NJ Biotech Boss Ordered to Pay Millions
The former President and CEO of two New Jersey biotech companies has been ordered to pay back millions of dollars for allegedly defrauding investors by spending their money on luxury travel getaways.
Thomas Fagan and the Bergen County biotech companies he headed up must pay $10.2 million in investor restitution and $1 million in civil penalties, under a settlement with the New Jersey Office of the Attorney General and the State Division of Consumer Affairs’ Bureau of Securities.
“The State is bringing every available enforcement tool to bear on this defendant, who illegally raised millions of dollars by selling unregistered stock to hundreds of investors – and allegedly defrauded those investors by spending the money on vacations and other personal expenses,” says State Attorney General Jeff Chiesa.
He points out today’s settlement represents the culmination of civil action, while criminal actions remain pending.
Fagan is the former President/CEO of Energex Systems, Inc. and Arbios Systems, Inc., and the managing member of Arbios Acquisition Partners, LLC, all based in Allendale, New Jersey.
Energex purportedly developed medical devices including a “hemo-modulator,” which according to the company’s claims would use ultraviolet light to fight blood-borne diseases such as HIV/AIDS.
According to law enforcement officials, Fagan violated the Uniform Securities Law by selling Energex stock, ASI stock, and ASI promissory notes to more than 700 investors – all while Fagan was not registered as an agent with the Bureau of Securities, and he allegedly defrauded investors by misusing investor funds for personal expenses such as overseas travel and stays in Las Vegas and Atlantic City casinos.