Parker H. Petit, the previous MiMedx Group Inc. chief government officer convicted final year of securities fraud, was sentenced Tuesday to 1 year in prison.
“Prison time sends a deterrence message that can not be sent by any other punishment,” Judge Jed S. Rakoff stated at a listening to in federal court docket in Manhattan.
Still, provided that Petit is 81, suffers from recurring bladder cancer and has accomplished a lot good all through his life, “I don’t think that this requires years and years of punishment,” Rakoff stated.
For Petit, it’s the top of a business career that spanned greater than 5 many years earlier than it unraveled. He left the medical machine company in June 2018 and was indicted a year 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 potential most sentence of 20 years. Prosecutors had requested for a “substantial” imprisonment.
Petit’s former deputy, Bill 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.
Speaking by video hyperlink, Petit stated he accepted accountability for the accounting irregularities, however “had no idea” his actions might be seen as fraud. He additionally criticised the short sellers who had focused the company, calling their claims “ridiculous and false.”
In a letter to Rakoff dated February 16, he stated the shorts and others price him his career, status and maybe his well being.
“My cancer was probably triggered by my frustrations with the illegal short sellers and the investigations that I think went out of control,” he wrote.
In late 2020, Petit employed Matt Schlapp, a distinguished conservative activist and lobbyist with sturdy ties to Donald J. Trump, to foyer for a presidential pardon, in keeping with a federal disclosure kind. Petit was finance chairman of the previous president’s 2016 Georgia marketing campaign. The effort, which price Petit $750,000, was unsuccessful.
Petit requested Rakoff to let him keep away from prison, saying any time behind bars may quantity to a “death sentence” given his medical situation. About two dozen of his relations, buddies and former colleagues additionally despatched the choose letters, vouching for his character.
“I know that all crimes require a motive, and I simply do not know what would be the motivation for a successful serial entrepreneur to become a fraudster at the age of 78,” wrote his spouse, Janet Petit.
It ‘s a question that’s dogged the previous CEO.
Before 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 in the method. He owned a seaside mansion in the Florida Panhandle, and his title adorned a biotech analysis middle on the Georgia Institute of Technology and, later, Georgia State University’s soccer discipline.
MiMedx, too, appeared like a success story, rising into a $2 billion company. But that rise got here on the heels of Petit and Taylor partaking in a scheme to maintain up a lengthy streak of beating more and more aggressive income targets, prosecutors stated final year.
In 2017, short sellers cast MiMedx’s financials into doubt. Federal investigators circled. The board started an inside probe and the stock plummeted.
In interviews, former MiMedx workers informed tales of improper gross sales practices, illicit funds to medical doctors and a tradition the place these who 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 workers to seek out and undermine whistleblowers.
Petit didn’t specific regret in his letter or at Tuesday’s listening to. In the letter, he painted himself as a sufferer of conspiring short sellers and regulators who intentionally flip enforcement into a “witch-hunt.”
He singled out Marc Cohodes, calling him “one of the most corrupt short sellers in the country.” Reached by cellphone on Monday, Cohodes stated he thought-about exposing wrongdoing at MiMedx as certainly one of his best achievements.
“He’s the definition of a white-collar criminal,” Cohodes stated.
Concluding his letter, Petit stated he’d already been “severely penalised” as a result of his 2018 resignation price him his severance settlement and deferred pay.
In January, MiMedx sued Petit, searching for to scrap its obligation to pay his authorized charges and recoup money it has already spent. Petit stated that might find yourself costing him $15 million and push him near personal chapter. He has but to formally reply to the go well with.
Rakoff stated he would have in all probability sentenced Petit to 4 years in prison apart from the mitigating circumstances and the scant probability the previous CEO will commit one other crime.
“Nevertheless, prison time must be imposed,” he stated.
© 2021 Bloomberg