Florida A&M Faces Scrutiny Over Questionable $237M Donation
Florida A&M University Under Investigation After Questionable $237 Million Gift Raises Red Flags.
Before Florida A&M announced a questionable $237 million donation, the university received a striking email from the donor’s bank, raising a red flag that the historic gift may not be legitimate.
Internal emails recently released by the university to The Sun News show that weeks before donor Gregory Gerami presented an oversized check at FAMU’s graduation ceremony, a Raymond James Financial Services executive told FAMU officials that previous assurances they provided of Gerami’s account balance were not accurate.
“On February 1 and March 1, 2024, Raymond James issued a letter to client, Gregory Gerami, reflecting the balance in his account,” Kirk Bell, a senior vice president at Raymond James, wrote on April 12. “Effective April 10th, 2024, Raymond James will no longer provide a value for the securities in Mr. Gerami’s account and no longer stand by the verification of deposit letter you may have received.
“To the extent that Mr. Gerami has or does provide you with official account statements from Raymond James, we do not believe the pricing of certain securities was accurate.”
The email does not list the dollar amounts they had represented were in the account of Gerami, a relatively unknown Texas hemp farmer whose donation would have been the largest ever to a historically Black college or university. The promised gift was quickly met with skepticism, particularly after The Sun News reported that Gerami was the anonymous donor whose $95 million to Coastal Carolina University quickly fell apart in 2020.
The situation has since cast a pall over FAMU with one high-ranking official resigning, the president publicly putting a “pause” on moving forward with the donation and the university’s board of trustees ordering an outside investigation.
Bell’s letter was emailed to Audrey Simmons-Smith, director of development for the FAMU Foundation, and Shawnta Friday-Stroud, the former executive director of the FAMU Foundation and vice president for university advancement who recently resigned from those positions in light of her role in accepting the controversial donation.
Simmons-Smith emailed Bell back, including FAMU President Larry Robinson on her email, to confirm receiving the letter and thanking him for an opportunity to discuss the matter. But it’s unclear if any further conversation took place.
The university has stopped answering questions about the donation due to the ongoing investigation, and Bell did not return a request for comment. Chelsea Peeler, a Raymond James branch operations coordinator included on several emails between FAMU officials and Gerami, declined to comment.
HOW DOES DONOR EXPLAIN RAYMOND JAMES’ LETTER?
Gerami told The Sun News Monday that he never received any “clarity” on why Raymond James sent that letter, and FAMU officials never asked him about it other than to tell him they received it.
Gerami said Raymond James held the private stocks in Batterson Farms Corp, the hydroponic hemp farming company he started in 2021, that he intended to donate to FAMU, and the letters he had the bank provide to the university in February and March were to verify the value of those stocks in his account at the time.
Gerami, via the Isaac Batterson Family 7th Trust, transferred 15 million shares of Batterson Farms Corp to the FAMU Foundation on April 15, emails show. The stock certificate listed the value at $15.85 per share, leading the university to present the gift as worth more than $237 million.
Gerami has told The Sun News he stands by that valuation, but admits it’s based on an internal report and no third-party valuation has been completed. That internal valuation is what Raymond James accepted to determine the value of stocks in his account, Gerami said.
Gerami provided The Sun News with a summary of his company’s internal valuation that just describes anticipated revenue based on current hemp farming contracts — without providing any proof the contracts exist — and total costs. The calculations value Batterson Farms Corp at more than $1.5 billion.
C. Zachary Meyers, a West Virginia-based certified valuation analyst who reviewed the report at The Sun News’ request, said it falls short of being a valuation or even a calculation of value.
“Even if a qualified person typed this up, there is no semblance of credibility because the end result is an assumed share price multiplied by the number of shares,” Meyers said. “There would be no level of assurance with the value being pontificated.”
Gerami told The Sun News he’s hired an independent valuation firm to provide a qualified appraisal of Batterson Farms.
While discussing the letter from Raymond James with The Sun News, Gerami revealed that Carta, the platform he used to transfer the stocks to the FAMU Foundation, also sent a letter stating that Batterson Farms Corp was no longer permitted on its platform. He declined to talk about that further, but said he didn’t believe it would impact the donation since the shares were already transferred.
Carta notified Gerami on May 14 it was terminating his contract for use of their software services “for misrepresentations in violation of the terms of service,” a Carta spokesperson confirmed.
WARNINGS AFTER DONATION ANNOUNCED
Other internal FAMU emails released to The Sun News show people who previously interacted with Gerami warning university officials after the May 4 announcement that the donation was unlikely to end well.
Erich Horner, a gift officer at North Carolina State University, emailed Friday-Stroud that he knew of five other schools, including University of Mississippi, that Gerami had made similar promises to, but “it always falls through.” Horner was working at Ole Miss when Gerami attempted to make a donation, he said.
“I believe him to be a fraud and I’m happy to discuss further,” Horner wrote, adding that he hopes he’s wrong.
Horner did not respond to a request for an interview.
In addition to Coastal Carolina University, The Sun News has previously identified Miles College, an HBCU in Alabama, and University of Texas at Austin as other schools where Gerami discussed donations that weren’t made.
Gerami has told The Sun News his team assessed possible donations to about 15 other colleges and universities before choosing FAMU.
He declined to discuss what happened at Ole Miss and didn’t want to address Horner’s claims.
“It says he believes (I’m a fraud), not that he’s sure,” Gerami said. “Until he knows, until you can prove it, that’s all speculation.”
Ron Overton, the president of an Arlington, Texas church, emailed FAMU President Larry Robinson multiple times, saying he’s known Gerami since he was a child and claiming that Gerami’s “life is one complete fabricated lie.”
Overton admits in the email that he hasn’t spoken to Gerami in at least three years, but he has no reservations in stating that he “likely has very little money to his name, much less $237M to donate to any one.”
He was aware of Gerami’s interactions with CCU back in 2019 and tried to warn them before they made their announcement, but he was ignored, Overton wrote.
“FAMU got bamboozled big time; admit it and move on,” he said.
Overton did not respond to a request for an interview.
Gerami said he and his family attended church with Overton, and he briefly attended Overton’s church, but he’s not as close to him as Overton describes in his emails. He described the pastor as someone who likes to insert himself into situations he knows nothing about.
FAMU’s investigation into the donation is set to be completed by Aug. 30, according to the professional services agreement included within the emails. The board hired law firm Buchanon, Ingersoll and Rooney to conduct the investigation at a cost not to exceed $52,000. The Florida Board of Governors is providing oversight of the investigation.
Gerami told The Sun News Monday he hasn’t been contacted as part of the investigation, but he’ll answer questions if he is contacted.
