Affidavit reveals details in fraud case

A federal affidavit has revealed further details on how a Hamden-based CEO, and former Quinnipiac University professor, allegedly scammed an investor into giving him over $1 million for fictitious investment opportunities.

Norman Gray, 66, the CEO of a Hamden-based biomedical company, was arrested Tuesday morning and charged with wire fraud.

In 2015, Gray was also named the Carlton Highsmith Chair of Innovation and Entrepreneurship at Quinnipiac University, according to the university’s business school. There, he taught undergraduate entrepreneurship and engineering students. He left the university in 2018, university officials said, declining to comment further.

According to the affidavit, the scheme began in August 2020, when Gray began talking to the victim over WhatsApp and email about potentially investing in his biomedical company.

The victim eventually agreed to invest $250,000 in exchange for an approximately 2 percent equity stake in the company, as well as a salaried position as the company’s “Chief Investment Officer.”

Gray instructed the victim to wire the money to a bank account with the name Sherman 695 LLC, in which Gray was the sole signatory.

On approximately Sept. 10, 2020, the victim initiated this wire transfer from New York City to the Sherman 695 account in Connecticut, according to the affidavit.

That same day, $16,000 was transferred from the Sherman 695 account into an account held in the name of the biomedical company. The next day, a $225,000 check was made out of the Sherman 695 account into a bank account unaffiliated with the biomedical company.

Shortly after that, Gray contacted the victim again to inform her of a “friends and family” investment deal in which the “risk (was) virtually zero,” according to the affidavit. He said the investiment involved personal protective equipment, and that the victim could expect a 40 percent return within 90 days because two nearby universities had placed purchase orders for the equipment. None of this was true.

It is unclear which two universities were involved, but neither have any records of any protective equipment purchase orders involving Gray or the biomedical company.

The victim initially declined the offer, telling Gray that she needed cash to afford a mortgage because she was looking to buy a house. Gray then offered a line of credit against the equipment investment for one of the universities, and proposed providing a bridge loan for the investment

amount until the victim’s mortgage closed. The victim then agreed.

On approximately Sept. 25, 2020, the victim transferred $500,000 from the New York City account to the Sherman 695 account in Connecticut, according to the affidavit.

That same day, $50,000 was wired from the Sherman 695 account to the account of a luxury car dealership in North Haven for the purchase of a vehicle.

On approximately Sept. 28, 2020, a $160,000 cashiers check was made out to the biomedical company from the Sherman 695 account. That money was then spent on the biomedical company’s operating expenses, including payroll.

In early October 2020, Gray told the victim he could secure a mortgage for the victims home through a mortgage company called the “Tranctus Group” he was an investor in. On approximately Oct. 15, 2020, the victim initiated a wire transfer of $717,000 from New York City to the Sherman 695 account. The next day, a $200,000 check was made out from the Sherman 695 account to the biomedical company account.

On Oct. 19, 2020, the victim received a purported mortgage approval letter from someone from the Tranctus Group, but was instead a fake persona and company created by Gray, according to the affidavit.

The victim never received any return for her investment, and Gray refused to return the money.

Wire fraud carries a maximum potential prison sentence of 20 years, the U.S. Attorney’s office said.