Archive for Saturday, March 6, 2004

BioCore founder charged with fraud

Money laundering among charges related to former Kansas businessman

March 6, 2004


— The founder of a biomedical company that was once based in Topeka has been accused of providing false documents to two Kansas banks to obtain more than $4.9 million in loans for the company, U.S. Atty. Eric Melgren said Friday.

Manoj K. Jain, the owner, president and chief executive officer of BioCore Inc., is charged in U.S. District Court in Kansas City, Kan., with two counts of bank fraud and conspiracy to commit money laundering, Melgren said. BioCore once had offices in Topeka and Oskaloosa but has since moved to Maryland, where Jain now lives.

Also charged with conspiracy to commit money laundering are BioCore's former vice president of corporate finance, Harvey Greenwald, 63, of Fort Worth, Texas; Richard Cayce Sr., 58, of Roanoak, Texas, who owned and operated ODC Biotech International Ltd. with Greenwald; and Richard Cayce Jr., of Denton, Texas, who owned and operated August Trading L.L.C. out of Fort Worth, Texas, with his father.

In a separate indictment, Jain is charged with two counts of filing fraudulent federal income tax returns for 1994 and 1995 by failing to report income he received from BioCore, which manufactures wound dressings made from collagen, a basic building block of skin, extracted from leather shavings.

Both indictments, returned last month, were unsealed Thursday, when Jain, 40, of Potomac, Md., was arrested.

One of the indictments, returned Feb. 5, alleges that from April 1999 through September 1999, Jain and Greenwald provided a false appraisal and supporting documents to American Bank in Wichita so that Jain could get a $1 million loan for BioCore. The indictment alleges that from December 1999 through May 2000, Jain, Greenwald and Cayce Sr. provided a false appraisal and supporting documents to allow Jain to obtain a $3.95 million loan from First Savings Bank in Manhattan.

All four men are accused of transferring money between their various companies' bank accounts in an alleged attempt to launder the money.

Jain was released on bond with electronic monitoring after appearing in U.S. District Court in Greenbelt, Md., Melgren said.

Jain's next court appearance was scheduled for 1:30 p.m. Wednesday in Kansas City, Kan., before U.S. Magistrate Judge David J. Waxse. Greenwald and Cayce Jr. are scheduled to make their initial appearances in federal court before Waxse at the same time. Cayce Sr. is scheduled to appear before Waxse on March 30.

BioCore officials did not return a phone call seeking comment Friday. None of the men charged in the indictments could be reached for comment; none had telephone numbers listed under their names.

BioCore came under scrutiny in 1997 amid allegations that it hired three state lawmakers to gain access to taxpayer money. Those politicians were Phill Kline, now the state attorney general; former House Speaker Tim Shallenburger, who also served as state treasurer from 1999 to 2003; and former state Rep. Greg Packer.

Kline worked for BioCore in 1996, when he was in the House, but resigned before the start of the 1997 legislative session. Shallenburger worked for BioCore from July 1995 through December 1997. He later became the state treasurer.

A Kansas Bureau of Investigation probe cleared the company of using the legislators' influence.

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