Canrock Investigated in Investment Scandal

By Rebecca Martelotti
Assistant Features Editor

Canrock Ventures, the four- year-old early stage technology venture capital corporation that moved on to campus during Thanksgiving weekend 2013, failed to notify New York State officials of potential conflicts of interest. The company invested taxpayer money in local technology start- ups, according to a representative at Empire State Development (ESD), New York’s chief economic development agency.

The Pioneer reported on April 23, 2014, that Canrock was being reviewed by the United States Department of Treasury and (ESD) because they failed to inform New York State officials that they invested federal money into companies they owned a portion of. The investigation began in November 2013, and is ongoing. Canrock Ventures received $5.7 million in 2012 from New York State as part of the Innovate NY Fund, which was created in 2011, and invests in technology start-ups through venture capital firms based in New York State.

Canrock Ventures received the funds so it could invest in technology startups on Long Island and in New York City. The four companies that Canrock Ventures invested in are all partially owned by the company, and are located at their LIU Post offices, according to a Newsday article published on Oct. 15, 2014. The article “Canrock Ventures didn’t report potential conflicts in LI tech investments, officials say” was written by James Madore. According to the article, Canrock Ventures has put nearly $2 million of Innovate NY funds into five startups where it is either the largest shareholder or owns a significant stake.

“We are looking into potential conflicts of interest with the company and certain investments they made within the company,” said Jason Conwall, Press Secretary for ESD. “There is a serious review [being conducted] of investments, the involvement of Mark Fasciano, and Canrock Ventures overall, and how much of an ownership stake Fasciano has in the companies that the investments went to,” Conwall said.

Mark Fasciano is the managing director of Canrock Ventures at Thought Box 1 in Hicksville, and the founder of the business incubator ThoughtBox@LIU. Fasciano declined to comment about the investigation.

There is a coordinated effort between the investigations of ESD and the United States Department of Treasury. The investigation is “coordinated but separate,” Conwall said.

Canrock’s offices were originally located in the basement of the library, but moved to new offices on the third floor of Hillwood Commons in early September, according to William Kirker, director of the Facilities Department. Kirker did not know the details of the company’s lease agreement with the university.

The office of President Dr. Kimberly Cline did not comment on the investigation. The Pioneer received a response from Dianne Zoppa, Director of Public Relations for LIU. Zoppa said, “LIU Post does not comment on the investigations of other companies.”

 

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