Muraca sentenced to 27 months

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NEW YORK — A federal judge this week sentenced former Berkshire entrepreneur Patrick Muraca, who was convicted this summer of defrauding investors, to more than two years in prison.

In August, a federal jury found Muraca, who owned several biotechnology firms, guilty of wire fraud and lying to federal investigators.

During a sentencing hearing Thursday at Thurgood Marshall Courthouse in Manhattan, prosecutors requested that Muraca serve 57 to 71 months in prison.

Judge Ronnie Abrams, however, sentenced him to 27 months on each charge, which he will serve concurrently starting in April.

"In light of the egregiousness of Muraca's fraud targeting investors who believed their funds would help fight cancer and other diseases, Muraca's ceaseless efforts to obstruct justice through false testimony and fabricated evidence both before and after his arrest and indictment, and Muraca's utter failure to express remorse or take responsibility for his extensive misconduct, the government respectfully submits that a sentence within that range would be sufficient, but not greater than necessary, to serve the legitimate purposes of sentencing," prosecutors wrote in a sentencing memo submitted to the judge.

During the trial last summer, prosecutors convinced the jury that Muraca had misused between $335,000 and $370,000 invested into two companies he founded — MetaboRX and NanoMolecularDX — in 2016.

The companies were established to develop cancer diagnostic exams and complete cancer research, but prosecutors presented evidence that Muraca had used money invested on personal expenses, like dinners out, mortgage payments and splurges at Coach, and to buy items for his fiancee and her two restaurants.

Muraca's fiancee, Darleen Zradi, submitted a memo to Abrams, expressing guilt that it was the failure of her restaurant, Sullivan Station, that may have prompted him to get in trouble with the law.

"When the restaurant began to fail, Pat saw how worried we were and came to our aid to help make ends meet," she wrote. "He tried to be our knight in shining armor and protect us as usual. I now feel extremely guilty that my failure put too much pressure on him to keep us afloat and this is why he got into trouble with his own books."

Zradi also requested that Muraca not face prison time, citing both of their health issues.

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"I now own a smaller restaurant that has been financially doing OK until the time of my diagnosis," she said. "This is been a real struggle since I've had to close at different hours and Pat has been able to fill in for me when I needed him the most as it related to recovery or doctors visits etc."

Prosecutors, however, said that it is common for the family of convicted defendants to struggle during their sentence, but it's not enough of a reason to keep Muraca from prison.

"Finally, the health challenges Muraca described in his sentencing submission... do not justify a variance below the Guidelines range," wrote Geoffrey Berman, United States Attorney for the Southern District of New York. "While Muraca's incarceration may impose some hardship on his relatives to ensure that his mother and fiancee have the care they require, such family hardship is common when a defendant with family is sentenced to prison."

While this was Muraca's first felony conviction, he has a history of deceptive conduct, according to Geoffrey Berman, United States Attorney for the Southern District of New York.

Muraca's tax records show him "claiming suspiciously high deductions in order to avoid paying taxes on his substantial income year after year," Berman wrote.

"Muraca also purchased a phony diploma more than a decade ago to trick investors and others about his scientific credentials," he wrote. "In the late 2000s, he founded Nuclea, which raised millions of dollars from investors over the years despite failing to develop any products of its own and earning scant revenue from sources other than investors. Nuclea went bankrupt in 2016, perhaps in part because Muraca spent considerable investor money not in the best interests of the company, but on unqualified friends and relatives."

In addition to family members and friends, investors also wrote on behalf of Muraca. Andrew Deck, interim CEO of NanoMolecularDX, wrote a letter condemning Muraca's actions, but saying that his intentions were not malicious.

"I am not here to defend Mr. Muraca from the mistakes he has made, but throughout this process the government has attempted to paint Mr. Muraca as nothing but a liar and a cheat. The media has picked up this narrative and run," he wrote. "Mr. Muraca is very aware of the deleterious effect his actions have had on the Company, but he has never lost sight of the investors and the patients that could be helped by NMDX's technology."

Deck said he is "personally insulted" by the narrative because he believes in the company's work. He said he is not advocating that Muraca go unpunished, but suggested that there be a sentence other than imprisonment. If he is sentenced to prison, it may be harder for Muraca to pay restitution to the victims, he wrote.

Abrams ordered Muraca to forfeit $1,165,280 in restitution. After his release from prison, he will serve three years probation, according to federal court documents.

Haven Orecchio-Egresitz can be reached at horecchio@berkshireeagle.com, @HavenEagle on Twitter and 413-770-6977.


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