This week, the Securities and Exchange Commission filed charges to put a stop to fraud allegedly carried out by a Massachusetts businessman. That business man, Patrick Muraca, is accused of misusing investments that were originally intended for the development of cancer diagnostic tests. Muraca created two pharmaceutical companies, which went on to raise roughly $1.2 million.
Investors were led to believe that their investments would be utilized to aid the development of products capable of detecting cancer and other diseases. The SEC claims that the funds were funneled to restaurant businesses related to Muraca’s fiancée.
The SEC was able to trace the investors’ funds to Muraca’s personal bank account. They claim that a minimum of $400,000 was used to pay rent for the restaurants. Some of the money was allegedly used for payments to an automotive shop, casino and cigar shop. The SEC believes that investors were never made aware that their investments in MetaboRX LLC and NanoMolecularDX LLC would be used for alternative purposes.
Since April of 2016, the SEC believes that a minimum of 15 people made investments in the two companies. Despite claiming that the businesses were involved in researching diagnostic tests, Muraca classified the businesses as “Serving Food” and “Restaurant” in additional documents submitted to the Commonwealth of Massachusetts.
NanoMolecularDX claims to be involved in the development of diagnostic kits for early detection and monitoring of biomarkers. MetaboRX’s website claims that the company develops novel therapies for cancer and metabolic disease. On Monday, the SEC obtained a court order to freeze the assets of the companies as well as Muraca’s.
Simultaneously on Monday, the United States Attorney’s Office for the Southern District of New York filed criminal charges against Patrick Muraca.