go public and that its shares would soon be worth far more. But prosecutors say that was also false, as the company didn’t even have a chief financial officer, auditor or accountant. At one point, Hensley forged documents to show that someone was acting as CFO, although that wasn’t the case, according to court filings.
In some cases, Hensley allegedly convinced the owners of some companies to sell their businesses to him in exchange for Desilu stock, even though it was worthless, prosecutors said.
Hensley has been charged with 11 counts of wire fraud and one count of identity theft. As of Wednesday, he hadn’t yet been arraigned and was still in the process of hiring a defense attorney. A message left at a phone number listed in Hensley’s name wasn’t immediately returned.
Desilu Productions was founded in 1950 by Lucille Ball and her husband Desi Arnaz and was sold to Gulf + Western in 1967, which renamed it Paramount Television. All the Desilu properties are now owned by CBS.
In 2018, CBS Studios Inc., filed a trademark infringement suit against Hensley, which it won the following year. A message sent to a representative for Paramount Global, which owns CBS, wasn’t immediately returned.
Hensley co-created the zinc-based, over-the-counter cold remedy Zicam in 1997. The remedy enjoyed commercial success but encountered regulatory scrutiny over its safety. It was acquired by Church & Dwight Co. in 2020 for $530 million.
In 2012, Hensley was sentenced to probation in federal court for marketing and selling a drug he claimed could cure bird flu but was never approved by the Food and Drug Administration.