San Francisco, California - Lawrence J. Gerrans, former chief executive officer of a San Rafael-based medical device company, was sentenced to 135 months in prison for wire fraud, money laundering, and related charges announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge Craig D. Fair. The sentence was handed down by the Honorable Edward M. Chen, U.S. District Judge.
The sentence follows a guilty verdict after a two-week trial in January 2020. Evidence at trial showed that Gerrans, 50, of San Anselmo, Calif., was the president and chief executive officer of San Rafael-based medical device company Sanovas. From January 12, 2015, through March 16, 2015, Gerrans employed a number of fraudulent methods to siphon funds out of Sanovas. For example, Gerrans systematically transferred more than $2.6 million from Sanovas to himself and two shell companies he controlled, Halo Management Group and Hartford Legend Capital Enterprises, and then used the money to make an all-cash purchase of a luxury home in San Anselmo. The home was purchased for more than $2.5, at least $2.3 million of which was laundered through Hartford Legend before being paid to the escrow account for the purchase.
Evidence at trial also showed that Gerrans made false statements to a newly-created board of directors to seek their approval for a lucrative compensation plan and for reimbursement of retirement account funds that Gerrans had liquidated in 2013 and 2014. Evidence at trial showed that Gerrans had used the retirement account funds for personal expenditures, including a Maserati, a diamond ring, and rent on his personal residence, but he told the board of directors he had used the retirement account funds to benefit Sanovas. In another part of the scheme to defraud, evidence also showed that in 2017 Gerrans used a Sanovas corporate credit card for lavish personal expenditures, including a $44,000 vacation timeshare, $12,500 for high-end carpets for his home, and $32,000 to pay the property taxes on his personal residence.
Evidence at trial further showed that Gerrans provided false documents to the FBI during the criminal investigation, and that after he was first charged in the case he violated a court-ordered bond condition, attempted to tamper with a witness, and obstructed justice.
A federal grand jury indicted Gerrans on August 27, 2019, by a second superseding indictment, charging him with five counts of wire fraud, in violation of 18 U.S.C. § 1343; one count of engaging in monetary transactions in criminally derived property, in violation of 18 U.S.C. § 1957; three counts of making false statements to a government agency, in violation of 18 U.S.C. § 1001(3); one count of contempt of court, in violation of 18 U.S.C. § 401(3); one count of witness tampering, in violation of 18 U.S.C. § 1512(b)(1); and one count of obstruction of justice, in violation of 18 U.S.C. § 1503. The jury convicted Gerrans on all counts.
In addition to the prison term, Judge Chen also ordered Gerrans to serve a three-year term of supervised release to begin after the prison term.
Assistant U.S. Attorneys Robin Harris and Lloyd Farnham are prosecuting the case with the assistance of Patricia Mahoney and Kimberly Richardson. The prosecution is the result of an investigation by the Federal Bureau of Investigation.
