William Taylor, Accounting Fraud, New York 2020

The former chief operating officer of a publicly traded biopharmaceutical company has been sentenced to one year in prison for orchestrating a multimillion-dollar scheme to fraudulently inflate revenue.

Audrey Strauss, the United States Attorney for the Southern District of New York, announced that William Taylor, the former COO of MiMedx Group, Inc., was sentenced today in Manhattan federal court to one year in prison for orchestrating a multimillion-dollar scheme to fraudulently inflate revenue.

Taylor and co-defendant Parker H. Petit were found guilty on November 19, 2020, following a four-week jury trial before U.S. District Court Judge Jed S. Rakoff, who imposed today’s sentence.

According to the allegations contained in the Indictment and the evidence presented at trial, Taylor and Petit used secret agreements and corrupt financial inducements to materially misstate quarterly and annual sales revenue of MiMedx.

The indictment alleges that MiMedx was headquartered in Marietta, Georgia, and its securities traded under the symbol ‘MDXG’ on the NASDAQ.

The scheme involved the following central features: in the second quarter of 2015, Taylor and Petit caused MiMedx fraudulently to recognize $1.4 million in revenue by making a $200,000 sham ‘consulting’ payment to CPM’s owner to bribe CPM to buy MiMedx product and secretly agreeing to send CPM approximately $1.1 million of product it did not want and did not intend to sell.

Manhattan U.S. Attorney Strauss said, ‘William Taylor and his co-defendant used secret agreements and corrupt financial inducements to materially misstate quarterly and annual sales revenue of MiMedx. They deceived the SEC, auditors, and the investing public. Now Taylor, like Parker Petit yesterday, has been sentenced to prison for his crimes.’

The case is being prosecuted by the Office of the United States Attorney for the Southern District of New York.

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