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December 6, 2021

Hamden biotech CEO accused of swindling over $1.4M from investor

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The CEO of Hamden-based company Vanessa Biotech faces one count of wire fraud for allegedly stealing more than $1.4 million from an investor.

The U.S. Attorney’s Office for the Southern District of New York last week announced the arrest of Norman Gray, 66, of Hamden.

If convicted on the wire fraud count, Gray could face up to 20 years in prison.

Federal prosecutors claim Gray induced a female victim into wiring him funds through false promises that the money would be put towards an equity stake in the company and purported investment deals involving the sale of personal protective equipment, or PPE. 

Prosecutors allege funds were instead diverted to general company operating expenses and for Gray’s personal use, including purchase of a luxury vehicle, court documents show.

Gray entered a "not guilty" plea when he appeared on Nov. 30 before U.S. Magistrate Judge Debra Freeman, and his case was continued to Dec. 14.

The judge allowed Gray to be released on a $250,000 personal recognizance bond, secured by $50,000 cash and property. He had to surrender his passport and submit to electronic monitoring. He was also ordered not to “participate in any capital raises with his company, Vanessa Biotech,” court records show.

New Haven Biz reached out to Vanessa Biotech following the arrest, and was told the company, which is developing treatments for ailments such as diarrhea, would not be commenting at this time. 

The company’s U.S. headquarters is at 925 Sherman Ave., Hamden, and it also has locations in Hungary, Spain, and at UConn’s Technology Incubation Program in Farmington, according to its website.

Attorney Megan Elizabeth Wall-Wolff of New York, who is representing Gray, did not immediately respond to a request for comment.

According to court documents, Gray began talking to the alleged victim about becoming an investor in the biomedical company in August 2020. 

The unidentified woman initially gave $250,000, but prosecutors claim this money was paid out to an unaffiliated company, and she never obtained the equity she was expecting.

Gray subsequently solicited $1.2 million from the woman by representing that he would invest that money in deals involving the procurement of PPE for two universities. Gray allegedly represented that the necessary contracts for those deals were in place, when actually they didn’t exist, prosecutors claim.

Instead, Gray allegedly used most of the woman’s money on his company’s general operating expenses, and for the cash purchase of an approximately $50,000 luxury SUV, court documents show.

During Gray’s interaction with the alleged victim, who was pursuing purchasing a home, Gray reportedly claimed that the “Tranctus Group” was a boutique mortgage company of which he was the sole investor. Gray directed the woman to his mortgage broker, “Benjamin Mabry.”  

Prosecutors claim Mabry didn’t exist and was actually a false persona he invented. They allege he registered the internet domain associated with the “Tranctus Group” the same day the woman received a purported mortgage commitment letter from “Mabry.”

According to the government, the woman ultimately received no return on any of her investments. She never received any written confirmation, and the biomedical company informed her it had no record of any investment. 

Gray refused to return her money, and the purported “Tranctus Group” mortgage never materialized, the government alleges in court documents. Prosecutors claim she ultimately lost in the vicinity of $1.47 million.

Ricky J. Patel, the acting special agent-in-charge of the New York Field Office of the Department of Homeland Security, which was involved in investigating the case, said in an announcement,  “As alleged in the indictment, Norman Gray made fake promises and created a fictitious persona to dupe an investor for over a million dollars in real cash, but in the end, Gray’s dishonest imagination led him right into the hands of law enforcement.”

Contact Michelle Tuccitto Sullo at msullo@newhavenbiz.com.

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