Dis­graced VC Steven Bur­rill heads to prison with 30-month sen­tence for fraud, tax eva­sion

An in­dict­ment on 34 counts of wire fraud, in­vest­ment ad­vis­er fraud, and tax eva­sion has fi­nal­ly led to prison time for ven­ture cap­i­tal­ist Steven Bur­rill.

Known in bio­phar­ma cir­cles for brash talk and a lav­ish lifestyle — sup­port­ed in part by mil­lions loot­ed from his own biotech fund — Bur­rill was first in­dict­ed last Sep­tem­ber by a fed­er­al grand ju­ry and faced a to­tal of 30 years in prison along­side mil­lions in fines.

But af­ter sign­ing a sealed plea agree­ment, Bur­rill will on­ly serve 2.5 years for the first two counts and pay $200 in a “spe­cial as­sess­ment.” A resti­tu­tion hear­ing next month will de­ter­mine whether Bur­rill must pay back $5.6 mil­lion to the fund he dipped in­to plus an ad­di­tion­al $2.9 mil­lion to the IRS for tax loss­es.

Ac­cord­ing to the De­part­ment of Jus­tice, Bur­rill con­vinced lim­it­ed part­ners to con­tribute cap­i­tal to the $283 mil­lion Bur­rill Life Sci­ences Cap­i­tal Fund III with “false and mis­lead­ing let­ters,” trans­ferred mil­lions in fees man­age­ment to en­ti­ties un­der his con­trol, and failed to re­port the in­come he fun­neled in­to his per­son­al ac­counts.

An ear­li­er SEC lit­i­ga­tion — which Bur­rill set­tled — put some ag­gre­gate num­bers on the case, dat­ing back to 2007. Over the next sev­en years, trans­fers from Fund III be­came rou­tine. About $4.6 mil­lion was used to cov­er per­son­al costs.

In spring of 2015, Bur­rill set­tled his dis­pute with the SEC, hand­ing over $6 mil­lion to cov­er what he had lift­ed out of the fund for ex­pens­es that in­clud­ed fam­i­ly va­ca­tions to St. Barts and Paris as well as jew­el­ry from Tiffany’s, gifts, car ser­vice, and pri­vate jets. The gifts went to both his girl­friend as well as his wife.

Bur­rill’s prob­lems turned crit­i­cal af­ter he had a falling out in 2014 with some of his staffers. Af­ter he fired them, they alert­ed in­vestors, who quick­ly seized con­trol of the fund and start­ed the chain of events.

Hav­ing backed biotech stal­warts like Phar­mas­set and Gala­pa­gos, cou­pled with me­dia cov­er­age from ti­tles like Sci­en­tif­ic Amer­i­can ex­tolling him as a vi­sion­ary, Bur­rill was once one of bio­phar­ma’s most vis­i­ble ven­ture cap­i­tal­ists.

He is now sched­uled to re­port to prison on March 4, 2019.


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

John Hood [file photo]

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On June 18, 2019, we initiated a confidential arbitration proceeding against Dr. Asa Abeliovich, our former consulting co-founder, related to alleged breaches of his consulting agreement and the improper use of our confidential information that he learned during the course of rendering services to us as our consulting Chief Scientific Officer/Chief Innovation Officer. We are in the early stage of this arbitration proceeding and are unable to assess or provide any assurances regarding its possible outcome.

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CEO Pascal Soriot via Getty Images

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