Stamford Couple Charged in Connection with Investment Fraud Scheme
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that a federal grand jury in New Haven has returned a 39-count indictment charging THOMAS J. CONNERTON, 64, and JEAN S. ERICKSON, 62, both of Stamford, with various offenses stemming from an investment scheme that defrauded individuals of more than $2 million.
The indictment was returned on March 7. CONNERTON and ERICKSON were arrested yesterday and appeared before U.S. Magistrate Judge William I. Garfinkel in Bridgeport. CONNERTON was detained pending a detention hearing that is scheduled for Monday at 1:00 p.m. ERICKSON was released on a $250,000 bond.
As alleged in the indictment, CONNERTON was the founder, president, and CEO of Safety Technologies, LLC (“Safety Tech”), a Connecticut company that had its principal place of business at various times in Simsbury, Madison, Westport and Stamford. Safety Tech was founded in 2006, purportedly for the purpose of developing and commercializing what was represented to be a highly durable puncture and cut resistant material that was to be used in the surgical glove market and other related markets. Safety Tech has not yet obtained any patents from the U.S. Patent and Trademark Office, and CONNERTON did not register Safety Tech’s securities with the U.S. Securities and Exchange Commission (“SEC”).
The indictment alleges that, beginning in approximately June 2009, CONNERTON induced victim-investors to provide him funds and to purchase Safety Tech securities by falsely representing that the valuation of Safety Tech was realistically in the tens or hundreds of millions of dollars, that a lucrative deal to sell or license his glove technology was imminent, and that he would use their funds for research and development, product testing, and to bring the product to market. CONNERTON offered his investors small amounts of equity in Safety Tech through “Subscription Agreements” or investments contracts through which he sold what he described as “Units.”
It is alleged that CONNERTON made numerous other false representations to victim-investors, including stating in September 2015, “I will go on the record to state that there is not a single investor that will lose one dollar invested in Safety Technologies.”
The indictment alleges that even though CONNERTON represented to victim-investors and potential victim-investors that the funds they invested would be used to fund research and development, for product testing, for business expenses and for legal fees, he used invested funds to pay personal expenses including, on two separate occasions, to purchase diamond engagement rings from Tiffany & Co. CONNERTON also used funds to repay loans to an earlier investor.
Through this scheme, it is alleged that CONNERTON defrauded more than 50 victim-investors of more than $2 million.
The indictment further alleges that CONNERTON, with ERICKSON’s assistance, engaged in monetary transactions in an attempt to conceal from the FBI and the SEC the nature and source of funds received by Safety Tech from the sale of Safety Tech securities. CONNERTON and ERICKSON negotiated checks and purchased bank checks in order to move the fraudulent proceeds from one account to another.
The indictment also alleges that, in April 2016, ERICKSON contacted the FBI and falsely stated that she was just an investor when, in truth, she was engaged to CONNERTON and sharing a residence with him at the time. During the call, ERICKSON provided a false address to an FBI Special Agent.
The indictment charges CONNERTON with 12 counts of wire fraud, one count of mail fraud and 18 counts of securities fraud, offenses that carry a maximum term of imprisonment of 20 years on each count. The indictment also charges CONNERTON with six counts, and ERICKSON with one count, of money laundering, an offense that carries a maximum term of imprisonment of 10 years on each count. CONNERTON and ERICKSON are also charged with money laundering conspiracy, an offense that carries a maximum term of imprisonment of 20 years, and ERICKSON is charged with one count of making a false statement to a federal agent, an offense that carries a maximum term of imprisonment of five years.
U.S. Attorney Daly stressed that an indictment is not evidence of guilt. Charges are only allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the Federal Bureau of Investigation and Internal Revenue Service – Criminal Investigation Division. The case is being prosecuted by Assistant U.S. Attorney Michael S. McGarry.
Citizens with information that may be helpful to this ongoing investigation, or who believe they have been victimized by this scheme, are encouraged to contact the FBI at (203) 777-6311.