A former PixarBio (OTC:PXRB) employee pleaded guilty last Friday to charges of fraud and obstruction, according to a recent report from the Boston Business Journal.

The employee, Jay Herod, was accused of making false statements to the SEC and impeding their investigation, as well as manipulating company stock trades and misleading investors, according to the report.

Herod joins former investor relations VP Kenneth Stromsland, who pleaded guilty to defrauding investors and lying to federal investigators, according to the Boston Business Journal.

CEO Frank Reynolds, who faces similar allegations, told the Business Journal yesterday that he was unaware of the fraud and that he is continuing to work on bringing PixarBio’s non-opioid painkiller to the market.

Reynolds, Herod and Stromsland face accusations of fraudulently raising approximately $12.7 million to fund development of NeuroRelease, according to the report.

PixarBio is purportedly developing a drug to replace morphine and other opiates, but prosecutors alleged that the product is actually an older anti-convulsant called carbamazepine, sold under the trade name Tegretol, that’s used to treat epilepsy and neuralgia; PixarBio plans to re-formulate the drug as a time-release injection called NeuroRelease.

That didn’t stop Reynolds from touting NeuroRelease to investors as the end to “thousands of years of morphine and opiate addiction,” the feds alleged, citing a December 2015 Reynolds email to investors. In that email the former InVivo Therapeutics (NSDQ:NVIV) chief executive pledged “a HUGE return on investment (ROI) for any investors in PixarBio’s NeuroRelease.”

Last April, federal authorities arrested Reynolds and his associates over the securities fraud charges.