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Press Release

Norman Gray, Founder And CEO Of A Biomedical Company, Convicted At Trial For Defrauding Victim Of Nearly $1.5 Million

For Immediate Release
U.S. Attorney's Office, Southern District of New York

Damian Williams, the United States Attorney for the Southern District of New York, announced that on May 29, 2024, a jury returned a guilty verdict against NORMAN GRAY for wire fraud in connection with a scheme to defraud a victim (“Victim-1”) of nearly $1.5 million through false promises and bogus documents.  GRAY falsely represented to Victim-1 that Victim-1’s funds would be invested in GRAY’s biomedical company (the “Biomedical Company”) and in deals to support the Biomedical Company through the sale of personal protective equipment (“PPE”) during the height of the COVID-19 pandemic.  In reality, Victim-1’s funds were not used by GRAY as promised, and he instead used Victim-1’s funds to, among other things, retire prior debts and purchase himself a high-end automobile and a large home in Connecticut.  GRAY’s scheme to defraud Victim-1 also involved the use of fabricated documents and the wholesale invention of a fake mortgage company and a fictitious mortgage broker.  GRAY was found guilty after a seven-day trial before U.S. District Judge Paul A. Engelmayer.  Judge Engelmayer remanded GRAY to the custody of the U.S. Marshals Service earlier today.  

U.S. Attorney Damian Williams said: “Norman Gray meticulously crafted a relationship of trust and confidence with his victim by lying about his background, the financial health of his company, and how he would invest the victim’s money.  Over the course of just a few weeks in 2020, Gray induced his victim to send him nearly $1.5 million after learning that the victim had recently been awarded a substantial sum of money in a commercial arbitration.  Gray’s brazen scheme involved lie after lie, which included the use of fake documents and a made-up mortgage company.  Gray’s lies have finally caught up with him, and he now faces substantial time in prison.”

According to the Superseding Indictment, public filings, public court proceedings, and the evidence presented at trial:

At all relevant times, GRAY was the founder and CEO of the Biomedical Company, which is headquartered in Hamden, Connecticut.  GRAY presented himself to Victim-1 and others as a billionaire scientist with a Ph.D. from MIT at the helm of a company he was personally funding that was potentially worth hundreds of millions of dollars.  In reality, GRAY did not have a Ph.D., and, as of August 2020, both he and the Biomedical Company were in significant debt.  In or about August 2020, GRAY induced Victim-1 to send him $250,000 as a purported investment in the Biomedical Company.  Rather than purchase equity for Victim-1, GRAY used nearly all of Victim-1’s $250,000 payment to repay a loan that GRAY had taken out from a tenant in the same building where the Biomedical Company is headquartered in order to make payroll.  In the ensuing weeks, GRAY extracted an additional $1,217,000 from Victim-1, representing that Victim-1’s funds would be invested in deals involving the procurement of PPE for two major universities in the tristate area.  GRAY falsely represented that his prior PPE deals had turned a 40% profit within 90 days, that he already had purchase orders in hand for PPE worth nearly $8 million, and that, therefore, the risk was “virtually zero.”  In reality, over the preceding months, GRAY had accumulated a vast inventory of unsellable PPE, the purported purchase orders were fake, and GRAY did not invest Victim-1’s funds in PPE.  Instead, GRAY misappropriated Vicitm-1’s funds, in part, to purchase himself a nearly $1 million home, a $50,000 luxury SUV, and to pay down $200,000 of his and his family’s credit card debt.  

As part of his scheme to defraud Victim-1, and as a means of dispelling Victim-1’s concern that an investment with GRAY might require Victim-1 to forego the purchase of a home, GRAY offered Victim-1 a mortgage from a purported boutique mortgage company of which he was the sole investor.  GRAY directed Victim-1 to a purported mortgage broker that worked for this boutique mortgage company.  In reality, both the mortgage company and the mortgage broker were completely fabricated by GRAY and did not exist.  To further this aspect of the fraud on Victim-1, GRAY registered an internet domain in the name of the purported mortgage company and created an email address in the name of the invented mortgage broker contemporaneously with making his false representations to Victim-1.  As GRAY’s fraud began to unravel in or about early November 2020, GRAY promised to return all of Victim-1’s money.  Ultimately, GRAY never returned any money to Victim-1, and after Victim-1 asked GRAY to provide her with the purported PPE purchase orders from the two universities, she never heard from GRAY again.

 As demonstrated at trial, at the outset of the scheme to defraud Victim-1, GRAY separately attempted to defraud a board member of the Biomedical Company who had introduced Victim-1 to GRAY.  GRAY solicited a $150,000 loan from the board member to make the Biomedical Company’s payroll and sent the board member a fake wire transfer supposedly demonstrating that GRAY would soon receive over half a million dollars and therefore would be able to repay the board member in short order.  In reality, GRAY forged the wire transfer document, and no such money actually arrived. 

If you believe you are a victim of any crimes related to NORMAN GRAY, please email USANYS.NormanGrayCase@usdoj.gov.

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GRAY, 68, of Hamden, Connecticut, was convicted of one count of wire fraud, which carries a maximum potential sentence of 20 years in prison. 

The maximum potential penalty is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.  GRAY is scheduled to be sentenced by Judge Engelmayer on September 12, 2024, at 2:30 p.m.

Mr. Williams praised the outstanding investigative work of the Special Agents of Homeland Security Investigations.  Mr. Williams also thanked the New Haven Police Department, as well as law enforcement authorities in the United Kingdom and Spain and the Justice Department’s Office of International Affairs, for their assistance.

This case is being handled by the Office’s Illicit Finance and Money Laundering Unit.  Assistant U.S. Attorneys Benjamin A. Gianforti, Vladislav Vainberg, and Jessica Greenwood are in charge of the prosecution.

Contact

Nicholas Biase, Lauren Scarff, Shelby Wratchford
(212) 637-2600

Updated June 3, 2024

Topic
Financial Fraud
Press Release Number: 24-191