Parker H. Petit, the previous MiMedx Group Inc. chief government officer convicted final yr of securities fraud, was sentenced Tuesday to 1 yr in jail.
“Jail time sends a deterrence message that may not be despatched by every other punishment,” Decide Jed S. Rakoff stated at a listening to in federal court docket in Manhattan.
Nonetheless, provided that Petit is 81, suffers from recurring bladder most cancers and has achieved a lot good all through his life, “I don’t suppose that this requires years and years of punishment,” Rakoff stated.
For Petit, it’s the tip of a enterprise profession that spanned greater than 5 many years earlier than it unraveled. He left the medical machine firm in June 2018 and was indicted a yr later, accused of bribing prospects, falsely recognising income and mendacity to the board and auditors.
He was discovered responsible on one of many two counts he confronted, which carried a possible most sentence of 20 years. Prosecutors had requested for a “substantial” imprisonment.
Petit’s former deputy, Invoice Taylor, was convicted on one rely of conspiracy, however acquitted of a second cost. Prosecutors have requested for the utmost 5 years for Taylor, who’ll be sentenced Wednesday.
Talking by video hyperlink, Petit stated he accepted accountability for the accounting irregularities, however “had no concept” his actions may very well be seen as fraud. He additionally criticised the quick sellers who had focused the corporate, calling their claims “ridiculous and false.”
In a letter to Rakoff dated February 16, he stated the shorts and others value him his profession, popularity and maybe his well being.
“My most cancers was most likely triggered by my frustrations with the unlawful quick sellers and the investigations that I believe went uncontrolled,” he wrote.
In late 2020, Petit employed Matt Schlapp, a outstanding conservative activist and lobbyist with sturdy ties to Donald J. Trump, to foyer for a presidential pardon, in line with a federal disclosure type. Petit was finance chairman of the previous president’s 2016 Georgia marketing campaign. The hassle, which value Petit $750,000, was unsuccessful.
Petit requested Rakoff to let him keep away from jail, saying any time behind bars might quantity to a “demise sentence” given his medical situation. About two dozen of his relations, associates and former colleagues additionally despatched the decide letters, vouching for his character.
“I do know that every one crimes require a motive, and I merely have no idea what could be the motivation for a profitable serial entrepreneur to turn out to be a fraudster on the age of 78,” wrote his spouse, Janet Petit.
It ‘s a query that’s dogged the previous CEO.
Earlier than popping out of retirement in 2011 to take over Marietta, Georgia-based MiMedx, Petit based and bought a number of biotech firms, amassing greater than $100 million within the course of. He owned a seaside mansion within the Florida Panhandle, and his identify adorned a biotech analysis heart on the Georgia Institute of Expertise and, later, Georgia State College’s soccer subject.
MiMedx, too, appeared like successful story, rising right into a $2 billion firm. However that rise got here on the heels of Petit and Taylor partaking in a scheme to maintain up an extended streak of beating more and more aggressive income targets, prosecutors stated final yr.
In 2017, quick sellers solid MiMedx’s financials into doubt. Federal investigators circled. The board started an inside probe and the inventory plummeted.
In interviews, former MiMedx staff advised tales of improper gross sales practices, illicit funds to medical doctors and a tradition the place those that raised considerations have been shut down. The board’s probe discovered Petit had ordered the set up of a video surveillance system that secretly recorded staff to search out and undermine whistleblowers.
Petit didn’t specific regret in his letter or at Tuesday’s listening to. Within the letter, he painted himself as a sufferer of conspiring quick sellers and regulators who intentionally flip enforcement right into a “witch-hunt.”
He singled out Marc Cohodes, calling him “some of the corrupt quick sellers within the nation.” Reached by telephone on Monday, Cohodes stated he thought of exposing wrongdoing at MiMedx as one among his best achievements.
“He’s the definition of a white-collar felony,” Cohodes stated.
Concluding his letter, Petit stated he’d already been “severely penalised” as a result of his 2018 resignation value him his severance settlement and deferred pay.
In January, MiMedx sued Petit, looking for to scrap its obligation to pay his authorized charges and recoup cash it has already spent. Petit stated that might find yourself costing him $15 million and push him shut to private chapter. He has but to formally reply to the swimsuit.
Rakoff stated he would have most likely sentenced Petit to 4 years in jail aside from the mitigating circumstances and the scant likelihood the previous CEO will commit one other crime.
“Nonetheless, jail time should be imposed,” he stated.
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