Trial begins this month for Pittsfield businessman accused of bilking investors out of $400K

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PITTSFIELD — The trial of Berkshire businessman Patrick Muraca is scheduled to begin this month in a New York federal courtroom.

Muraca is accused of defrauding investors in a pair of biotech companies he founded by using about $400,000 of their seed money for personal expenses wholly unrelated to the running of those businesses; Muraca had told investors their money would be used for pharmaceutical development and commercialization, according to the complaint.

A message left for Muraca's attorney, Sarah M. Sacks, of New York City, was not immediately returned.

The alleged scheme began in spring 2016 and lasted until July 2017, according to court files.

Some investor money was deposited directly into Muraca's personal account, according to the complaint. In other cases, Muraca allegedly took investor money out of business accounts and transferred it into his personal account or paid personal expenses directly from those business accounts.

Personal expenses include payments to a casino and purchases at restaurants, grocery stores, a tattoo and piercing establishment and a cigar shop, according to court documents obtained by The Eagle.

Muraca also is charged with making "materially false, fictitious and fraudulent statements and representations ... during a meeting with a Special Agent from the FBI and representatives of the U.S. Attorney's Office," according to court records.

Prosecutors allege that Muraca lied when justifying some of those questionable expenses.

Muraca told investigators he spent company money at the tattoo and piercing shop to purchase a surgical steel tube, stated that cigars he purchased with company money were gifts for "a particular individual affiliated with an educational institution"; that a catered event paid for with company money was "a dual-purpose family function and business event"; and that one of the company's computer servers were stored in a train caboose, located on the property of the former Sullivan Station restaurant in Lee, which was operated by Muraca's fiancee.

Muraca allegedly used investor money to pay for expenses related to the operation of that restaurant, and he allegedly again used investor money to pay expenses for a second restaurant in Lenox, Leenies Paninis and More, including a $15,000 security deposit and $2,000 for the April 2017 rent.

On July 31, 2017, the Securities and Exchange Commission froze the assets of one of Muraca's companies, NanoMolecularDX. The following day, Muraca attempted to pay six employees from the company with checks drawn from the business account.

One employee tried to cash their check, but the bank was unable to process it, according to court files.

Another employee, who identified himself as NanoMolecular's chief information officer, said he'd been employed there for about a year, but hadn't been paid all the money he was owed during that time.

In 2006, Muraca announced he was bringing his biotechnology firm, Nuclea Biotechnologies, to Pittsfield and touted a doctorate in biostatistics from St. Regis University as part of his educational background.

St. Regis University was unmasked as a bogus "diploma mill" in 2005 by government authorities and, according to a 2008 Washington Post article, it was among a number of phony schools that sold $6 million worth of fake degrees to people in 130 countries between 1999 and 2005.

Muraca's prior attorney, Anthony Doyle, said in a statement at the time, "Mr. Muraca, in an effort to continue his training and education, engaged in a long-distance program offered by St. Regis University. He paid tuition and engaged in a dissertation offered by the organization. When he discovered that the university lacked the legitimacy to meet appropriate standards he removed the certification from his credentials."

Some of Muraca's other professional associations came into question following the filing of charges.

Muraca listed among his experience a role as the president of the board of directors of The Moments House, a Pittsfield support organization for people diagnosed with cancer and their families, from May 2012 to December 2014.

But his tenure in that role appears to have been exaggerated.

In response to queries, a Muraca representative provided The Eagle with a copy of a letter of resignation on Nuclea letterhead, dated February 2014, sent to Moments House director and co-founder Alice Trumbull.

She said she never received such a letter, and noted Muraca spoke at Moments House's annual Slice of Life fundraiser at the Crowne Plaza Hotel about two months later in his role as president of the board of directors.

Trumbull said that fundraiser was the only event in which Muraca participated, and he never attended regular meetings, which were among the reasons why the other board members voted him out of that position in mid-2014. She also said he joined the organization closer to December 2013, not May 2012.

Muraca's own LinkedIn profile contradicted the letter his representative provided, as it lists his tenure of service as the president of the board ending in December 2014.

Trumbull said Muraca also reneged on a promise to pay the first year's rent for the Moments House's Depot Street location, another reason he was voted out.

She said she did send a letter to Muraca in December 2013, thanking him for a $2,400 donation that covered the security deposit on the Depot Street building. She said Muraca paid monthly rent "a couple of times," intermittently.

She also said Muraca failed to follow through on promised support for kitchen renovations and insurance on that building. She said donations from community members made up for the shortfall.

"Thank God for our generous donors," she said.

On his LinkedIn profile, Muraca listed being a "member of the board," of Jenesis Biosciences from April 2014 to at least August 2017.

Jenesis was formed in 2013 by the Boston-based Joslin Diabetes Center in an effort to "accelerate the development of new ventures" in diabetes research and treatment, according to its website.

Sarah Darcy, a spokeswoman for the center, said Jenesis was dissolved in 2016 after it failed to generate the amount of hoped-for business. She said Muraca was a member of Jenesis in 2014, but the company had no board of directors and, while it did have an advisory board, Muraca was never a member of it.

In another letter provided to The Eagle by Muraca's representative, dated Sept. 20, 2016, Muraca was informed of Jenesis' dissolution and told he owed Joslin a balance of $178,071.37 for unspecified services rendered to Molecular Metabolism, a company Muraca said he co-founded and of which he was a board member.

When asked if that balance was paid, Darcy said she would not comment on that detail.

A representative for Muraca said the balance was not paid, and that it was eventually part of Nuclea's bankruptcy filing in October 2016.

The trial is scheduled to begin July 24 in New York City.

Bob Dunn can be reached at bdunn@berkshireeagle.com, at @BobDunn413 on Twitter and 413-496-6249.


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