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www.HartfordBusiness.com • April 16, 2018 • Hartford Business Journal 5 Medtech entrepreneur defaults on state loan, files for bankruptcy By Greg Bordonaro and Matt Pilon gbordonaro@HartfordBusiness.com A New York entrepreneur who received a $400,000 economic development package from the state early last year to develop a medical- technology innovation hub in Hart- ford has filed for personal bankruptcy, according to court records. Meanwhile, the Department of Economic and Community Devel- opment disclosed that it declared David Wagner's company, CliniFlow Technologies, to be in default of its grant-loan package back on Nov. 14, about one week after the Hartford Business Journal detailed a history of investor fraud allegations against Wagner and his companies. "We are now working with the Attorney General's Office to ag- gressively pursue repayment of the DECD funding," DECD spokesman Jim Watson said. "I cannot provide any additional details at this time as this is an ongoing legal matter." Wagner, who had once pledged to build a $45 million med-tech center near Hartford Hospital containing several startups, filed a Chapter 7 petition in Rhode Island federal court on Jan. 17, court records show. However, the filings do not appear to list Connecticut as a creditor. At- torney General George Jepsen's office declined to comment for this story on how the state is pursuing repayment. The bankruptcy petition claims Wagner is not employed, has just $4,260 per year in income and that he is on Medicaid. He reported owing between $1 mil- lion and $10 million in debts, while having assets worth an estimated $60,000 or less. Deutsche Bank National Trust Co. asked the court for relief from Wag- ner's bankruptcy stay, in order to pur- sue foreclosure on his East Greenwich, Rhode Island home, on which Wagner owed $764,716 as of Jan. 26, according to the bank's motion, which the court granted on March 7, filings show. Wagner and his bankruptcy at- torney did not re- spond to a request for comment for this story. CliniFlow Technologies is a little-known company to most in Connecticut, but state officials hailed its deci- sion last year to move from New York to a dis- tressed Hartford corridor, where it planned to house three startups in a newly built office building and create 195 jobs in exchange for $3.6 million in taxpayer money. While the $3.6 million in state bonding was authorized for the proj- ect, DECD never released those funds because CliniFlow failed to meet certain project milestones related to land leases, construction and raising private funds. However, DECD did provide Wag- ner $400,000 under its Small Busi- ness Express program. Legal history HBJ's Nov. 6 story highlighted potential weaknesses in DECD's vetting process — mainly that the agency didn't check federal court databases when vetting po- tential state-aid recipients. Bart Kollen, DECD's deputy commissioner, said the agency was unaware of Wagner's past legal troubles before they seeded CliniFlow with Small Business Express funds and the Bond Commission approved the $3.6 million. He noted Wagner had answered "no" on an application question asking him if he had any outstanding, pending or anticipated legal issues. However, information on several civil lawsuits filed in federal court against Wagner and companies he's associated with — filed by both lend- ers and former employees — was available online through the federal court system's PACER database. One suit, filed in New York federal court in May 2016, accused Wagner and associated companies of "out- right fraud" and running a "novel Ponzi scheme" that used money from new employee-investors to pay back- wages of existing workers, federal court records show. David Wagner, CEO, CliniFlow Technologies PDS has been meeting the needs of the construction industry since 1965. Our dedicated team of design and construction professionals welcomes the challenge of serving its past and future customers on their most demanding projects. Mary Walsh Elementary School | Springfi eld, Massachusetts PDS served in the role as General Contractor to complete this 44,000 square foot school renovation. The project consisted of installing all new energy effi cient aluminum storefront window and door systems, FRP doors, interior fi nishes, HVAC system, handicap accessibility upgrades to bathrooms and exterior site improvements. 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