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NEW YORK (AP) \u2014 It would have been the largest-ever private gift to a historically Black college or university: $237 million \u2014 far beyond the recipient\u2019s endowment. The money was promised by a 30-year-old who had recounted his rise from a childhood in foster care to becoming, as he put it, Texas\u2019 \u201cyoungest African American industrial hemp producer.\u201d<\/p>\n
And so, the first weekend of May,\u00a0Florida A&M University<\/a>\u00a0celebrated Gregory Gerami\u2019s extraordinary contribution with all the necessary pomp. He spoke at commencement. Regalia-clad administrators posed with a jumbo check. Gerami even assured the audience that \u201cthe money is in the bank.\u201d<\/p>\n It wasn\u2019t, and it may never be.<\/p>\n Following public backlash over its apparent failure to properly vet Gerami and the donation, FAMU said the gift is\u00a0now on pause<\/a>\u00a0\u2014 dashing expectations of increased financial stability for the 137-year-old institution and its 9,000 students. Gerami maintains everything will ultimately work out, but other small universities he approached with proposals for major donations never got any money.<\/p>\n Gerami contacted Florida A&M\u2019s development office about a donation last fall, according to Shawnta Friday-Stroud, then-vice president for university advancement. University officials, including President Larry Robinson and Athletic Director Tiffani-Dawn Sykes, began meeting with him virtually shortly thereafter.<\/p>\n In January, Atlanta\u2019s\u00a0Spelman College publicized a $100 million gift<\/a>\u00a0\u2014 then considered the single largest donation to any HBCU. FAMU officials say Gerami wanted to surpass that figure. They ultimately agreed it would come through 14 million shares in his fledgling industrial hemp company.<\/p>\n However, the value of the company \u2014 and those shares \u2014 remains unclear.<\/p>\n Gerami founded Batterson Farms Corp in 2021 with aspirations of becoming a leading hemp plastics producer. While Texas Department of Agriculture records confirm the company is licensed to grow hemp, little else suggests that\u2019s happening.<\/p>\n The company\u2019s website is sparse. Affiliate links to purchase HempWood products were broken and the shopping cart payment function failed when an Associated Press reporter visited the site in late May and early June. A confusing message to investors also warned of late fees for failing to complete monthly payments on time.<\/p>\n Kimberly Sue Abbott, a founding board member who told the AP that she was incorrectly listed as co-CEO, cast doubt on Gerami\u2019s self-reported value of the shares and said Batterson Farms \u201cis not farming any hemp anywhere that I\u2019m aware of.\u201d<\/p>\n She and Gerami met around 2013 during her time on the Birmingham City Council in Alabama. She felt he needed guidance on how to \u201cdo something good with his money.\u201d He has since invited her to partake in various ventures \u2014 none of which lasted, she said.<\/p>\n \u201cHe never holds to a schedule. The information that he has is always flawed somehow. Technicalities are always an issue,\u201d she said.<\/p>\n Greg Wilson, HempWood\u2019s founder, confirmed that Gerami is a customer but said he doesn\u2019t buy much.\u00a0High interest rates<\/a>\u00a0have dampened both home sales and\u00a0interest in remodeling<\/a>\u00a0with products like his, Wilson said, making it a bad time for wood-alternative businesses.<\/p>\n Gerami described Abbott\u2019s characterizations as \u201cinaccurate\u201d and outdated. Without answering whether or not Batterson Farms is growing hemp, he said his company acts as an intermediary between farmers and consumers. He refused to provide specifics about the company\u2019s contracts, revenue and staffing.<\/p>\n He also claimed that a third-party developer created the company\u2019s website, which he said was never intended to be a place where people could directly buy flooring.<\/p>\n Florida A&M officials have shared little about their knowledge of Gerami or their vetting process.<\/p>\n Friday-Stroud told FAMU Foundation board members last month that an \u201cexpansive screening\u201d into Gerami\u2019s background produced the same information that ended up \u201con social media,\u201d apparently referencing online upset over his previous reported donation attempts and his company\u2019s obscurity.<\/p>\n Still, she said, they moved forward after looping in Robinson. Friday-Stroud signed a nondisclosure agreement on behalf of the foundation board on April 26 at Gerami\u2019s request, according to a\u00a0copy obtained by AP<\/a>.<\/p>\n They also announced the donation while awaiting a still outstanding independent appraisal of the private stock\u2019s worth, which Gerami said he assessed based on existing but undisclosed sales contracts.<\/p>\n Officials have acknowledged that the appraisal could return with a much lower valuation.<\/p>\n Stock donations and NDAs are not abnormal for university advancement offices. However, according to some higher education fundraisers, such donations usually come from wealthy shareholders of reputable public companies and NDAs should include the entire foundation board.<\/p>\n \u201cYou want to make certain those resources are available, always, before you make the announcement,\u201d said W. Anthony Neal, a longtime HBCU fundraiser who dealt with Gerami in the past. \u201cBecause you don\u2019t want to come back with egg on your face.\u201d<\/p>\n Companies typically get what\u2019s known as a 409A valuation from an independent third party before gifting shares, said Bob Musumeci, an Indiana University business professor with a background in corporate finance.<\/p>\n Equity ownership, employee numbers, financial projects and other details all factor into the assessment. Outside investments from things like a family trust can also boost a company\u2019s worth beyond what sales numbers \u2014 and public data, if available \u2014 might suggest.<\/p>\n Gerami didn\u2019t break any laws by flouting that norm, Musumeci said, but the fact that the gift wasn\u2019t properly assessed before being publicized is questionable.<\/p>\n \u201cI would certainly be cautiously pessimistic about it. But I can\u2019t say whether it is or it isn\u2019t,\u201d he said of the valuation\u2019s accuracy.<\/p>\n Both FAMU and Gerami have said the transfer of the stock certificates between their respective accounts took place in April.<\/p>\n A spokesperson for Carta, the equity management company they say completed the exchange, would only confirm that the platform notified Gerami on May 14 that his contract was terminated over \u201cmisrepresentations\u201d he\u2019d made. They declined to comment on FAMU\u2019s assertion that it had an account with Carta and Gerami\u2019s claim that the company sent documentation confirming the transfer.<\/p>\n Florida A&M is not the first school to receive a pitch from Gerami.<\/p>\n Neal, the HBCU fundraiser, was overseeing a $3.4 million fundraising campaign in 2023 for the 150th anniversary of Wiley University in Marshall, Texas, when Gerami reached out. They discussed funding for new campus facilities in the $1 million to $2 million range, Neal said, and he began the \u201cnormal vetting process\u201d as the senior vice president of institutional advancement at the time.<\/p>\n But not a lot of information surfaced. After at least seven conversations, Neal sought a one-on-one meeting to verify Gerami\u2019s legitimacy in person. Communications subsequently dropped off.<\/p>\n \u201cSometimes donors just pull out,\u201d Neal said. \u201cDoesn\u2019t mean anything bad.\u201d<\/p>\n However, three years prior, Coastal Carolina University also withdrew from a $95 million contribution made by an anonymous donor because he had \u201cnot fulfilled an early expectation of the arrangement,\u201d according to a press release.<\/p>\n While CCU declined to name the anonymous donor in an email to AP, Gerami was identified as the benefactor last spring by\u00a0The Sun News in Myrtle Beach, South Carolina<\/a>.<\/p>\n Gerami told AP that he \u201cconsidered\u201d as many as 15 colleges and universities in recent years as part of a strategy to establish research partnerships that he said would make his company eligible for grants. Though Gerami did not disclose the names of those schools, those documented are all small institutions with scant endowments. He said he eyed institutions that needed funding and had the capacity for hydroponics, a method of growing plants without soil.<\/p>\n The fallout at FAMU is palpable.<\/p>\n The school ended its engagement with Gerami. Friday-Stroud resigned. University trustees \u2014 surprised they were left in the dark throughout the six-month process \u2014 approved a third-party investigation that state officials\u00a0have joined<\/a>.<\/p>\n Speaking May 15 before the trustees, Robinson described the announcement of Gerami\u2019s gift as \u201cpremature at best.\u201d<\/p>\n \u201cI saw in this unprecedented gift the potential to serve our students and our athletic programs in ways unimaginable at that time,\u201d Robinson said. \u201cI wanted it to be real and ignored the warning signs along the way.\u201d<\/p>\n Days after announcing the donation, Robinson withdrew a $15 million request to a local economic development board to enhance FAMU\u2019s football stadium, according to\u00a0records obtained by AP<\/a>.<\/p>\n While he did not give a reason and the university declined to comment, the\u00a0gift agreement<\/a>\u00a0shows a one-time $24 million allocation of Gerami\u2019s donation for athletics facilities.<\/p>\n Millions annually were also supposed to fund scholarships, the nursing school and a student business incubator over the next decade.<\/p>\n The public embarrassment has worried some HBCU supporters, who hope the outsize negative attention won\u2019t dampen an otherwise resurgent fundraising atmosphere.<\/p>\n \u201cAs somebody that wants HBCUs to always succeed, this is really heartbreaking because there was so much excitement,\u201d said Marybeth Gasman, an education researcher at Rutgers University and three-time HBCU board member. \u201cJust real, real excitement for just a transformative gift of this magnitude.\u201d<\/p>\n There was a time when HBCUs might have had to gamble on an unknown miracle donor, but Gasman said that\u2019s less common now. Long\u00a0overlooked by foundations<\/a>\u00a0and\u00a0underfunded by some states<\/a>, the schools have courted and gained\u00a0newfound corporate interest<\/a>\u00a0in recent years.<\/p>\n Still, public funding disparities persist. Historically Black land-grant universities in 16 states missed out on $12.6 billion over the past three decades \u2014 including $1.9 billion that should have gone to FAMU \u2014 according to a 2023 Biden administration analysis.<\/p>\n For his part, Gerami believes the questions over his donation are unnecessary \u201cwhack-a-mole.\u201d He admitted the sum of his donation was his own estimate, but said he expects an independent valuation will confirm the shares\u2019 worth within the month. He said he also believes FAMU will accept the gift once its independent probe is complete.<\/p>\n \u201cUntil a third-party valuation is done, this is all speculation,\u201d Gerami said.<\/p>\n \u201cWe want to tread very carefully because we do not want to play games that lead to speculation without actual, factual information,\u201d he added.<\/p>\n<\/div>\nAn eye-popping gift from an obscure company<\/h4>\n
NDAs, \u2018misrepresentations\u2019 and a lack of due diligence?<\/h4>\n
Small schools with small endowments<\/h4>\n
A transformative gift gone sideways<\/h4>\n