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Parker H. “Pete” Petit indicted on accounting fraud charges

Parker H. "Pete" Petit | Image from MiMedx

Parker H. “Pete” Petit, alumnus and multi-million-dollar donor to Georgia State, was indicted on accounting fraud charges last week Tuesday. The federal indictment comes on the heels of a Securities and Exchange Commission investigation that began in 2018 into Petit’s actions as CEO of Marietta-based healthcare products company MiMedx.

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.”

The purported inflation was classified as “channel stuffing” by former MiMedx employees, which is the act of flooding the market with products that distributors can’t sell in order to inflate stock by making it look like the business is more successful than it actually is.

In a statement to The Wall Street Journal, Petit’s lawyer said the donor “adamantly denies the charges levelled against him.” But the fraudulent practices, if proven true, would have undoubtedly had an effect on the price of MiMedx’s stock, some of which was gifted to Georgia State in 2017 as a pledge of $10 million for the construction of the Georgia State Stadium.

Despite Petit denying the charges and allegations against him and his former company, MiMedx in 2018 walked back several years of financial reports that were under investigation at the same time that Petit was CEO.

The new charges were a result of the SEC investigation that began after several whistleblowers came forward, alleging potential fraud at MiMedx. On June 30, 2018, Petit resigned from MiMedx amid those allegations. It was discovered in September 2018, however, that he was ousted “for cause” by the company’s board of directors.

Petit was chair of the steering committee for Georgia State’s $300 million Burning Bright fundraising campaign up until the program ended. As chair of the committee, Petit was responsible for coordinating donations made to the university and the direction those loans would take toward various development projects.

In a statement to The Signal, the University System of Georgia’s Vice Chancellor for Communications Jen Ryan said that the Board of Regents is aware of the SEC’s action against Petit and “will continue to closely monitor the situation as it develops.”

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It’s a nearly identical statement the USG issued last year to The Signal when the SEC opened an investigation against Petit and his colleagues.

Petit’s name currently adorns the football field at Georgia State Stadium, as well as the Petit Science Center on Piedmont Avenue. USG policy stipulates that it is under the jurisdiction of the USG Chancellor and the Board of Regents to make any decision regarding the renaming of buildings and structures.

“Namings authorized by the Board of Regents shall not be modified without approval of the Board. If a situation occurs that may warrant the removal of a name that was previously approved by the Board of Regents, the decision whether to remove the name lies in the sole discretion of the Board in consultation with the Chancellor,” USG policy 7.4.1 states.

This is a developing story. Follow The Signal on Twitter at @gsusignal for immediate updates.