Florida A&M University recently experienced a major setback after a record multi-million dollar gift from entrepreneur Gregory Gerami was determined to be fraudulent. The donation of over $237 million was invalidated due to procedural missteps, including improper transfer of stock shares and failure to vet the contribution. Gerami’s donation was meant to support scholarships, athletics facilities, the nursing school, and a student business incubator, but will not be realized. The university faces reputational damage and halted contributions from previous donors as a result of this incident.
An independent investigation found that Gerami’s self-valuation of his hemp company, Batterson Farms Corp, was baseless and misleading. The university failed to conduct proper due diligence when accepting the donation, which led to significant financial losses and damaged relationships with other donors. The report highlighted several warning signs that were ignored by administrators, including revoked asset verification by a financial services company and derogatory information discovered by a communications director. The university’s pursuit of the transformative gift blinded them to the risks involved with private stock donations.
Gerami defended himself by stating that he obtained a third-party valuation of his company after the controversy arose. However, he provided limited documentation to support his claims, raising further doubts about the legitimacy of the gift. The investigation concluded that Gerami deceived the university’s senior leadership and ultimately could not fulfill the promises made in the gift agreement. This incident has led to the resignation of the university president and raised questions about the future of fundraising efforts at Florida A&M University.
The fallout from this fraudulent donation has had a significant impact on the university’s finances and reputation. Millions of dollars intended for various programs and facilities will not be realized, leaving students and staff disappointed and uncertain about the future. The report criticized the university’s administrators for their overzealous pursuit of the gift and failure to properly vet the donor. Moving forward, the university must rebuild trust with donors and stakeholders while implementing stronger protocols for accepting large donations.
The investigation also uncovered a lack of oversight and accountability within the university’s administration, highlighting the need for improved governance and transparency in fundraising practices. The incident serves as a cautionary tale for other institutions seeking major donations, emphasizing the importance of thorough due diligence and verification processes. Despite the setback, Florida A&M University remains committed to its mission of providing quality education and support to its students, and will learn from this experience to ensure similar mistakes are not repeated in the future.
