Signia Marketing’s headquarters is at 6521 W. 91st Ave. in Westminster. (Apple)
A marketing firm in Westminster has declared bankruptcy after it was found to have falsified sales of erectile dysfunction medication by inventing fake salespeople and sending the drugs to patients who had been told by doctors not to ingest them.
Signia Marketing, founded in 2010, operates call centers in Greeley and Virginia. It has 100 employees, according to paperwork it filed in U.S. Bankruptcy Court last week.
The company also has $440,000 in assets — mostly office furniture and equipment — but owes $5.5 million to more than 100 people and companies. CEO Jeffrey Fell wrote in an affidavit Friday that “Signia has operated at a loss every year since 2018, other than in 2020.”
That year, Signia was sued in Las Vegas by a company called Male Excel. The doctor-owned medical group founded in 2018 prescribes and ships erectile dysfunction treatments. It hired Signia in 2018 to make sales calls and paid it an hourly rate, plus commissions.
“Signia took advantage of Male Excel’s status as a startup, as well as its trust,” Clark County District Court Judge Mark Denton wrote in a 72-page ruling this August.
A 14-day trial convinced him that Signia “inflated its sales figures” by not telling Male Excel customers that they would be billed more than once, by continuing to bill them after they canceled, and by signing up patients who had been denied a prescription by doctors.
“These actions by Signia had potential life-threatening implications for Male Excel patients as ED prescriptions may have serious side effects,” the judge determined.
Signia was paid a commission for each sale made, even if patients later canceled and received a refund. That incentivized fraudulent sales, according to Denton. When a middle manager at Signia realized what was happening, she voided fake sales immediately. Her boss texted her, “Don’t do that anymore, wait until the next day,” to ensure Signia got the commission.
“Signia produced no evidence to rebut Male Excel’s compelling evidence that a number of fake Signia sales agents were created and used to engage in false sales,” Denton wrote.
As customer complaints and refunds soared, Male Excel went in search of the problem. It asked Signia to take part in an audit and hand over recorded calls between Signia and patients; Signia refused. So, Male Excel ended their contract in 2020 and ordered Signia not to destroy evidence of its deception, since Male Excel was preparing to sue.
Signia did not follow those instructions. Most notably, a top manager’s laptop was thrown away. He later testified that his 1-year-old child closed the laptop with a toy inside, destroying the hard drive and forcing him to discard it, with permission from a Signia executive.
Denton has ordered Signia to pay just over $2 million to Male Excel for breach of contract and unjust enrichment. At a hearing Oct. 23, he will determine how much additional money Signia must pay in attorney fees and sanctions for destroying evidence, such as the laptop.
On Sept. 27, the same day that it filed for Chapter 11 bankruptcy, Signia appealed the judge’s August ruling to the Nevada Supreme Court. That court has not yet weighed in.
“Signia has filed an appeal to address what it believes is reversible error in the trial court’s judgment,” the company said in a statement to BusinessDen. “Signia is confident that an appellate review will result in an outcome more favorable to the entire body of creditors.”
In addition to the money it owes Male Excel, Signia owes $2.6 million to lenders, $385,000 to a landlord and $180,000 to lawyers. Signia borrowed $1.6 million from the federal government in recent years but that debt was forgiven under the Paycheck Protection Program.
“The judgment in the Male Excel litigation was the proverbial ‘straw that broke the camel’s back,’ leaving Signia with bankruptcy protection as its only option,” its statement claimed.
“The good news is that Signia is planning to reorganize its liabilities and emerge from bankruptcy better able to compete and provide the highest levels of service to current and future clients,” it said.
In Nevada, Signia is represented by lawyers Jay Devoy, Joseph Went and Robert Cassity from the national firm Holland and Hart. Its bankruptcy attorney is David Wadsworth from Wadsworth Garber Warner Conrardy in Littleton.
Male Excel’s lawyers are Eric Hone and Leslie Godfrey with Hone Law in Nevada.
Signia Marketing’s headquarters is at 6521 W. 91st Ave. in Westminster. (Apple)
A marketing firm in Westminster has declared bankruptcy after it was found to have falsified sales of erectile dysfunction medication by inventing fake salespeople and sending the drugs to patients who had been told by doctors not to ingest them.
Signia Marketing, founded in 2010, operates call centers in Greeley and Virginia. It has 100 employees, according to paperwork it filed in U.S. Bankruptcy Court last week.
The company also has $440,000 in assets — mostly office furniture and equipment — but owes $5.5 million to more than 100 people and companies. CEO Jeffrey Fell wrote in an affidavit Friday that “Signia has operated at a loss every year since 2018, other than in 2020.”
That year, Signia was sued in Las Vegas by a company called Male Excel. The doctor-owned medical group founded in 2018 prescribes and ships erectile dysfunction treatments. It hired Signia in 2018 to make sales calls and paid it an hourly rate, plus commissions.
“Signia took advantage of Male Excel’s status as a startup, as well as its trust,” Clark County District Court Judge Mark Denton wrote in a 72-page ruling this August.
A 14-day trial convinced him that Signia “inflated its sales figures” by not telling Male Excel customers that they would be billed more than once, by continuing to bill them after they canceled, and by signing up patients who had been denied a prescription by doctors.
“These actions by Signia had potential life-threatening implications for Male Excel patients as ED prescriptions may have serious side effects,” the judge determined.
Signia was paid a commission for each sale made, even if patients later canceled and received a refund. That incentivized fraudulent sales, according to Denton. When a middle manager at Signia realized what was happening, she voided fake sales immediately. Her boss texted her, “Don’t do that anymore, wait until the next day,” to ensure Signia got the commission.
“Signia produced no evidence to rebut Male Excel’s compelling evidence that a number of fake Signia sales agents were created and used to engage in false sales,” Denton wrote.
As customer complaints and refunds soared, Male Excel went in search of the problem. It asked Signia to take part in an audit and hand over recorded calls between Signia and patients; Signia refused. So, Male Excel ended their contract in 2020 and ordered Signia not to destroy evidence of its deception, since Male Excel was preparing to sue.
Signia did not follow those instructions. Most notably, a top manager’s laptop was thrown away. He later testified that his 1-year-old child closed the laptop with a toy inside, destroying the hard drive and forcing him to discard it, with permission from a Signia executive.
Denton has ordered Signia to pay just over $2 million to Male Excel for breach of contract and unjust enrichment. At a hearing Oct. 23, he will determine how much additional money Signia must pay in attorney fees and sanctions for destroying evidence, such as the laptop.
On Sept. 27, the same day that it filed for Chapter 11 bankruptcy, Signia appealed the judge’s August ruling to the Nevada Supreme Court. That court has not yet weighed in.
“Signia has filed an appeal to address what it believes is reversible error in the trial court’s judgment,” the company said in a statement to BusinessDen. “Signia is confident that an appellate review will result in an outcome more favorable to the entire body of creditors.”
In addition to the money it owes Male Excel, Signia owes $2.6 million to lenders, $385,000 to a landlord and $180,000 to lawyers. Signia borrowed $1.6 million from the federal government in recent years but that debt was forgiven under the Paycheck Protection Program.
“The judgment in the Male Excel litigation was the proverbial ‘straw that broke the camel’s back,’ leaving Signia with bankruptcy protection as its only option,” its statement claimed.
“The good news is that Signia is planning to reorganize its liabilities and emerge from bankruptcy better able to compete and provide the highest levels of service to current and future clients,” it said.
In Nevada, Signia is represented by lawyers Jay Devoy, Joseph Went and Robert Cassity from the national firm Holland and Hart. Its bankruptcy attorney is David Wadsworth from Wadsworth Garber Warner Conrardy in Littleton.
Male Excel’s lawyers are Eric Hone and Leslie Godfrey with Hone Law in Nevada.
