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AIDS researcher gets 9-year sentence for fraud

http://www.timesdispatch.com/news/local/aids-researcher-gets--year-sentence-for-fraud/article_02db2cd0-13aa-5271-811d-52193a91a92e.html


Luray man used investors’ $800,000 on personal expenses


Posted: Thursday, July 11, 2013 4:45 am | Updated: 12:07 am, Fri Jul 12, 2013.

BY FRANK GREEN Richmond Times-Dispatch

A Luray researcher developing a treatment for AIDS who spent $800,000 of investor funds on personal expenses was sentenced to nine years in prison Wednesday.

U.S. District Judge Henry E. Hudson imposed the stiffest term called for under federal sentencing guidelines on Michael F. Harris after turning down efforts by the defense and prosecution to lessen and stiffen the sentence, respectively.
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Harris, 50, the winner of a patent to treat AIDS with hyperbaric chambers used for divers suffering from decompression sickness, was convicted of wire and mail fraud for telling investors the money would be used for research, human trials and to obtain a patent.

The evidence showed that of the $875,000 raised from 2005 to 2011, less than $55,000 was used to pay patent expenses and none for research. The rest was used to buy his home, pay alimony and other personal expenses.

Given a chance to make a statement before he was sentenced, Harris, who did not testify at his trial, told Hudson that, “I have not been allowed to say anything.

“I don’t feel like this is fair,” he said. “My intention is to continue with the project as much as I can.”

Hudson, however, told Harris that he may have received more letters from victims in the case than in any other he has handled, and that while many were sorry about the money they lost, they were also disappointed with his breach of trust.

“All these people thought it was a noble cause and they dug deeply in their pockets and you betrayed them,” Hudson told Harris.

Among the victims was a Henrico woman who invested $10,000. She and other investors testified at the trial that Harris never said anything about taking a salary or spending the money on anything other than the patent effort and research.

Earlier in Wednesday’s sentencing hearing, Michael R. Gill, an assistant U.S. attorney, argued for a nine-year term and told Hudson the crime took $800,000 from 67 victims.

Not all the investors, however, believe they are victims and even some who are upset with Harris still hope the treatment will prove viable.

“I do not feel like a victim,” testified Dr. Annie Prochera, an anesthesiologist from San Diego and an early investor. “This is a solid idea … a game-changer.”

Another San Diego anesthesiologist and investor, Dr. Thomas Marosi, had AIDS.

His brother, John Marosi, of California, testified Wednesday that his brother hoped the $200,000 he invested would enable human testing and that he and his two friends could be the first treated.

Evidence showed that within days of receiving Marosi’s investment, Harris used a substantial part of it to purchase a home in Luray in which he also had an office.

Marosi testified that his brother, who since died of causes unrelated to AIDS, “really felt that himself and his friends were going to be cured and that they would go on to do great things for mankind.”

Gill said Marosi “was standing at the abyss and he was hopeful. Michael Harris knew his victim was vulnerable … and he took full advantage.”

Though some questions were raised about the potential of the treatment in recent days, the government did not challenge its validity during the trial.

Robert J. Wagner, one of Harris’ lawyers, later said, “It wasn’t snake oil, judge. The government hasn’t shown that. (Marosi) was investing in a project that may very well turn out to be true.”

Wagner also argued that for sentencing purposes there were no losses to the investors. “They paid for the potential the company had for reaping huge rewards in the future,” Wagner said. And there was still a potential for profit, he said.

Hudson, however, said there was no way to value the worth of the stock. “It is up in the air. … It can’t be valued at this time,” he said. “The paper is virtually worthless at this point.”

After the hearing, Marosi said he believed the nine-year sentence was fair.

However, Harris’ father, Sydney Harris, said, “I think that he was railroaded. I think the man doesn’t have an ounce of malice in his heart.”

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