Press Release
HELVETIA DEFENDANT SENTENCED TO 14 YEARS ON WIRE AND SECURITIES FRAUD
December 3, 2008
FOR IMMEDIATE RELEASE
R. Alexander Acosta, United States Attorney for the Southern District of Florida, and Jonathan I. Solomon, Special Agent in Charge, Federal Bureau of Investigation, announced today’s sentencing of defendant Nicholas Bachynsky. Bachynsky was sentenced by U.S. District Court Judge Adalberto Jordan to 14 years in prison, to be followed by three years of supervised release, on his conviction on one count of conspiracy, three counts of wire fraud, and one count of securities fraud. In addition, the Court ordered restitution in the amount of $5,509,364.70, and the forfeiture of $450,000 in U.S. currency and two Swiss bank accounts.
Bachynsky’s three co-defendants in the case – Arthur Scheinert, Laurence Dean, and Richard Anders – have all pled guilty. Scheinert received a 30-month term of imprisonment; Dean received a 57-month term of imprisonment; and Anders received a 10-year term of imprisonment.
Bachynsky’s conviction resulted from the marketing of stock and notes for a start-up company known as Helvetia Pharmaceuticals, Inc. Helvetia was launched in early 2001 to administer and develop a cancer treatment in Europe known as intracellular hyperthermia therapy. Helvetia’s solicitation of investors centered around a series of sales materials that contained a succession of significant misrepresentations. Bachynsky was the primary author of the false representations contained in the Helvetia sales materials.
During the six week trial, the government called witnesses and introduced exhibits that showed that the sales materials falsified the results of a series of unsuccessful laboratory and clinical trials, claiming that the trials had shown the therapy to be successful. The sales materials also falsely claimed that Helvetia possessed exclusive rights to the intercellular hyperthermia therapy. However, several years earlier Bachynsky had sold the rights to therapy to a former business associate. The sales materials further falsely claimed that the treatment was non-toxic, when in fact the treatment was based upon a substance that was not approved for human consumption by the federal Food and Drug Administration and was used commercially in pesticides and wood preservatives. The sales materials also covered up Bachynsky’s true role in the company and failed to disclose both his criminal history and adverse regulatory history.
Between early 2001 and August 2002, Helvetia raised close to $6 million from investors. Most investors lost their entire investment. Substantial portions of investor funds were misappropriated by Helvetia insiders for their own personal use.
Mr. Acosta commended the investigative efforts of the Federal Bureau of Investigation. Mr. Acosta also expressed appreciation for the cooperative efforts of the Southeast Regional Office of the Securities and Exchange Commission. Bachynsky’s conviction followed more than three years of extensive pre-trial litigation in this case. From the summer of 2004 until his passing in late September 2007, the case was prosecuted by Assistant United States Attorney Hugo L. Black, III. Bachynsky was tried by Assistant United States Attorneys Michael Davis and Mark Dispoto.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Technical comments about this website can be e-mailed to the Webmaster. PLEASE NOTE: The United States Attorney's Office does not respond to non-technical inquiries made to this website. If you wish to make a request for information, you may contact our office at 305-961-9001, or you may send a written inquiry to the United States Attorney's Office, Southern District of Florida, 99 NE 4th Street, Miami, Fl. 33132.