Loan broker accused of bilking veterinarians sells wellness plans

Ron Paterson continues to be evasive

November 3, 2011 (published)
By Jim Downing

Ron Paterson, a veterinary loan broker with a history of fraud, now sells patient wellness plans under the name Pet Wellness USA, and some veterinarians who've dealt with the company suspect the venture has dubious underpinnings.

The new company and criticisms tied to it come on the heels of a VIN News Service investigation and article that explored Paterson's dealings as the head of loan brokerage firm VetFinance Group. Published in June, the article explored complaints from veterinarians who posted on the Veterinary Information Network (VIN), an online professional community and parent company of the VIN News Service.

Paterson's legal record during the past six years includes three fraud-related judgments totaling more than $750,000. None is connected to the veterinary profession.

Paterson's troubles with veterinarians have not resulted in civil litigation or criminal charges. He did not respond to requests from the VIN News Service to explain his legal troubles, alleged disreputable dealings with practitioners or accusations that his pet wellness company, which sells wellness plans to veterinary clients in exchange for an upfront fee from practice owners, is slow on reimbursements and failed to pay at least one employee.

Paterson opened his wellness and patient finance businesses early this year. In February, he announced on his blog the launch of My Pet Wellness Plan and a patient-finance program branded as VetOne. By May, he had hired sales representatives and was selling plans to veterinary practices. A month later, an Atlanta-area sheriff's department began investigating Paterson for suspected fraud based on reports that he failed to make payments to several veterinarians and at least one employee who had aligned with his new companies.

It's unclear when My Pet Wellness Plan and VetOne were disbanded, but the websites for both businesses no longer functions.

Paterson relaunched his wellness business under the Pet Wellness USA name in late August. This time, however, Paterson didn't trumpet his involvement with the new company. On Aug. 24, an advertisement for Pet Wellness USA was posted on the My Pet Wellness Plan Facebook page by a user named RJ Pearson. The same day, VetFusion Inc., which is identified as the corporate name of Pet Wellness USA on the company's website, filed as a business entity with the Nevada Secretary of State. VetFusion still has not filed a list of officers with the state, meaning that no names are associated with the firm in the public record, and its business registration is in default. However, a Pet Wellness USA representative who answered the company's toll-free telephone number stated that VetFusion is run by Ron Paterson.

Paterson has not responded to multiple calls and emails from the VIN News Service seeking comment. Posts on an anonymous blog created in July contend that Paterson has a good record as a loan broker and that the VIN News Service article featuring Paterson unfairly focused on the concerns of dissatisfied clients.

The article reported allegations from several veterinarians that Paterson took upfront brokerage fees of several thousand dollars and then became difficult to contact and did not deliver the loans he promised. The piece also recounted Paterson's history of legal and financial trouble, including a $49,000 judgment against him in 2009 in connection with a fraudulent veterinary equipment leasing scheme; a $694,000 judgment in 2005 for pocketing nearly half-a-million dollars in a separate (non-veterinary) equipment leasing fraud; three felony theft charges (ultimately dropped) related to a rock concert he promoted in Arizona in 2006; a Chapter 7 bankruptcy filed in 2007; and an ongoing investigation into Paterson's involvement in the disappearance of $9,000 in funds raised by the Anaheim, Calif., Pop Warner Football League.

The accounts of two veterinarians who did business with My Pet Wellness Plan are similar to those provided by unhappy clients of Paterson's loan brokerage.

Dr. Gerald Skees, a veterinarian in Woodstock, Ga., said he signed up four clients for Paterson's wellness plan. Under the agreement with My Pet Wellness Plan, clients would pay Paterson a set monthly fee, which would cover regular veterinary care for a year. Skees was promised an upfront payment of $700 within 72 hours for each client who signed up for the service.

After 10 days passed without receiving the promised payment, Skees began to worry. His receptionist called Paterson, who promised that the money was on its way. At the same time, according to Tracy Parsons, who was hired in May as the My Pet Wellness Plan sales representative in the Atlanta area, two other local veterinarians also reported delayed payments. In addition, Parsons wasn't getting paid by Paterson for her work.

Then, Parsons said, she read the VIN News Service article on Paterson and decided to report him to her local sheriff's department.

"Lo and behold, within a day or two, we received all our money," Skees said.

Parsons said she broke off contact with Paterson on the advice of law enforcement officials and stopped marketing his services. Cherokee County Sheriff's Department Detective Jeff Donley said he did not receive additional local complaints about Paterson. Law enforcement officials in Arizona and California, where Paterson had previous legal trouble, showed little interest in working with him to investigate Paterson, Donley said.

In Orange, Calif., Dr. Richard Dahlem signed up for Paterson's patient finance program in response to an advertisement faxed to his practice. Dahlem was suspicious of Paterson. "He said he had a $100-million line of credit with a bank in Chicago, but when I asked him which bank, and he hemmed and hawed and never did say," Dahlem recalled.

Despite his reservations, Dahlem paid Paterson's $399 enrollment fee and shortly thereafter used the program to help a patient finance a $1,150 procedure. According to the finance arrangement, Paterson was to send Dahlem $700 within 72 hours. A month later, after six follow-up calls to Paterson, the money finally arrived. Around the same time, Dahlem read the VIN News Service article on Paterson. When Paterson next called to encourage Dahlem to enroll in his wellness plan, Dahlem told him about the article and ended their business relationship.

During his phone conversation with Paterson, Dahlem recalled: "He was calling VIN names, saying how he was going to take VIN to court, that it was all lies and misunderstandings. He's a lot of hot air, frankly."

(To date, Paterson has not taken legal action against VIN or the VIN News Service.)

While Paterson has transitioned to the pet wellness business, the fate of his loan brokerage firm VetFinance Group is unclear. The company's website is down, but a veterinarian who is in the midst of a loan deal involving Paterson told the VIN News Service that he hears from him regularly.

The veterinarian, who requested anonymity while in negotiations, is hopeful that a loan will come through to refinance his practice. Given his experience with Paterson, the veterinarian is wary. He's attempting to work directly with a bank and cut Paterson out of the picture.

"Frankly, I've been dealing with Ron for many months; it's been absolutely exasperating," he said, having already paid Paterson thousands of dollars for refinancing deals that haven't materialized. "He preys upon your hope until you give up."

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