Parker H. “Pete” Petit, an alumnus of and former multi-million-dollar donor to Georgia State, pleaded guilty on fraud accounting charges.
Audrey Strauss, the acting U.S. attorney for the Southern District of New York, announced after a four-week trial, Petit was convicted of one count of securities fraud that carries up to 20 years in federal prison.
Along with William Taylor, the former chief operating officer of MiMedx Group, Inc., who pleaded guilty of conspiracy to commit securities fraud, making false statements in filings to the U.S. Securities and Exchange Commission and misleading the audits’ conduct. Taylor’s charges carry a sentence of up to five years in prison.
Both convictions stem from Petit and Taylor’s participation in a scheme to inflate MiMedx’s revenue fraudulently.
According to an additional civil suit filed against Petit and two of his associates, MiMedx “engaged in a wide-ranging fraud designed to artificially inflate the company’s reported revenue.”
Petit stands guilty of inflation by channel stuffing, which is the practice of a company inflating its sales and earnings figures by deliberately sending retailers along its distribution channel more products than they can sell to the public.
In 2018, the SEC began an investigation into Petit, former CEO of MiMedx, which resulted in his federal indictment on accounting fraud charges for his participation in MiMedx’s revenue scheme.
“As the jury found, Parker Petit and William Taylor employed secret agreements and corrupt financial inducements with four distributors to materially misstate the quarterly and annual sales revenue of MiMedx,” Strauss said. “In the process, they deceived the SEC, auditors and the investing public, repeatedly misrepresenting the financial condition of their publicly-traded company.
Although Petit has repeatedly denied all charges and allegations against him and his former company, in 2018, MiMedx walked back multiple years of financial reports under investigation by the SEC when Petit was CEO at the time.
On June 30, 2018, Petit resigned from MiMedx amid those allegations. However, in September 2018, it was discovered that the company’s board of directors forced him to resign.
Petit has come under scrutiny from the U.S. Department of Justice, the U.S. Securities and Exchange Commission, the Department of Veterans Affairs and the Food and Drug Administration. He is also involved in lawsuits with ex-employees and shareholders.
The Signal previously reported in August 2017, Georgia State announced Petit’s pledge of $10 million to the Georgia State Athletics Department. In return, the department stamped Petit’s name on Georgia State’s new football field.
In a previous statement that the University System of Georgia issued in 2018 to The Signal, Vice Chancellor for Communications Jen Ryan said that the Board of Regents was aware of the SEC’s action against Petit and “will continue to closely monitor the situation as it develops.”
The USG policy stipulates that it is under the jurisdiction of the USG Chancellor and the Board of Regents to decide the renaming of buildings and structures.
Petit is scheduled to be sentenced on Feb. 23, 2021, and Taylor is expected to be sentenced a day after Petit.