Philly tech executive allegedly stole money from company in fraud scheme

The chief operating officer of a Philadelphia-based technology startup orchestrated a long-running securities-offering fraud while simultaneously embezzling hundreds of thousands of dollars from the firm, according to federal prosecutors in New Jersey.

Joseph Geromini, 54, of Linwood, faces 10 counts of wire fraud and two counts of securities fraud in an indictment unsealed Wednesday. He was due to make his initial court appearance by video conference later in the day, and it wasn’t immediately clear if he had a lawyer.

The tech startup specialized in the development of point-of-care diagnostic testing of various diseases, prosecutors said, and Geromini controlled its bank and debit card accounts. He also was responsible for soliciting investments in the company through debt and equity fund-raising.

From July through October 2018, the company raised about $2.25 million from investors. Geromini misrepresented to investors that he would use the money to pursue the company’s business plan but instead diverted significant portions of the funds to pay himself hundreds of thousands of dollars, prosecutors said.

Geromini frequently misrepresented to the company that the unauthorized wire transfers were intended to compensate him for his employment, prosecutors said. Geromini told the company’s CEO that he had twice secured contracts on behalf of the company with third parties and was, pursuant to his employment agreement, entitled to separate bonus payments.

The U.S. Securities and Exchange Commission has filed a civil complaint against Geromini based on the allegations underlying the securities fraud charges, prosecutors said.