Rye exec charged with stealing $230,000
Thomas Fagan, a 57-year-old Rye resident, was accused by the New Jersey Attorney General”™s Office of stealing more than $230,000 in investor funds in two medical device companies for personal use.
Fagan was charged with misapplication of entrusted property, theft by unlawful taking, money laundering and misconduct by a corporate official, all second-degree felonies that carry a sentence of five to 10 years in state prison. Fagan was also charged with three counts of failure to file a personal income tax return in New Jersey.
Fagan was president and CEO of Energex Systems Inc., a developer of biotech products where he allegedly sold $9.5 million in unregistered  stock to 784 investors. Only one Energez product received FDA approval and the company never had significant sales.
In 2009, Fagan founded Arbios Acquisition Partners to take over Arbios Systems Inc. a medical device company. Fagan allegedly sold more than $1.6 million in unregistered notes and stocks. Both companies were based in Allendale, N.J.
The attorney general”™s office alleges Fagan used the investment money to cover casino gambling losses in Atlantic City and Las Vegas, and made company checks payable to himself.
Fagan allegedly structured $84,000 in transactions to disguise instances where he stole or misappropriated funds.
“We are making it a priority to investigate major financial crimes,” said Elie Honig, director of the Division of Criminal Justice. “This type of white-collar crime has a devastating impact on victims and we will aggressively prosecute this man and any others who prey on investors and consumers.”