Manhattan U.S. Attorney Announces Arrest In Scheme To Defraud Investors In Purported Medical And Pharmaceutical Businesses
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and William F. Sweeney Jr., Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of a criminal Complaint charging PATRICK MURACA with wire fraud, in connection with a scheme to defraud investors in purported medical and pharmaceutical companies owned and controlled by MURACA. MURACA was arrested this morning in Pittsfield, Massachusetts, and is expected to be presented in federal court in Springfield, Massachusetts, later today.
Acting U.S. Attorney Joon H. Kim said: “Patrick Muraca promised investors their money would be used to expand his businesses, but as alleged, he instead used those funds to line his pockets. Thanks to the investigative work of the FBI, Muraca must now answer for his fraud.”
FBI Assistant Director-in-Charge William Sweeney said: “The prevalence of fraud in today’s society is simply troubling. Misappropriating investor funds for one’s own indulgences will never be taken lightly, and fraud of any kind will be thoroughly investigated.”
According to the allegations in the Complaint unsealed today in Manhattan federal court:
MURACA, the former President of Nuclea Biotechnologies, Inc., which filed for bankruptcy in August 2016, founded two new businesses in 2016: NanoMolecularDX LLC (“NanoMolecular”) and MetaboRx LLC (“Metabo”). In sworn testimony during a deposition conducted by the Securities and Exchange Commission (“SEC”) in April 2017, MURACA stated that NanoMolecular’s primary business is to develop medical diagnostic tests and that Metabo is a pharmaceutical company.
From at least in or about May 2016 up to and including in or about June 2017, MURACA solicited and received a total of more than approximately $1 million from investors by making false and misleading representations that the investors’ money would be used to expand the business of NanoMolecular and Metabo. MURACA then misappropriated hundreds of thousands of dollars of these investors’ funds and used the misappropriated money for personal expenses. For example, MURACA spent tens of thousands of dollars of investor funds on rent, utilities, and food distributor expenses related to the operation of a restaurant owned by his fiancée. In addition, MURACA wrote approximately $176,000 in checks to himself from the bank accounts associated with NanoMolecular and Metabo, and he used investor funds to make purchases of hundreds of dollars each at a cigar store, an online ticket retailer, and a tattoo and piercing establishment, among other businesses.
MURACA, of Pittsfield, Massachusetts, is charged in the Complaint with one count of wire fraud, which carries a maximum sentence of 20 years in prison. The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Kim praised the investigative work of the FBI in this case, and thanked the SEC, which has filed civil charges in a separate action.
The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorney David Abramowicz is in charge of the prosecution.
The charge contained in the Complaint is merely an accusation, and the defendant is presumed innocent unless and until proven guilty.