Norman Gray, the founder and CEO of a biomedical company, has been sentenced to 10 years in prison for defrauding investors out of more than $13 million. The sentencing was announced by Matthew Podolsky, Acting United States Attorney for the Southern District of New York, after Gray's conviction for wire fraud in May 2024.
Podolsky stated, "Norman Gray preyed upon people who wanted to invest in developing life-saving medicine for children with a rare and generally fatal disease." He added that Gray deceived his victims by lying about his educational background and supposed financial resources, even fabricating patent applications and forging FBI background checks.
Gray presented himself as a billionaire scientist with a Ph.D. from MIT, claiming to fund his company using profits from a previous successful business venture. However, investigations revealed these claims were false; Gray did not possess such qualifications or funds. Both he and his company were significantly in debt by 2020.
Starting in 2016, Gray misled investors into believing that a medication developed by his company was approved for compassionate treatment in Saudi Arabia. This led Victim-2 to invest $7.6 million between 2018 and 2020 based on false assurances about ongoing projects and potential sales deals involving personal protective equipment (PPE). Ultimately, the PPE could not be sold due to defects.
In August 2020, Victim-1 invested $250,000 under false pretenses related to the Biomedical Company but later found out that the funds were used to repay unrelated debts. Further deception involved promises of high returns on investments in PPE deals that did not exist.
Gray also fabricated a mortgage company to further deceive Victim-1 regarding potential investments. When Gray's fraudulent activities began unraveling in November 2020, he promised restitution but never followed through.
Victim-2 continued providing financial support even after being made aware of allegations against Gray due to reassurances backed by falsified documents produced by Gray himself.
In addition to the prison sentence, U.S. District Judge Paul A. Engelmayer ordered Gray to pay forfeiture amounting to $1,467,000 along with restitution payments totaling $1,533,675 specifically directed towards Victim-1.
Acting U.S. Attorney Podolsky praised Homeland Security Investigations' special agents for their work on this case while acknowledging assistance from various law enforcement bodies including those from New Haven Police Department as well as international authorities from Spain and the United Kingdom.
The prosecution is managed by Assistant U.S. Attorneys Benjamin A. Gianforti, Vladislav Vainberg, and Jessica Greenwood under the Office’s Illicit Finance and Money Laundering Unit.
