Former Employee Convicted of Embezzling $2.6M from Emeryville Biotech Company
A San Jose man has been sentenced to nearly three years in prison and ordered to pay more than $2.6 million in restitution for an embezzlement scheme involving an Emeryville Biotech company. U.S. Northern District if California Attorney David L. Anderson recently announced the news on their website.
Dinesh Shankar, 41, was an employee of Emeryville-based Channel Medsystems from 2013 until January, 2018.
According to the report, Shankar was found to have submitted multiple false expense reports and invoices to the company’s finance department over a four year period. His actions caused a loss to the company of approximately $2,576,384.
Channel Medsystems, headquartered at the EmeryStation building on Horton, developed a cryogen-based endometrial ablation system designed to treat heavy menstrual bleeding called Cerene. Cerene won CE Mark approval in the European Union in June 2017.
Channel had a deal to be acquired by Boston Scientific when news of the embezzlement came to light. Boston Scientific spiked the deal after learning of the scheme and the two companies are currently in litigation over the agreed upon $275 million buyout.
Shankar’s actions has caused Channel Medsystems to pay more than a half-million dollars in excess of the legitimate expenses and expenditures for services provided.
Prosecutors say Shankar admitted he created false invoices that appeared to be issued by six different entities but were in truth fictitious business names for entities he controlled.
The invoices made it appear the entities provided testing and quality assurance services to the company, but those services were never provided.
Shankar was indicted on April 12 on six counts of mail fraud. He pleaded guilty to one count, and the remaining five were dismissed.
Shankar was sentenced to 33 months in prison and was ordered to pay $2,618,000 in restitution. In addition to his prison sentence, he will serve a three-year term of supervised release.
He is scheduled to begin serving his sentence May 1.