The investors behind a venture capital fund added accounting firm PricewaterhouseCoopers to a lawsuit alleging that the fund’s founder, biotech notable Stephen Burrill, and other fund executives looted it for $17 million.
The Burrill Life Sciences Capital Fund III 1st sued last July, accusing Burrill, longtime outside-counsel-turned-staff-counsel Victor Hebert and CFO Helena Sen of diverting the cash from the fund over a period of 5 years. In an Oct. 26 amended complaint, the fund also accused PwC of failing to catch the embezzlement, which at 1 point allegedly amounted to more than $21 million, according to court documents.
Calling Burrill a “fraudster,” the lawsuit alleges that he, Hebert and Sen “could not have pulled off this years-long looting campaign without the assistance of PwC, which, it turns out, was not the independent auditor it was supposed to be.”
“The Burrill defendant’s malfeasance came to light not because PwC, ostensibly the fund’s financial watchdog, blew the whistle, but because 3 senior insiders of Burrill’s organization finally didi so – sparking ongoing criminal and civil investigations by federal authorities,” the complaint alleges.
The alleged misappropriations came to light in the fall of 2013, when managing directors Ann Hanham, Roger Wyse and Bryant Fong noticed that the fund lacked the cash to meet its follow-on investment obligations. Burrill was oustered from the fund he started in March of last year.