By Eli Segall, Reporter - Silicon Valley / San Jose Business Journal
Government regulators on Thursday filed fraud charges against two former sales executives at Mountain View medical equipment company Hansen Medical Inc.
Christopher Sells, former vice president of commercial operations at Hansen, and Timothy Murawski, a former vice president of sales, allegedly participated in “multiple improper sales transactions” to inflate the company’s reported revenues, said the U.S. Securities and Exchange Commission.
According to the SEC, the two men engaged in the scheme in 2008 and 2009 as Hansen (NASDAQ:HNSN) “underwent efforts to raise additional capital from investors.”
The agency’s complaint said that Sells, a Dallas resident, and Murawski, who lives in Lake Zurich, Ill., “schemed” to have Hansen personnel temporarily install the company’s robotic catheter system at a customer site before the customer was ready for it, so that Hansen could record the sale.
According to the SEC, Hansen personnel would then “immediately dismantle the equipment and put it in storage until months later, when they would return to reinstall the equipment.”
The SEC also alleged that, in a sales transaction in late December 2008, Sells and Murawski told Hansen personnel “to forge a customer signature on certain required documents to allow the company to record the revenue that quarter.”
According to the SEC, Sells and Murawski’s schemes were intended “to fool Hansen Medical’s finance personnel and auditors” into believing the sales were completed, and revenue could be recorded.
Peter Mariani, the chief financial officer of Hansen, did not immediately return a call seeking comment on the charges.
The SEC also said Thursday that, in a separate proceeding, the agency settled charges against Hansen for providing misleading financial information to public investors.
Hansen announced Thursday that its settlement with SEC “fully resolves” the agency’s investigation of issues related to the restatement of financial statements that were first reported in October 2009.
In agreeing to the settlement, Hansen neither admitted nor denied the SEC’s findings.