The former CEO and CFO of Endocare, an Irvine, CA, company specialized in cryoablation technology, were indicted yesterday in connection with fradulent claims made between 2001 and 2003. Ex-CEO Paul Mikus and ex-CFO John Cracchiolo, after being charged with 27 counts, were indicted on allegations of securities fraud, false statements to regulators, and wire fraud.
The Associate Press reports, “In connection with a 2001 stock offering, the two falsely told investors that the company’s largest distributor was immediately reselling Cryocare Boxes for use in medical procedures. In fact, the devices languished unused and unopened in the distributor’s warehouse, prosecutors said. In other cases, the men claimed to investors, accountants and regulators that some of its Florida customers were obligated to pay for the devices when, in fact, they were not.”
Endocare’s new CEO, Craig Davenport, joined the company in December 2003 from a healthcare investment company called The D.W. Group. Davenport made Michael Rodriguez, a former consultant to the company, Endocare’s new CFO in August 2004. Watch Davenport’s discussion of Endocare’s current strategy.