Not only did Steven Burrill loot millions from his biotech fund to support a lavish lifestyle and find ways to pamper his wife and girlfriend, he also allegedly failed to pay taxes on the money he admitted taking. And now Burrill, once one of the most prominent venture capitalists in the industry, faces multiple counts of fraud and up to 30 years in prison if convicted.
Earlier this week the US Department of Justice spread the word that Burrill had been indicted by a federal grand jury in San Francisco on some 34 counts that he committed wire fraud, investment adviser fraud, and tax evasion in taking cash out of his biotech fund.
Marc Howard Berger was charged with helping him prepare those allegedly fraudulent tax returns.
According to the DoJ:
Burrill induced “limited partners to contribute capital to the Fund with false and misleading letters. In addition, the indictment alleges Burrill caused the Fund to transfer millions of dollars in management fees to companies he controlled; the money was in excess of the management fees that were due and allowable under the agreements that governed the Fund. Further, the indictment alleges Burrill filed false and fraudulent U.S. Individual Income Tax Return, Forms 1040, which understated his income by excluding money Burrill transferred out of the Fund and into accounts he controlled.”
Add it all up, and that comes to up to 20 years in prison to cover the wire fraud charges, 5 years for investment adviser fraud and 5 more years for tax evasion, along with millions of dollars in potential fines.
According to the SEC’s litigation, Burrill’s money problems started in 2007, when he first dipped into the $283 million Fund III to cover expenses at his management company. Over the next 7 years, such transfers became routine, including tapping the fund to top up his personal bank account. About $4.6 million was allegedly used to cover personal costs, including jewelry from Tiffany’s.
Burrill’s problems turned critical after he had a falling out with some of his staffers. After he fired them, they alerted investors, who quickly seized control of the fund and started a chain of events that has yet to fully play out.
Image: Steven Burrill, fifteen years ago, posing at a forum “Nobel Prizes and Biotechnology Gurus celebrate DNA Discovery’s 50th Anniversary” in Lyon, France Getty
The best place to read Endpoints News? In your inbox.
Comprehensive daily news report for those who discover, develop, and market drugs. Join 50,800+ biopharma pros who read Endpoints News by email every day.Free Subscription