SAN RAFAEL, Calif. (BCN) - The president and chief executive officer of San Rafael-based medical device company Sanovas has been indicted by a federal grand jury on three counts of wire fraud and money laundering, federal law enforcement officials said.
Lawrence J. Gerrans is accused of employing a number of fraudulent methods to siphon funds from Sanovas.
Between April 2013 and May 2014, he allegedly withdrew a total of $500,000 from his personal individual retirement account and used the funds to pay for personal expenses, including vacations, jewelry and spa treatments.
In March 2015, according to the U.S. Attorney's Office, he claimed that he had used the IRA funds for the company's business and requested reimbursement from Sanovas' newly formed board of directors as deferred compensation.
Gerrans is also accused of orchestrating the payment of bogus consulting fees to a separate company that he owned, Halo Management Group, LLC.
He was allegedly responsible for Halo submitting invoices to Sanovas, despite the fact that Halo was not a legitimate independent consulting firm and provided no independent services to Sanovas.
Gerrans also allegedly directed an employee to create after-the-fact accounting entries for consulting and professional services that Halo never provided to Sanovas.
Gerrans also is accused of creating a shell company, Hartford Legend Capital Enterprises, to receive money from Sanovas and Halo to facilitate the purchase of a San Anselmo home for $2,570,000.
The payments were allegedly orchestrated by Gerrans without the knowledge or approval of Sanovas' board of directors.
Gerrans is charged with three counts of wire fraud and one count of money laundering. If convicted, he faces a maximum sentence of 20 years in prison for the wire fraud counts and 10 years for money laundering.
He is scheduled to make his initial federal court appearance on July 29.