Patrick Muraca from Massachusetts raised as least $1,175,000 (£893,440, €998,300) from 15 people for investment in two pharmaceutical development companies; Nano and Metabo.
He is listed as president and chief executive of both firms and as recently as 30 June he received $80,000 from an investor in Nano.
Investors were told that their funds would be used to manufacture and commercialise cancer diagnostic tests and other bio-pharmaceutical innovations, to buy assets related to the products and develop clinical trials.
They received investment confirmations that listed the number of shares each investor was entitles to as a result of their investment.
Food and mortgage payments
In reality, Muraca used the money for his own benefit, and even deposited some investor funds into his personal bank account.
Other funds were paid into accounts in the names of the two companies and either transferred into Muraca’s bank accounts or he paid personal expenses from the business accounts.
From April 2016 to present, Muraca spent at least $400,000 of investor money.
The money was used for a variety of purposes, including food shopping, restaurants, mortgage payments for himself and others, entertainment and to subsidise his fiancée’s restaurant.
Investor protection
The SEC has requested a temporary restraining order be made against Muraca plus an emergency asset freeze.
“As alleged in our complaint, we’re intervening to protect investors because Muraca has veered from his stated intentions and has been using their money for purposes other than the fight against cancer and other diseases,” said Paul Levenson, director of the SEC’s Boston Regional Office.
In a parallel action, the US Attorney’s Office for the southern district of New York has announced criminal charges against Muraca.
