The U.S. Securities and Exchange Commission on Thursday accused a healthcare company executive of misappropriating more than $10 million from investors who were told their money would be used to develop cancer screening and treatment technology.

In a complaint filed in Massachusetts federal court, the SEC alleges that Sumit Rai, the chief executive of NVS Med Inc. and Onco Filtration Inc., diverted investor funds for personal expenses, including credit card debt, luxury vehicles and entertainment. The agency also accused Kim de Mora, the founder and former CEO of SVN Med LLC, of aiding and abetting the alleged fraud.

According to the SEC, the three companies raised more than $26 million from over 180 investors between November 2019 and September 2023. Investors were told the companies were developing a device designed to filter circulating tumor cells from a patient’s bloodstream, with claims that the technology could help treat, prevent or diagnose cancer.

Some investor materials described the device as a form of “cancer dialysis,” the complaint says.

Instead of using the funds for research and development, the SEC alleges Rai misappropriated approximately $10.6 million. The agency claims Rai withdrew roughly $5.1 million in cash, paid about $2.3 million toward personal credit card debt, covered at least $1 million in unrelated debts incurred by a business associate and purchased approximately $850,000 worth of luxury vehicles.

The SEC further alleges that Rai spent a substantial portion of the cash withdrawals on restaurants, nightclubs and entertainment in an effort to attract celebrities and investors. According to the complaint, Rai also spent about $85,000 of investor funds at a Texas strip club over two days.

The agency also claims the defendants repeatedly restructured investor obligations. Investors initially held convertible promissory notes issued by SVN Med and NVS Med, which were later consolidated under Onco Filtration through a series of assignments and conversions.

In September 2023, the SEC alleges Rai induced investors to exchange those notes for nonconvertible promissory notes payable by Onco. Payments due at the end of 2024 were allegedly unilaterally extended by Rai, and no payments have been made through at least August 2025 on notes valued at more than $210 million.

The complaint further alleges Rai concealed the creation of a separate entity, Cancer Check, which obtained exclusive rights to sell Onco products without paying Onco for them. According to the SEC, Cancer Check generated approximately $1 million in revenue while providing no compensation to Onco or its investors.

Cancer Check is named as a relief defendant in the case.

The SEC is seeking disgorgement, civil penalties, officer-and-director bars against Rai and de Mora and a jury trial.

In a statement to Law360, Rai said he disputes the allegations and will address them in court. The SEC declined further comment.

The SEC is represented in-house by Kathleen Burdette Shields and Brandon Sisson. Counsel information for the defendants was not immediately available.

The case is Securities and Exchange Commission v. Rai et al., case number 1:26-cv-10159, in the U.S. District Court for the District of Massachusetts