A federal jury in San Francisco convicted former Sanovas president & CEO Larry Gerrans this week of wire fraud and money laundering in connection with a scheme to defraud the medical device company.
The jury also found Gerrans, 49, of San Anselmo, Calif., guilty of engaging in monetary transactions in criminally derived property, making false statements to a government agency, contempt of court, witness tampering and obstruction of justice.
Evidence presented at the two-week trial showed that in 2015, Gerrans transferred more than $2.6 million from Sanovas to himself and two shell companies he controlled, Halo Management Group and Hartford Legend Capital Enterprises. Gerrans used that money to buy a $2.57 million home in San Anselmo. At least $2.3 million of this money was laundered through Hartford Legend before being paid to the escrow account to purchase the house, according to federal prosecutors.
Gerrans also used money he took from a company retirement account in 2013 and 2014 to buy a Maserati and a diamond ring and to pay his rent, and later asked the San Rafael-based company’s newly created board of directors to reimburse him for the money, prosecutors said. They also presented evidence showing that Gerrans used a Sanovas corporate credit card in 2017 to pay for a $44,000 vacation timeshare, $12,500 for carpeting for his home, and $32,000 to pay property taxes.
“The defendant siphoned millions of dollars from the medical device company he was entrusted to run, and then tried to cover up that crime,” said U.S. Attorney David L. Anderson in a news release. “Insider schemes like these injure companies, employees, and investors, and undermine the public’s trust in our business community.”
Gerrans faces up to 55 years in prison and fines of at least $250,000 for each violation of federal law, plus restitution for each count of wire fraud . The judge will determine the sentence for each count of obstruction of justice and could fine Gerrans double the amount of the criminally derived property. Sentencing is scheduled for May 20, 2020.