A federal grand jury last week indicted Sanovas president & CEO Larry Gerrans on three counts of wire fraud and money laundering for alleged schemes to pay cash for a home and “myriad” personal expenses. Gerrans has denied the charges via a company spokesman.
According to federal prosecutors and the FBI, Gerrans “employed a number of fraudulent methods to syphon funds out of Sanovas” from April 2013 to May 2015, including the withdrawal of $500,000 from his personal IRA to pay for personal vacations, jewelry and spa treatments. Prosecutors alleged that Gerrans told a newly convened board of directors in March 2015 that the IRA funds were used for business expenses and requested reimbursement as deferred compensation.
Gerrans also allegedly conducted bogus fee payments to a consulting company he owned, Halo Management Group, directing an employee after the fact to falsify accounting entries “for consulting and professional services that Halo never actually provided to Sanovas,” the prosecutors alleged.
And a $2.6 million home in San Anselmo, Calif., Gerrans purchased was allegedly financed via payments from Sanovas and Halo to a shell company he incorporated in Nevada, they alleged.
A Sanovas spokesman for Gerrans, who faces three counts of wire fraud and a single count of money laundering, denied the charges, according to Bay City News.
“There is no truth to these allegations whatsoever,” the spokesman said. “The company and Mr. Gerrans vehemently deny them.
“The government should have raised any accounting questions it had with Mr. Gerrans directly, and he would have gladly provided the government with clear justification for each and every one of these payments,” he said, according to the website. “Instead, the government chose to take this extraordinary, completely unwarranted and unfortunate step without seeking any clarifying facts in the matter.”
If convicted Gerrans faces a maximum of 20 years and $250,000 in fines for the wire fraud scheme and 10 years and $250,000 for the money laundering charge. He’s slated to make an initial appearance in the U.S. District Court for Northern California July 29 before Magistrate Judge Sallie Kim.