Dive Brief:
- A damning 176-page independent investigative report into a questionable $238 million gift to Florida Agricultural and Mechanical University concluded that the donation was fraudulent.
- Florida A&M officials announced the gift — from Gregory Gerami, a Texas hemp farmer — during the historically Black college’s May 4 commencement ceremony. Although the donation was initially met with praise, questions quickly arose about the gift’s legitimacy and Gerami’s background.
- Before the announcement, Gerami provided the only valuation of the gift — purportedly millions of dollars worth of privately held stocks in his company, Batterson Farms Corp. Confirming doubts about the gift’s value, the investigation released this week concluded that Gerami’s valuation was “baseless.”
Dive Insight:
Growing scrutiny over the deal’s legitimacy caused Florida A&M’s board of trustees to launch an investigation into the deal the same month it was announced. The probe came after then-president Larry Robinson said the university was pausing the gift.
The public university’s top leaders faced steep fallout. Amid accusations that the institution had botched the vetting process, Shawnta Friday-Stroud stepped down as vice president for university advancement and executive director of the FAMU Foundation in May. Robinson ultimately resigned as president last month.
The Aug. 5 report from law firm Buchanan Ingersoll & Roone adds fuel to the criticisms. The firm contended that Florida A&M could have largely avoided the fallout if officials had conducted due diligence last year when Gerami first reached out about making a donation.
“The evidence collected in this investigation supports the conclusion that senior leadership at the University were deceived by, and allowed themselves to be deceived by, the Donor,” the report stated. “Neither Batterson Farms Corporation nor any of its affiliated companies had the resources available to meet the promises made in the Gift Agreement.”
The report made several recommendations, including that Florida A&M notify Gerami that the donation was never legally executed. It also flagged issues with Friday-Stroud serving in two roles, recommending that they be broken up into separate positions and for due diligence be included in those job descriptions. And it recommended that the university get an independent audit conducted into noncash gifts before accepting them.
Gerami did not respond to emailed requests for comment sent to Batterson Farms Corp. University officials also did not respond to requests for comment.
The report cast further doubt on whether Gerami’s businesses were legitimate.
“His ventures have been significantly tainted by reports of fraudulent and manipulative tactics, and a web of deceit that entrapped investors and associates,” the report said.
The law firm’s report details Gerami’s attempts to secure investors for a new company, BadaBing, which he pitched as an online store, including for clothes and accessories. As part of a “fraudulent scheme,” the report said, Gerami claimed he maintained strong relationships with colleges that would provide the company with access to their extensive email lists for marketing purposes.
“However, as the launch date neared, it became apparent to his associates that Mr. Gerami neither had relationships with these universities nor access to their email lists,” the report stated.
Moreover, Gerami was behind a collapsed $95 million gift promised to Coastal Carolina University in 2020. In 2023, The Sun News reported that the donation fell through after Gerami’s relationship with university officials soured.
In Florida A&M’s case, the law firm noted officials had multiple opportunities to conduct due diligence or raise concerns about the veracity of the gift.
Robinson and Friday-Stroud were both directly involved in overseeing the gift, creating an environment where staff “felt pressured not to ask questions” and “to assume that proper due diligence had been performed,” it stated.
Neither Robinson nor Friday-Stroud, who both retain faculty positions at Florida A&M, responded to emailed requests for comment. The university announced in July that Robinson planned to go on a yearlong sabbatical after leaving the presidency.
The report also pointed out that Keith Miles, the university’s communications director, conducted “substantial research” into Gerami’s background to help him write a speech for the commencement ceremony — a process that unearthed derogatory information.
“Mr. Miles chose to ignore these concerns and did not report them to anyone else, assuming others were in charge of vetting the donor and gift,” the law firm said. Yet Miles wasn’t alone, the report said, noting it was clear “everyone assumed someone else had already performed the necessary due diligence.”
Miles did not respond to an emailed request for comment.
Friday-Stroud’s multiple roles didn’t help, according to the report.
As both the vice president for university advancement and executive director of the institution’s foundation, Florida A&M was left without a “proper chain of command for individuals to raise concerns or seek financial advice without appearing to undermine her authority.”
In what was described as a “critical oversight” and a “significant lapse in due diligence,” the report also criticized officials for not getting an independent valuation of the gifted stock and instead relying solely on Gerami’s claims.
The law firm contended that officials failed to make the governing boards of both the university and the foundation aware of key information about the donation. This lack of information prevented both boards from fulfilling their fiduciary duties, the report said.
#238M #gift #promised #Florida #deemed #fraudulent
