The United States Attorney for the Southern District of New York has announced that Parker H. Petit, former CEO of MiMedx Group, has been sentenced to one year in prison for fraudulently inflating the company’s revenue.
In addition to his prison term, Petit was also ordered to pay a fine of $1m.
Petit and co-defendant William Taylor were found guilty on November 19, 2020, following a four-week jury trial before U.S. District Court Judge Jed S. Rakoff, who imposed the sentence.
Taylor was found guilty of conspiracy to commit securities fraud, to make false statements in filings with the SEC, and to mislead auditors.
One of the most “critical financial metrics” disclosed in MiMedx’s public filings with the Securities and Exchange Commission and touted in MiMedx’s accompanying press releases, was MiMedx’s quarterly and annual sales revenue.
Petit and Taylor, MiMedx’s former COO reportedly on multiple occasions demonstrated and touted “their understanding” of these rules governing revenue recognition.
They also publicly identified revenue as the “principal metric” reflecting MiMedx’s growth, and touted MiMedx’s consistent record of “quarter-over-quarter” revenue growth and meeting or “exceeding revenue guidance” in 17 consecutive quarters, from 2011 through year-end 2015.
Audrey Strauss, Manhattan U.S. Attorney, said: “Parker Petit used secret agreements and corrupt financial inducements with four distributors to materially misstate the quarterly and annual sales revenue of MiMedx.
“He deceived the SEC, auditors, and the investing public. Now he has been sentenced to prison for his crimes.”