CAMDEN, N.J. (AP) — The chief operating officer of a Philadelphia-based technology startup company orchestrated a long-running securities offering fraud while simultaneously embezzling hundreds of thousands of dollars from the firm, according to federal prosecutors in New Jersey.
Joseph Geromini, 54, of Linwood, New Jersey, faces 10 counts of wire fraud and two counts of securities fraud in an indictment that was unsealed Wednesday. He was due to make his initial court appearance via video conference later in the day, and it wasn't known if he's retained an attorney.
The tech startup specialized in the development of point-of-care diagnostic testing of various diseases, prosecutors said, and Geromini controlled its bank and debit card accounts. He also was responsible for soliciting investments in the company through debt and equity fundraising.
From July 2018 through October 2018, the company raised about $2.25 million of investor funds. Geromini misrepresented to investors that he would use the money to pursue the company’s business plan, but he instead diverted significant portions of the funds to pay himself hundreds of thousands of dollars through unauthorized wire transfers and make ATM cash withdrawals and debit card transactions, prosecutors said.
Geromini frequently misrepresented to the company that the unauthorized wire transfers were intended to compensate him for his employment, prosecutors said. Geromini told the company’s chief executive officer that he had twice secured contracts on behalf of the company with third parties and was, pursuant to his employment agreement, entitled to separate bonus payments.
The U.S. Securities and Exchange Commission has filed a civil complaint against Geromini based on the allegations underlying the securities fraud charges, prosecutors said.