Marin County biotech ex-CEO sentenced to 11 years for money laundering scheme
A former Marin County biotechnology company CEO was sentenced in federal court to 11 years on accusations of a money-laundering scheme that involved the San Rafael firm he founded, the U.S. Attorney’s Office announced Friday.
Lawrence Joseph Gerrans, 50, of San Anselmo, was convicted of funneling millions of dollars from Sanovas Inc. — a medical device company that has opened offices in San Rafael, Petaluma and Sausalito since he launched it eight years ago. He used the money to buy millions of dollars in luxury goods, according to the prosecutors.
Those expenditures include a $2.5 million home, Maserati, diamond ring and other personal items. He also placed a $44,000 vacation timeshare on the corporate credit card, along with $12,500 in home carpeting and $32,000 in property taxes.
From January to March 2015, Gerrans transferred funds through fraudulent invoices and accounting book entries through two company holdings to make the purchases. They are Halo Management Group located in El Dorado Hills and Hartford Legend Capital Enterprises, based in Reno, Nevada, the federal prosecutors recounted.
His wife, Sarah Gerrans, was listed as a company officer on the former firm. According to the case text, the couple had filed for personal bankruptcy.
The criminal sentence resulting from multiple counts of wire fraud, money laundering, witness tampering and obstruction of justice, followed a guilty verdict after a two-week trial from last January. Gerrans also provided false statements to the Federal Bureau of Investigations related to the probe, prosecutors added.
Beyond ordering the jail sentence, U.S. District Judge Edward Chen in San Francisco also imposed a three-year term of supervised release to start after the prison term.
After his July 2018 indictment while released on bond, Gerrans violated the terms of the bond “by intimidating, harassing and improperly communicating with his brother, Chris Gerrans, who was also the subject of a related FBI investigation,” the case opinion reads.
The defendant’s brother could not be reached for comment.
Inquiries made by the Business Journal to Gerrans’ defense attorney, Shawn Halbert, were unanswered, but Halbert told the Marin Independent Journal the defendant “maintains his innocence.”
“He did not receive a fair trial and was convicted on the basis of false and incomplete evidence,” Halbert told the newspaper.
Requests to speak to board Chairman Jerry Katzman, a doctor who serves as president and CEO, according to the company website, were unanswered.
Nonetheless, a spokesperson who wished to be unidentified because of company policy provided a statement about the sentencing issued from the 2020 board of directors, which also includes:
“The sentencing allows us to close a very painful chapter in our company’s history. What happened was truly sad. We are still dealing with the aftereffects. We are currently making great strides in getting Sanovas back on track. We appreciate the hard work and dedication of the U.S. Attorney’s Office and the FBI on this case. They are truly dedicated public servants who did yeoman’s work to bring a measure of justice to this case,” the statement signed “sincerely” reads.
Prosecutors noted Gerrans had also lied to board members “to seek their approval for a lucrative compensation plan and for reimbursement of retirement account funds that Gerrans had liquidated in 2013 and 2014,” the feds reported.
In those two years, Gerrans withdrew $500,000 from his personal individual retirement account to pay for his lavish lifestyle. By the time 2015 rolled around, he claimed the Sanovas funds as deferred compensation.
Sanovas develops micro-surgical devices used for diagnosing and treating cancer and chronic diseases. The better known product is the MicroCam, which offers an elevated level of imaging during surgery.
The company’s website provides a synopsis of the defendant’s motivation for founding the organization based on personal experiences. “The genesis” for its founding was Gerrans’ account of watching an elementary school classmate almost die from an asthma attack and losing a friend’s mother, who was a surrogate to him, from lung cancer.
Susan Wood covers law, cannabis, production, energy and agriculture as well as banking and finance. For 25 years, Susan has worked for a variety of publications including the North County Times in San Diego County, Tahoe Daily Tribune and Lake Tahoe News. She graduated from Fullerton College. Reach her at 530-545-8662 or email@example.com.