Former Northern California biotech executive sentenced to federal prison in fraud case
A former Davis biotech company executive was sentenced this week to two years in federal prison for a fraud scheme to artificially inflate the company’s reported revenues by millions of dollars, prosecutors said.
On Oct. 17, 2019, Hector Absi, the former chief operating officer of Marrone Bio Innovations Inc., pleaded guilty to conspiracy to commit mail fraud, wire fraud, and securities fraud in the scheme.
Absi, 51, of Las Vegas was sentenced in federal court Monday, the U.S. Attorney’s Office in Sacramento announced in a news release. A restitution hearing for Absi is scheduled for June 13.
Marrone Bio, a maker of environmentally friendly pesticides and other farm products, had been at the forefront of the Sacramento tech scene and raised millions of dollars in a public stock offering.
Prosecutors said Absi was Marrone’s COO from January through August 2014, and also served as the head of the company’s sales department.
In 2014, the company announced it had launched an internal probe after uncovering documents that could undermine some of its financial results from the previous year. The company’s stock price sank, which indirectly led to significant layoffs. Investors sued, and the company eventually reported its revenues for an 18-month period had been over-reported by $6.7 million.
In February 2016, prosecutors announced a federal grand jury had indicted Absi. He was arrested at his Las Vegas home.
Between March 2013 and July 2014, Absi conspired with at least one other Marrone employee to misrepresent to the accounting department, its external auditors and the investing public that the company doubled its revenue in 2013 in comparison to 2012, according to the U.S. Attorney’s Office.
Prosecutors said Absi received a performance-based bonus and exercised stock options when Marrone’s inflated revenue figures were being reported.
This story was originally published April 11, 2022 at 5:03 PM.
