The former CEO of a biotech healthcare company has been indicted for allegedly defrauding investors of more than $10 million through misrepresentations about an ultrasound device.
Stephen Baird, 67, the former CEO of S-Ray Inc., was indicted Feb. 8 for 10 counts of wire fraud, a news release said. Baird, formerly of Bainbridge Island, Wash., allegedly defrauded more than 200 investors out of more than $10.7 million by making false statements to investors 2012 and 2021.
“Mr. Baird is charged with defrauding investors for over a decade, falsely claiming that his company was on the cusp of making millions of dollars by selling a product that, in fact, never existed,” U. S. Attorney Nick Brown said in the release. “Instead of developing the device, he is charged with secretly diverting investor funds to his own personal use, such as a private residence and a luxury car. It’s time to hold Mr. Baird accountable.”
Baird was to be arraigned Feb. 16. Wire fraud carries a sentence of up to 20 years in prison, the release reported.
Baird told investors S-Ray developed an ultrasound device that would replace X-rays and would allow “dentists to quickly and safely image patients’ mouths.” He also said the Food and Drug Administration granted S-Ray “market clearance” to sell the device, the release said.
“In fact, S-Ray never developed any ultrasound product capable of producing usable dental images; was never close to offering any product for sale; and never received FDA authorization to market any products,” the release reported.
Baird told investors in 2020 that S-Ray was worth $400 million, even though by April 2019, S-Ray’s remaining employee – a chief technology officer – had left the company. Baird solicited investments, mostly from dentists and orthodontists, until March 2021, the release reported.
The corporate account had $13,000 at the end of 2021. Investors lost all investments, according to the release.
“Despite his representations that the investor money would be used to bring a product to market, at least 62% of the money – some $6.7 million – was used for Baird’s personal expenses or that of his family,” the release reported.
