Norman Gray, Founder and CEO Of Biomedical Company, Sentenced For Defrauding Investors Of More Than $13 Million

Press Release Norman Gray, Founder and CEO Of Biomedical Company, Sentenced For Defrauding Investors Of More Than $13 Million Thursday, February 20, 2025 Share FacebookLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. XLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. LinkedInLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. Email For Immediate Release U.S. Attorney's Office, Southern District of New York Matthew Podolsky, the Acting United States Attorney for the Southern District of New York, announced that NORMAN GRAY, the founder and CEO of a biomedical company (the “Biomedical Company”), who defrauded investors of over $13 million, was sentenced today by U.S. District Judge Paul A. Engelmayer to 10 years in prison. GRAY was convicted of wire fraud at trial on May 29, 2024.Acting U.S. Attorney Matthew Podolsky said: “Norman Gray preyed upon people who wanted to invest in developing life-saving medicine for children with a rare and generally fatal disease. Gray gained his victims’ trust by lying about everything from his educational background and to his supposed access to off-shore trusts he could use to fund his company alongside the investors. He even submitted false patent applications, invented a fake mortgage company, and forged FBI background check records. Thanks to the work of the career prosecutors of this Office and our law enforcement partners, Gray has now received just punishment.”According to the Superseding Indictment, public filings, public court proceedings, the evidence presented at trial and in connection with sentencing:At all relevant times, GRAY was the founder and CEO of the Biomedical Company, which is headquartered in Hamden, Connecticut. GRAY presented himself to investors (including “Victim-1” and “Victim-2”) and others as a billionaire scientist and successful entrepreneur 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. GRAY claimed to have previously created a successful medical equipment company (“Prior Company”) with over 1,000 employees, which was earning approximately $900 million in revenues before GRAY sold it to a foreign pharmaceutical company. GRAY claimed that he put the profits from the sale of the Prior Company into his offshore trust (“Offshore Trust”), which he claimed held more than $300 million, and which he was using to self-fund the Biomedical Company. In reality, GRAY did not have a Ph.D., had not created or sold a nearly billion-dollar company, did not have access to hundreds of millions of dollars to fund Biomedical Company, and, as of 2020, both he and the Biomedical Company were in significant debt. Beginning in 2016, GRAY also claimed to employees and investors in Biomedical Company, including Victim-1 and Victim-2, and in written investment materials, that a flagship medication being developed by Biomedical Company was approved for compassionate treatment in Saudi Arabia, where it was saving the lives of two specific children who were suffering from a rare and generally fatal disease known as MVID. Victim-2 sent $200,000 to GRAY to continue funding this supposed program. GRAY submitted treatment data from the supposed program in patent applications for the flagship drug. But the program did not exist.Based on GRAY’s misrepresentations, between 2018 and 2020, Victim-2 invested approximately $7.6 million in the Biomedical Company through wire transfers into accounts controlled by GRAY. In May 2020, at the outset of the COVID-19 pandemic, GRAY fraudulently induced Victim-2 to invest into a joint venture with GRAY to purchase personal protective equipment (“PPE”) and resell it to hospitals and universities in the United States and Spain. GRAY provided Victim-2 with fabricated purchase orders from two New York-area hospitals purporting to show that he had close to $8 million of committed sales. Victim-2 sent three wire transfers totaling $1,751,342 to GRAY’s account. Ultimately, the PPE that GRAY purchased could not be sold, because it was defective or otherwise not fit for market, and Victim-2 lost the $1.75 million supposedly invested by GRAY into the PPE project.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 who committed to close to $8 million in sales in essentially the same amounts as GRAY’s prior fabricated purchase orders sent to Victim-2. Notwithstanding the losses Victim-2 had already experienced through GRAY’s venture, GRAY falsely represented to Victim-1 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 recycled fakes, and GRAY did not invest Victim-1’s funds in PPE. Instead, GRAY misappropriated Victim-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.Victim-2 was a board member of the Biomedical Company at the time that GRAY defrauded Victim-1. Following Victim-1’s report of GRAY’s fraud to the board in November 2020, accompanied by publicly available evidence of GRAY’s prior criminal history, GRAY reassured Victim-2 that he had no criminal history beyond driving infractions. GRAY also produced to the board a fraudulent record purportedly from the FBI disclaiming any criminal history and falsely asserting that GRAY had a “top secret” clearance status renewed on November 14, 2016. After being reassured by GRAY that Victim-1’s allegations were meritless, Victim-2 provided approximately over $2.3 million in loans separate from his over $7.5 million of Vanessa investments and $1.75 million of PPE investments.At trial, GRAY obstructed justice by attempting to introduce into evidence a false document supposedly drafted after GRAY’s fraud on Victim-1 was complete and purporting to memorialize an agreement by Victim-1 to “convert” her PPE investment into shares of Biomedical Company.* * *In addition to the prison term, GRAY, 69, of Hamden, Connecticut, was sentenced to 3 years of supervised release. GRAY also was ordered to pay forfeiture in the amount of $1,467,000 and to forfeit his interest in the home and luxury vehicle discussed above. The Court also ordered restitution of $1,533,675 to Victim-1.Mr. Podolsky praised the outstanding investigative work of the Special Agents of Homeland Security Investigations. Mr. Podolsky 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. Updated February 20, 2025 Component USAO - New York, Southern Press Release Number: 25-038

Press Release Norman Gray, Founder and CEO Of Biomedical Company, Sentenced For Defrauding Investors Of More Than $13 Million Thursday, February 20, 2025 Share FacebookLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. XLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. LinkedInLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. Email For Immediate Release U.S. Attorney's Office, Southern District of New York Matthew Podolsky, the Acting United States Attorney for the Southern District of New York, announced that NORMAN GRAY, the founder and CEO of a biomedical company (the “Biomedical Company”), who defrauded investors of over $13 million, was sentenced today by U.S. District Judge Paul A. Engelmayer to 10 years in prison. GRAY was convicted of wire fraud at trial on May 29, 2024.Acting U.S. Attorney Matthew Podolsky said: “Norman Gray preyed upon people who wanted to invest in developing life-saving medicine for children with a rare and generally fatal disease. Gray gained his victims’ trust by lying about everything from his educational background and to his supposed access to off-shore trusts he could use to fund his company alongside the investors. He even submitted false patent applications, invented a fake mortgage company, and forged FBI background check records. Thanks to the work of the career prosecutors of this Office and our law enforcement partners, Gray has now received just punishment.”According to the Superseding Indictment, public filings, public court proceedings, the evidence presented at trial and in connection with sentencing:At all relevant times, GRAY was the founder and CEO of the Biomedical Company, which is headquartered in Hamden, Connecticut. GRAY presented himself to investors (including “Victim-1” and “Victim-2”) and others as a billionaire scientist and successful entrepreneur 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. GRAY claimed to have previously created a successful medical equipment company (“Prior Company”) with over 1,000 employees, which was earning approximately $900 million in revenues before GRAY sold it to a foreign pharmaceutical company. GRAY claimed that he put the profits from the sale of the Prior Company into his offshore trust (“Offshore Trust”), which he claimed held more than $300 million, and which he was using to self-fund the Biomedical Company. In reality, GRAY did not have a Ph.D., had not created or sold a nearly billion-dollar company, did not have access to hundreds of millions of dollars to fund Biomedical Company, and, as of 2020, both he and the Biomedical Company were in significant debt. Beginning in 2016, GRAY also claimed to employees and investors in Biomedical Company, including Victim-1 and Victim-2, and in written investment materials, that a flagship medication being developed by Biomedical Company was approved for compassionate treatment in Saudi Arabia, where it was saving the lives of two specific children who were suffering from a rare and generally fatal disease known as MVID. Victim-2 sent $200,000 to GRAY to continue funding this supposed program. GRAY submitted treatment data from the supposed program in patent applications for the flagship drug. But the program did not exist.Based on GRAY’s misrepresentations, between 2018 and 2020, Victim-2 invested approximately $7.6 million in the Biomedical Company through wire transfers into accounts controlled by GRAY. In May 2020, at the outset of the COVID-19 pandemic, GRAY fraudulently induced Victim-2 to invest into a joint venture with GRAY to purchase personal protective equipment (“PPE”) and resell it to hospitals and universities in the United States and Spain. GRAY provided Victim-2 with fabricated purchase orders from two New York-area hospitals purporting to show that he had close to $8 million of committed sales. Victim-2 sent three wire transfers totaling $1,751,342 to GRAY’s account. Ultimately, the PPE that GRAY purchased could not be sold, because it was defective or otherwise not fit for market, and Victim-2 lost the $1.75 million supposedly invested by GRAY into the PPE project.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 who committed to close to $8 million in sales in essentially the same amounts as GRAY’s prior fabricated purchase orders sent to Victim-2. Notwithstanding the losses Victim-2 had already experienced through GRAY’s venture, GRAY falsely represented to Victim-1 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 recycled fakes, and GRAY did not invest Victim-1’s funds in PPE. Instead, GRAY misappropriated Victim-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.Victim-2 was a board member of the Biomedical Company at the time that GRAY defrauded Victim-1. Following Victim-1’s report of GRAY’s fraud to the board in November 2020, accompanied by publicly available evidence of GRAY’s prior criminal history, GRAY reassured Victim-2 that he had no criminal history beyond driving infractions. GRAY also produced to the board a fraudulent record purportedly from the FBI disclaiming any criminal history and falsely asserting that GRAY had a “top secret” clearance status renewed on November 14, 2016. After being reassured by GRAY that Victim-1’s allegations were meritless, Victim-2 provided approximately over $2.3 million in loans separate from his over $7.5 million of Vanessa investments and $1.75 million of PPE investments.At trial, GRAY obstructed justice by attempting to introduce into evidence a false document supposedly drafted after GRAY’s fraud on Victim-1 was complete and purporting to memorialize an agreement by Victim-1 to “convert” her PPE investment into shares of Biomedical Company.* * *In addition to the prison term, GRAY, 69, of Hamden, Connecticut, was sentenced to 3 years of supervised release. GRAY also was ordered to pay forfeiture in the amount of $1,467,000 and to forfeit his interest in the home and luxury vehicle discussed above. The Court also ordered restitution of $1,533,675 to Victim-1.Mr. Podolsky praised the outstanding investigative work of the Special Agents of Homeland Security Investigations. Mr. Podolsky 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. Updated February 20, 2025 Component USAO - New York, Southern Press Release Number: 25-038