Inner City Press

In Other Media-eg New Statesman, AJE, FP, Georgia, NYTAzerbaijan, CSM Click here to contact us     .

These reports are usually available through Google News and on Lexis-Nexis

Share |   

Follow on TWITTER

Home -

These reports are usually available through Google News and on Lexis-Nexis


(FP Twitterati 100, 2013)

ICP on YouTube

More: InnerCityPro
Sept 24, 2013

UN: Sri Lanka


FOIA Finds  

Google, Asked at UN About Censorship, Moved to Censor the Questioner, Sources Say, Blaming UN - Update - Editorial

Support this work by buying this book

Click on cover for secure site orders

also includes "Toxic Credit in the Global Inner City"




Bank Beat

Freedom of Information

How to Contact Us

MiMedx Fraud Convict Petit Gets 1 Year in BOP KY Camp For Bladder Cancer Trashing Shorts

By Matthew Russell Lee, Patreon
BBC - Guardian UK - Honduras - ESPN

SDNY COURTHOUSE, Feb 23 –Parker "Pete" Petit and William Taylor were charged with conspiracy and securities fraud with respect to MiMedx. 

On October 5 U.S. District Court for the Southern District of New York Judge Jed S. Rakoff held a pre-trial proceeding. Inner City Press covered it, below.

 On November 19, on the fourth day of jury deliberations the MiMedx jury came back with guilty verdicts, and not guilty verdicts, for both Petit and Taylor.

 On February 23, seeking a sentence of no jail time, Petit appeared virtually before Judge Rakoff (and got one year). Inner City Press live tweeted it, here:

Judge Rakoff: The guideline sentence here would be 30 to life, based on loss level. That is absurd. So too is the defense's calculation. Having of course nothing better to do, I was happy to spend hour after hour reading the submissions. So I am ready.

Judge Rakoff: Let's turn to 3553(a), how the defendant should be sentenced. I received many fine letters, from family and friends, and from victims too. Eric Bruce, for Petit: We know you look at the individual. how he's lived his life, and his current health.

Bruce for Petit: My client has bladder cancer. He's getting immuno-therapy, it's painful. He needs to use the bathroom urgently. Incarceration VOICE:... Does not walk about of prison Judge Rakoff: If you do not mute yourself, I'll adjourn until midnight.

 Bruce for Petit: Any incarceration could have dire consequences for Mr. Petit. The appropriate sentence for him will be different than for others. 

VOICE: I'm behind you.

Judge Rakoff: Who is speaking? VOICE: I'm behind you.

Judge Rakoff: ID yourself.

VOICE: The judge is getting very pissed off now.

Judge Rakoff: You're too cowardly to give your name. Why don't you go on mute? There we go. Bruce for Petit: Jury acquired Mr. Petit of the conspiracy. Fraud encompasses Ponzi schemes- this was not a crime of greed.

 Bruce for Petit: His philanthropy speaks to his integrity. He also gave quietly. He gave money to Georgia Tech for the Parker Petit Institute.

 Bruce for Petit: He funded science and technology at Georgia State. He honored his military service and hired veterans. He counseled them. He developed products critically helpful to veterans.

Judge Rakoff: A lot this has been covered in your papers. I'm mindful of Mr. Petit's condition. So we should expedite.

Bruce for Petit: OK, let's talk about general deterrence. His reputation has been destroyed. The company he saved fired him and clawed back $14 million

 Bruce for Petit: Tell others considering white collar crime, you'll get bladder cancer and be branded as a felon. I submit to you, that is deterrence enough except to the most hardened criminal. Incarceration is not necessary.AUSA: A serious term of incarceration is necessary. Here, the abuse of trust is a flagrant one. This was a crime that involved real harm to investors and to the company itself.

 Pete Petit himself: I want to thank your Honor for reading all the letter sent in on my behalf. I have always managed to persevere. I accept my responsibilities as CEO, it is a complex job. I signed the companies financial statement. But I had no idea of fraud

 Pete Petit: I'm disappointed with the jury's verdict. But I accept it. The shorts' campaign against MiMedx, we fought it with truth. A short seller sent a letter and then E&Y would not sign off on our 2017 financials. The short seller made $100s of millions

 Pete Petit: The illegal short sellers, judge, you're received letters from them as well. Now (sigh) consider my health. Because of bladder cancer I am concerned that prison would be a death sentence. I have a background in health care so I do know a bit about it

 Pete Petit: I believe I can help society by consulting charities. I have a proven track record. I can help them get to the next level. One deals with teenage suicide. Another, spinal injuries. I have contacts who listen to me. I implore you to consider this.

Pete Petit: I was a hands-on executive. I can be a spokesman for the punishment that you will administer today. Judge Rakoff: I do think prison time sends a message that cannot be sent by another other sentence. But it does not require years and years.

 Judge Rakoff: Mr. Petit still denies his guilt. In a way it's refreshing; I often see crocodile tears, when I'm sorry means I'm sorry I got caught. Here, I think the jury's verdict was well warranted. He willfully committed securities fraud.

 Judge Rakoff: Still, at his age and health, I don't think specific deterrence is much of an issue here. The issue that most favors Mr. Petit is his age, his health and the many good things he's done, which are important to the Court. They should count today.

 Judge Rakoff: I am not concerned, however, that his health is such that the BOP cannot handle it. Doctor Sommer says BOP has several prison hospitals that deal with serious cancer. So I come to the conclusion that he should be sentenced to 1 year in prison.

Judge Rakoff: With respect to restitution, today counsel for MiMedx called my law clerk and said they are seeking restitution. I don't have to decide that for 90 days. When counsel are ready, call and arrange briefing and we'll take it up.

Judge Rakoff: In terms of surrender, I'll put it off to September 18 at 2 pm, to a prison hospital.  Bruce for Petit: How about a year and a day, for good time credit?

Judge Rakoff: No. I thought this through. He should really serve a full year.

Bruce for Petit: We request the minimum security camp at Lexington, Kentucky. Or Butner [NC] second. Judge Rakoff: Fine. Bruce for Petit: We may ask for further delay for appeal. Judge Rakoff: Call chambers and we could set up an argument.

Clerk: That's a Saturday. 

Judge Rakoff: Let's make it Sept 21 at 2 pm. Let me just say, the guidelines focus too much on the loss amount. A court should use its common sense: it's not 30 or zero.

Here's how the US Attorney's Office, past 2 pm back on November 19, put it: "PARKER H. “PETE” PETIT, the former chief executive officer of MiMedx Group, Inc. (“MiMedx”), a publicly traded biopharmaceutical company, was convicted of securities fraud, and WILLIAM TAYLOR, the former chief operating officer of MiMedx, was convicted of conspiracy to commit securities fraud, to make false statements in SEC filings, and to mislead the conduct of audits."

On October 26, the trial began, and Inner City Press live tweeted it. Now here and below.

 On November 16, the US Attorney's Office wrapped up their rebuttal and Judge Rakoff stepped into the witness box to give instructions:

Judge Rakoff just said he'll deliver his instructions from(plexiglass) witness box, so he can take off his mask. A juror is late...

OK - juror has arrived and MiMedx trial final argument by US Attorney's Office has begun: "They lied under oath... Why did they corrupt their positions? Out of greed, for the money. Pete Petit had $38 million in MiMedx stock.

AUSA: "Return versus repurchase, it's all nonsense. Bill Taylor admits this is the right of return email. He used the word repurchase, it's just proof of his guilty conscience. Don't be fooled."

Then after one admonition to wrap it up, the jury instructions began. Watch this site.

  On November 10, an Atlanta-based auditor of MiMedx, then and now working for Cherry Bekaert, under government questions said that a $200,000 payment to Mark Brooks, characterized as a bribe, should have been discounted from the reported earnings, according to GAAP.

 But on November 11 under cross examination, the auditor admitted that John Cranston was his main contact at MiMedx, and was shown that Cranston was on the e-mail chain about the payment to Mark Brooks. So shouldn't Cranston have told the auditor?

  Inner City Press live tweeted the afternoon session on November 11, here:

Gov witness, seemingly the last, is SEC Financial Economist Carina Shambarry. There was another sidebar with Judge Rakoff before she started. AUSA: Did you review MiMedx? A: Yes. AUSA: Who asked you?

A: The US Attorney's Office... I looked at 2015 purchase orders

Shambarry: This is the inflated revenue of MiMedx for the 4th quarter of 2015... inflated by $2,990,675... that is, by 6.12%. They still missed guidance by about $600,000.

Now comes cross examination of Carina Shambarry. Q: So this stock sale by Mr Taylor was before any allegation of wrongdoing, right?

AUSA: Objection! Judge Rakoff: Lay a foundation.

Q: Were you given any info about purchase orders before the end of June 2015? A: No Now counsel says they're about to move on to another topic, suggests breaking for the day. 

Judge Rakoff: I'm disappointed, but I'll bear up. Come to the sidebar. After a time, to jury: The gov will wrap up tomorrow. The defense will put on a couple of witnesses. 

Judge Rakoff: We'll have the government's closing tomorrow afternoon, defense's on Friday. You can start deliberating sometime on Monday. We need to keep the pressure on. See you tomorrow at 9:45. [Jury leaves] Judge Rakoff, to lawyer: Let's make some motions.

Defense: We do have motions to make. Can we take a five minute break? Judge Rakoff: Sure. We'll deem that these motions are being made at the end of the government's case. Thread will continue.

Defense returns with a Second Circuit citation, 971 F.3d 380, about when making further objections would be unavailing - asks Judge Rakoff if that's the case here. It seems so. Talk turns to how the jury should be told about the power to grant immunity.

AUSA arguing that the evidence supports an instruction on conscious avoidance...

Judge Rakoff: Some judges don't like counsel to quote principles of law in summation. I am not one of those. Just make sure you quote my instructions, and not something you make up.

Judge Rakoff: You can says, the Government didn't meet its burden because no evidence of X or Y. What you cannot say is, They didn't call Mr. Jones as a witness... It's been a long day, and I still have to teach at Columbia."

  On the morning of November 12, the defense got Ms. Shambarry to admit she had not reviewed how bonuses were paid to Petit and Taylor in 2013 and 2015 - that is, whether they would have gotten the same bonus whether or not they early-recognized revenue. The cross examinations were punctuated by objections, many of them sustained. But still the point was made. Next up: closing arguments.

  Watch this site.

 On November 9, after the AUSA said now the government might close its case on November 11, Veterans Day, Judge Rakoff said he had noticed - and that he had notice that the jurors did not appear bored by focused. He congratulated both sides' lawyers and told them to keep it up. So will we as the trial winds down.

  On the morning of November 6, Bill Taylor's lawyer cross examined a government witness about why he had not complained internally if he thought the deal with Mark Brooks' company was wrong. It all got reported to Pete [Petit], he answered, adding that MiMedx General Counsel Lexi Hayden did whatever Petit said.

 The government on re-direct tried to rehabilitate him, that he had been afraid of Petit's retaliation and had a family to support. But what about Taylor?

 On the afternoon of November 6, talk turned to an informal application for a loan from Capital One by Jerry Morrison, whose business was said to be the sale of human tissue (for medical purposes). After a cooperator, or witness with a Non Prosecution Agreement, the AUSA said the government may rest its case by the end of next week. Judge Rakoff said he'll draft jury instructions and that the charging conference shouldn't take more than 72 hours, "bring your sleeping bag." We'll continue on this.

  On the morning of November 5, cross examination of a government witness who worked for previous witness Carlton continued, focusing on his role as an "advocate" for Mark Brooks, and his characterization of the $200,000 payment to Brooks as being a bribe.

There were diversions into a text message about pizza -- "I like pizza too much, that's my problem," the witness said, perhaps ingratiating him to the jury. Judge Rakoff told the jurors to take 11 am to 12:05 pm  for lunch, as he gave a Zoom speech to NYU; he told the lawyers to return at 12:01.

Day 5, Oct 30: Witness: Brooks had a lot of complaints, so I don't remember what was per se settled... We got the order afterwards. Defense: Call up Gov Exh 1018. Take a look at this. This is an email from Mr Petit to Mark Brooks, right? Witness: Right.

We're back. Carlton still on the stand. Q: You see Mr. Carlton this email says Mr Brooks had to forego the stock, for the $200,000? Carlton: Yes. Q: And Mr. Petit was on the email, as you were, and said - Judge Rakoff (to jurors) This is for state of mind 

Q: You wrote that the $200,000 to Mr. Brooks was for lost business? Carlton: Not the case. It was for the stock. 

Q: So you sent Bill [Taylor]'s email to Bassam? Carlton: Yeah because he missed the first one.

Q: But Mr Taylor's email said repurchase the product. It does not say returned.

 AUSA: Objection! Asked and answered!

Judge Rakoff: I'll let it go for now... Have a good weekend.

 [On the morning of October 30, Inner City Press formally asked for access to the government exhibits in this US v. Petit case. Watch this site.]

Day 4

The case is US v. Petit et al., 19-cr-850 (Rakoff)


Your support means a lot. As little as $5 a month helps keep us going and grants you access to exclusive bonus material on our Patreon page. Click here to become a patron.

Feedback: Editorial [at]
SDNY Press Room 480, front cubicle
500 Pearl Street, NY NY 10007 USA

Mail: Box 20047, Dag Hammarskjold Station NY NY 10017

Reporter's mobile (and weekends): 718-716-3540

Other, earlier Inner City Press are listed here, and some are available in the ProQuest service, and now on Lexis-Nexis.

 Copyright 2006-2021 Inner City Press, Inc. To request reprint or other permission, e-contact Editorial [at]