Former Chief Operating Officer of Philadelphia Technology Start-Up Charged with Securities Fraud and Embezzlement
CAMDEN, N.J. – An Atlantic County, New Jersey, man has been charged with orchestrating a long-running securities offering fraud while simultaneously embezzling hundreds of thousands of dollars from his employer’s bank account, Acting U.S. Attorney Rachael A. Honig announced.
Joseph Geromini, 54, of Linwood, New Jersey, is charged in an indictment unsealed today with 10 counts of wire fraud and two counts of securities fraud. He will have his initial appearance and arraignment by videoconference this afternoon before U.S. Magistrate Judge Sharon A. King.
According to the documents filed in this case:
Geromini was the chief operating officer (COO) for a technology startup headquartered in Philadelphia, Pennsylvania, which specialized in the development of point-of-care diagnostic testing of various diseases. Geromini controlled the company’s bank and debit card accounts, and was responsible for soliciting investments in the company through debt and equity fundraising.
From July 2018 through October 2018, the company raised approximately $2.25 million of investor funds. Geromini misrepresented to investors that he would invest their funds to pursue the company’s business plan, for example, by using the funds to further develop and commercialize its products and services, for lab expenses, and to pay employee salaries. Instead, Geromini diverted significant portions of their funds out of the company’s bank account for purposes inconsistent with its business operations, including to pay himself hundreds of thousands of dollars through unauthorized wire transfers, ATM cash withdrawals, and debit card transactions.
Geromini frequently misrepresented to the company that the unauthorized wire transfers were intended to compensate him for his employment. Geromini told the company’s chief executive officer that Geromini 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 wire fraud counts each carry a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense. The securities fraud counts each carry a maximum potential penalty of 20 years in prison and a $5 million fine.
The U.S. Securities and Exchange Commission has filed a civil complaint against Geromini based on the allegations underlying the securities fraud charges.
Acting U.S. Attorney Honig credited special agents of the FBI Atlantic City Resident Agency, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to the indictment.
The government is represented by Assistant U.S. Attorney Eric A. Boden of the U.S. Attorney’s Trenton Office.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.