Group K Diagnostics, a Center City-based medical device company, is suing its former chief operating officer and the marketing company of which he is president, alleging he used more than $200,000 in company money for personal expenses.
The suit, filed in late June in Pennsylvania’s Eastern District Court, states that Joseph Geromini approached Group K founder Brianna Wronko in June 2018 offering consulting services.
Wronko started the company in February 2017, aiming to create a cost-effective blood test device. By the end of 2018, the company had raised more than $2 million in its Series A funding.
In July of last year, Group K hired Geromini as an independent contractor, the suit says, and throughout that month, “Geromini assisted Group K with fundraising and business operations and Wronko came to trust and rely upon Geromini.”
For his services, Geromini’s company, Xanitos Marketing LLC, was paid $15,960. Geromini is the sole employee of Xanitos.
The next month, the suit alleges, Geromini “pressed” Wronko to hire him as Group K’s COO, and therefore gained control of management and financial information, and was also granted common stock in the company.
During the spring of 2019, Group K received notices from the IRS about unpaid taxes that Geromini owed. After investigating further, the company discovered a “repeated misuse of company resources to cover personal, non-business related expenses,” the suit said.
The company has estimated that Geromini took more than $200,000 in misappropriated funds, including making wire transfers to himself and his company, using Group K credit and debit cards as well as checks for personal use. The suit alleges that Geromini often wired the exact amount of his paychecks from the business account to hide the theft.
On one occasion in May of this year, the suit says, Geromini wired himself an unauthorized $50,000.
The suit outlines other personal purchases Geromini allegedly made:
- March 2019 — $2,700 for a suite at the Philadelphia 76ers basketball game
- April 2019 — $5,495 to pay Optima Tax Relief for his personal taxes
- May 2019 — $1,503 for hotel expenses in Woodlands, Texas while attending an Ironman triathalon
- May 2019 — $8,320 to cover personal medical expenses
The suit also alleges that Geromini made ATM withdrawals of $4,789 in Linwood, New Jersey, near his home and in Woodlands for $1,346. The suit also says he made checks out to himself for thousands of dollars on multiple occasions.
Geromini claimed these purchases were business-related, the suit says.
Group K fired Geromini on May 24 and filed the suit alleging he misappropriated the funds and broke his contract. The company is seeking damages.
Peter C. Buckley, an attorney representing Group K, said the company is not commenting on the pending litigation. When reached for comment, Geromini also said he did not wish to comment.
These experienced investors want to prove that funding advances in women’s health is ‘worth it’
Jefferson Health partnered with startup NeuroFlow for this mental health platform
A Philly startup trying to treat glaucoma was chosen for a California-based medtech accelerator
Why Linode sent this manager to Mumbai for 7 months
Old City medtech startup Strados Labs set to hire after raising $1.8M
Ex-CIO Charlie Brennan sues city for wrongful termination
Learn to spot ‘legal landmines’ at this Bunker Labs event
This financial services firm offers global opportunity in the heart of Philly
Sign-up for daily news updates from Technical.ly Philadelphia