It’s been nearly a year since the Canopy Financial fraud began unraveling, and justice is finally beginning to assert herself.
For the uninitiated, Canopy was a VC-backed company that helped streamline the administration of Health Savings Accounts. It raised over $88 million in VC funding, including a $62.5 million slug in the summer of 2009 from Spectrum Equity Investors and return backer Foundation Capital. Not long after, the investors began realizing that a bunch of internal numbers weren’t matching up.
Turns out that certain Canopy execs had cooked the books to a crisp – creating false audits and bank statements during the due diligence process. They even raided their own customers’ HSAs – to the tune of $18 million – to cover company expenses and for personal gain. Lovely people.
One of those executives, former CTO Anthony Banas, has now pled guilty to wire fraud. The crime comes with penalties of up to 20 years in prison and up to $250,000 in fines, but my guess is that he’ll get off relatively easy for turning on alleged co-conspirator Jeremy Blackburn (Canopy’s former COO).
To my knowledge, there have not been any formal charges against Canopy’s former CEO or its board members (including those who partially cashed out via the Spectrum investment). I guess the authorities believe their claims of stupidity…
Below is a copy of Banas’ guilty plea:
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