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SEC Sues Skin Nuvo: False promises & bankruptcy.

nuvo17.jpgMedical spa franchises are getting a lot of bad press lately. The Wall Street Journal article: Medspa boom is a bust for some being just the latest. 

Last year Skin Neuvo made some waves by opening a lot of locations. It would seem that Skin Neuvo's fouders were building a business on a foundation of lies, false promises, and fraud. I would think that Ron Berglund might be right when he predicts a 'huge shakeout' in the medical spa market next year.

From the story: Three men, including a Concord resident, were sued by the Securities and Exchange Commission on Wednesday on charges that they swindled more than $11 million from investors in a skin-care business that later filed for bankruptcy.

Jeffrey Schmidt, 45, of Henderson, Nev., the co-founder of Skin Nuvo International, falsely promised investors profits of up to 40 percent, knowing that the company was in precarious financial shape, according to a suit filed by the SEC in U.S. District Court in San Francisco.

Norman Valine, 39, of Las Vegas, Skin Nuvo's former chief operating officer, and company co-owner Gary Gelnette, 51, of Concord raised money from new investors even after suspecting that Schmidt may have embezzled funds and falsified financial records, the suit said.

Gelnette, a former pastor, helped raise $1.35 million from a then-parishioner in 2004, authorities said. Valine earned $138,000 in commissions by selling Skin Nuvo interests to four additional investors, and Schmidt paid himself more than $680,000 and Gelnette about $260,000, the SEC said.

"Rather than using investor funds to finance new stores, as promised, Schmidt used the money to pay the debts, construction costs and payroll for the older stores," the suit said.

The SEC suit seeks to bar the men against any future violations of securities laws, a civil monetary penalty and the recovery of any ill-gotten gains.Se

Reader Comments (9)

Ah, Nuvo, those were the days! I started out working as a nurse for Nuvo, and what a mess! Sales driven, the sales people by far made a ton of money, while the nurse were working an assembly line environment. The staff turn-over rate was high. And if you did not do treatments the sales people ask you to do, (that may or may not be safe or ethical), you would get fired!
I stay for 2 1/2 years, thru the bankruptcy, then the buy out by Golden Capital, and less than a year later, Pure laser. There were times I did not get paid, which was later settled in bankruptcy court. In between buy outs, venders were not getting paid, and nurses did not have supplies, e.g. towels, jells and creams, and even meds. Anyway, I can go on and on, but I won't. I'm grateful I got out of there without major injury to patients due to equipment malfunction or maintenance.
I pride myself as being a safe, efficient practitioner. It save me from hungry, greedy sales people. Watch out for "Pure", for some reason they hired Norman Valine back! People were stun! Shortly after that, I was let go, mostly because I had too much history. At the end I came out ahead, (I won't go into details).
Oh, yeah, as far as doctors on site, When I left, they did not have a doctor for any of the five stores. We would have to call a Chicago doctor for any problems. It's like Nuvo all over. The same sells staff and management. Beware!

01.10 | Unregistered CommenterNorCalRN

Responding to NOrCalRN, Re Nuvo and Pure
Are these the same people running NuU MedSpa

02.12 | Unregistered CommenterJCRN


I too started from the beginning with Nuvo, the idea was great until greed set in. I as a manager questioned issues in the beginning such as our budget reports for the location, why there was not any training quotas or requirements set in place, I did not feel comfortable having estheticians fresh out of school, do a 1 hour course on a lazer and then begin unsupervised treatments. When I began my own in house requirments and as well as called the representative for the laser we used to come into our clinic to to direct training, I was advised by them that the protocals set by nuvo were not supported by the company and deemed what we were doing extreemly dangerous. I was then told by corperate when I questioned them to just do my job and that they were the ones who had experience. There was also a time where employee checks bounced, then the state began to call regarding our employment tax, Since all i didi was report hours to corporate i had limited info.I did call them with no response and the state stated they have called corporate with no response. I did file myself for a while but was told by corporate I was not to do this. So I stopped.

I was consistantly baddgered by Jeffrey schmidt daily. We had 1 foot of snow , all roads were closed the mall was closed and my techs could not make it it. I did to answer phones. He called and yelled at me as to why we did not have any sales, he didn't care get my ass on the phone and make some.

There were times when there was no money to buy toilet paper, let alone supplies. We had 1 registered nurse whom I had alot of respect for however she felt the burden of the company doing things that shouldn't be done. Our Dr. or 1st Dr. also did not feel comfortable putting herself on the line for unethical medical procedures. They wanted us to give out presciption strength lidocane cream with our a prescription, i told them I would not do this in my clinic, the Dr agreed since they lived in a different town.

I pride myself on my location, i did make sure my techs had adequate trainging. With of course coorperate breathing down my neck to just get them started. I eventually became a sales consultant, where i did more educating than sales for patients. I was not the type to just sell to sell, there had to be a reason and I wanted to see it work. I was also pressured about this. Twards the end I was pushed out by corporate as did all the original managers,who began to question their plans, I left and could not believe what had happened ok yes.. they all had it coming......

You mean that there is a medical spa franchise that is scamming people? Who would have heard of such a thing!


the list goes on

03.26 | Unregistered CommenterSW Tom

Have any of these lawsuits ever panned out? don't these companies just fold up and go away?

03.26 | Unregistered CommenterTerry C

Really?? It seems some people are bitter. I worked for Norman a short while. I never heard or saw any kind of inproper behavior. You should all be ashamed of yourselves. You worked for the company and took money, got free treatments and don't doubt some of you took advantage of a small growing BIG idea company. To file a classaction??? You're sheep. You should all look in the one is perfect. Nu-U may have struggles, but it's on the road to greatness. The backbone of the company, the people with ideas and dreams can only do so much. The people who are just along for the ride are the ones that give Nu-U the bad rep and foul up the name. (these less than admiral front line people, seem to be the ones that the public and client have issues with.)

08.10 | Unregistered Commenteryur sheep

Why is Nu U being sued by the Illinois Attorney General's office?

Where there's smoke, there's fire!

I worked for them also, and was taken for about 16K in wages never paid. I was the only person in the entire company that had documentation showing deliberate violations of federal labor laws on a regular basis. And the bankruptcy court dismissed them all (justice being for those who can afford to buy Nevada judges & Texas attorneys, not the one who gets cheated). Incidentally, I was extremely careful,. never had a problem. BUT I would call the laser company (Syneron) & remove machines which were apparently malfunctioning, etc. (the other staff used them, never calibrated them), refused to accept people the sales people thought were good bets (the guy with granuloma annulare, for example). It was so egregious the state Board of Nursing changed the Nurse Practice Act because of this company. I also am aware of clients who lost thousands in services never rendered. And yes, the principals went right out & have started (at my last count) another 3 corporations that work in the same way (til they get caught but after there's been a pile of money made). And at least one of the companies was outside of numerous state laws. Nothing ever done.

07.17 | Unregistered CommenterSoCalRN

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