Baird’s Billion-Dollar Bite: Former CEO Pleads Guilty to $10.75M Wire Fraud Scheme
Seattle – In a shocking turn of events, former CEO Stephen Baird, 68, of Bainbridge Island, Washington, pleaded guilty today in U.S. District Court in Seattle to wire fraud, a federal crime that has left investors reeling. Baird’s scheme, which began in 2012, defrauded some 200 investors out of a staggering $10.75 million.
According to charging documents, Baird claimed that his company, S-Ray Inc., had developed an innovative ultrasound device that could take the place of X-rays, allowing dentists to quickly and safely image patients’ mouths. However, in a brazen move, Baird falsely told investors that the Food and Drug Administration (FDA) had granted S-Ray “market clearance” to sell the device when, in fact, S-Ray never obtained FDA authorization to sell any device.
At a court hearing today, Baird admitted to engaging in a scheme to defraud S-Ray’s investors in connection with his promotion and sale of S-Ray stock. The Court will determine at a future hearing the amount of loss investors sustained and other facts relating to Baird’s fraudulent scheme.
Under the plea agreement, Baird agreed to pay restitution to investors and to forfeit property in amounts to be determined by the Court. The government agreed to recommend no more than seven years in prison. The Securities and Exchange Commission (SEC) filed a civil securities fraud action against Baird and S-Ray in March 2022, and on January 6, 2023, the Honorable John H. Chun issued an order that imposed civil penalties against Baird and S-Ray, held them liable for disgorgement of investment funds, and enjoined Baird from serving as an officer or director of certain companies and from participating in certain types of securities transactions.
The case is being investigated by the FBI, and Assistant United States Attorney Seth Wilkinson and Special Assistant United States Attorney Jessica M. Ly are prosecuting the case. The investigation revealed that Baird used at least 62% of the money – some $6.7 million – for his and his family’s personal expenses, including to purchase a luxury car and a house on Bainbridge Island.
Baird’s scheme has left a trail of devastation in its wake, with investors who were promised a safe and lucrative investment now facing financial ruin. The case serves as a stark reminder of the importance of due diligence and caution when investing in companies, especially those with unproven products and untested claims.
The sentencing of Baird is scheduled for August 2, 2024, before U.S. District Judge Richard A. Jones. The outcome of this case will be closely watched, as it will serve as a gauge of the severity of the punishment for those who engage in such egregious and deceitful behavior.
Related Federal Cases
- McClure and Chambers Sentenced for $1.5M Contractor Fraud Scheme · Washington
- Maxime Maiga Sentenced for $400,000 Wire Fraud · Maryland
- Bolden Pleads Guilty to $30M Computer Fraud Scheme · Washington
- Emiel Kandi Pleads Guilty in $800K Mortgage Fraud Scheme · Washington
- Mark Spangler Sentenced to 16 Years for Wire Fraud and Investment Advisor Fraud · Washington
Key Facts
- State: Washington
- Agency: DOJ USAO
- Category: White Collar Crime|Fraud & Financial Crimes
- Source: Official Source ↗
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