An investigation into Florida A&M University's historic $237 million donation announced earlier this year determined the gift to be fraudulent.
The scathing 68-page report, published on FAMU's website, painted the purported donor as a con artist seeking to gain credibility by associating with reputable institutions to enrich himself. University leaders, overly eager to secure a transformational gift, flouted basic due diligence protocols and ignored numerous red flags, the report concludes.
News reports were initially positive after Gregory Gerami, the CEO of a Texas hemp farming company, showed up in May as FAMU's commencement speaker and presented the giant check representing what would've been the largest donation ever to a historically Black college or university.
Gerami proclaimed that "the money is in the bank," but it was soon revealed that the $237 million represented the perceived value of private shares of his hemp company he'd transferred to the FAMU Foundation.
Public skepticism grew, particularly after others found The Sun News had identified Gerami as the anonymous donor to Coastal Carolina University whose $95 million gift collapsed in 2020. University officials assured the public it had done its due diligence on Gerami, but the investigation determined FAMU didn't conduct formal due diligence on him until days after the announcement.
That digging into Gerami's background and company demonstrated no evidence he had the financial capacity to fund the major gift, the report states.
Investigators also determined the stocks in Gerami's company, Batterson Farms Corp, were never legally transferred to the FAMU Foundation.
While a foundation employee signed in April to accept the transfer of 15 million shares of the company through Carta, an online private equity management platform, Gerami didn't have an account that allowed him to make private equity transfers, according to the report. Instead, he modified his company's ownership on Carta to identify the FAMU Foundation as owning those shares.
That action led Carta to terminate Gerami's access to their services for violating their terms and conditions, and this effectively canceled the shares issued to FAMU, the report states.
While Gerami recently informed FAMU officials he was pulling the donation, investigators determined the university hasn't had any ownership interest in Batterson Farms Corp since May 14, when Carta invalidated the transfer. The gift agreement was also nullified because Gerami and FAMU leaders initially signed an incorrect, earlier version of the agreement, then only Gerami signed the correct one, the report states.
Gerami's actions may have violated certain federal and state laws, investigators allege, pointing to federal laws governing security transfers and tax fraud, and Florida investor protection statutes.
The report does not expand on how Gerami may have violated these laws, and Gerami has never been arrested for violating any financial regulations.
Investigators' research into Gerami's business background found a sketchy history full of sensational claims and minimal proof of actual success.
"Mr. Gerami's entry into the business world was marked by grand ambition," the report states. "However, his ventures have been significantly tainted by reports of fraudulent activities, manipulative tactics, and a web of deceit the entrapped investors and associates."
The report's conclusions about Gerami rely largely on publicly available business records and testimonial evidence from an unnamed former associate of Batterson Farms Corp.
Gerami makes false promises and provides elaborate unsubstantiated financial projections to secure investments, the report states.
Gerami told investigators his primary motivation for making large donations to universities was to obtain tax deductions, but the report concludes his actual motive to be personal financial gain.
He's seeking credibility and goodwill by associating with reputable institutions, the report states, and donating stocks instead of cash suggest a plan to manipulate his company's perceived value and create an artificial market for its shares.
The report also detailed numerous oversights by FAMU officials during its interactions with Gerami. Investigators were particularly critical of former President Larry Robinson and former Vice President for University Advancement and FAMU Foundation director Shawnta Friday-Stroud, who oversaw much of the process.
Both have since resigned from their positions, though Friday-Stroud remains the Tallahassee school's business school dean, and Robinson will return as a distinguished professor after a one-year sabbatical.
The leaders' oversight and determination "not to mess this up," as Robinson repeatedly told staff members, hindered any employees from questioning the gift's legitimacy, investigators found.
Notably, after receiving a letter from Raymond James Financial Services rescinding previous assurances about Gerami's account balance, university officials accepted Gerami's assertion "without further scrutiny" that the banking institution sent the letter out of racist intent because they didn't want that much money going to an HBCU, according to the report.
Gerami previously claimed racism against certain CCU officials shortly before that university terminated its relationship with him, according to previous Sun News reporting.
Robinson and Friday-Stroud favored secrecy surrounding the major gift, even keeping any information about it from their foundation board and board of trustees until it was publicly announced, likely in violation of university protocols, investigators found.
Instead of nearly doubling FAMU's endowment as promised, Gerami's gift ended up costing the university in the loss of high-level personnel, reputational damage and financial costs totaling at least $14,000, the report concludes. That cost includes money spent on Gerami's visit to campus for the week leading up to graduation, but it doesn't account labor hours spent soliciting the donation, nor does it account for the cost of the investigation, which the FAMU board agreed to pay up to $52,000 to conduct.
The board is scheduled to discuss the report Thursday during its retreat meeting publicly.