Florida HBCU floored after record $238 million ‘gift’ from 30-year-old hemp mogul turns out to be worthless

But the money wasn’t coming from a wealthy captain of industry, a deep-pocketed philanthropist or even an alumnus. It wasn’t in the form of cash or publicly traded shares, but rather illiquid stock. 

The man behind the gift was Gregory Gerami, 30, who the school initially described as a “champion of sustainable agriculture and biodegradable hemp products in Texas.” He had no prior connection to Florida A&M and there was little public information to back his status as a multimillionaire able to write one of the largest philanthropic checks ever in higher education.  

Now, Florida A&M is contending with questions about lax internal controls. The university, which initially backed the authenticity of the gift, recently removed a press release about it from its website and decided to put it on hold amid rising doubts. The board of trustees will hold an emergency meeting Wednesday afternoon to discuss next steps. 

Gerami didn’t respond to multiple messages and phone calls. 

“I learned about the gift on the morning of the graduation, just as everybody else,” said Deveron Gibbons, vice chair of the university’s board. “If this in fact does not turn out to be what we hope it is, we probably could have headed this off by involving the board early.”

The school, also known as FAMU, declined to comment on the specifics of the donation, citing a nondisclosure agreement. 

“We are fully aware of the skepticism that sometimes comes with such a large gift,” the university said in a statement last week. “Please know that FAMU has done its due diligence.”

Gerami has also been tied to a $95 million pledge to Coastal Carolina University a few years ago, a deal that collapsed months after it was announced. CCU terminated that agreement, a university spokesperson said, without mentioning Gerami. The Myrtle Beach Sun News identified him as the donor.

HBCU Donations

FAMU is one of the top-ranked historically Black colleges and universities in the country. The school traces its roots to October 1887, when a predecessor institution was formed thanks to state legislation that a Black lawmaker pushed for. Alumni include former Atlanta Mayor Keisha Lance Bottoms and movie producer Will Packer.

Based in Tallahassee and serving about 10,000 students, FAMU is one of about 100 HBCUs, a group that includes Howard University and Spelman College. 

Spelman unveiled a $100 million gift from a trustee in January, and HBCUs have also won support in recent years from wealthy donors such as MacKenzie Scott and Blackstone Inc.’s Jon Gray. But many of the schools have been underfunded and major gifts remain rare. 

While the wealthiest Ivy League universities and flagship public schools boast investment portfolios in the tens of billions of dollars, the majority of HBCUs manage less than $100 million in assets, if they have any endowment at all, according to PGIM. 

“We are always working as hard as we can to make sure that there is a good donor base that we work with on a regular basis to help students get through their everyday lives and be successful,” Gibbons said. 

Endowment Boost 

Gerami’s $238 million gift would nearly triple FAMU’s endowment, in what would be an act of charity comparable to the $300 million Ken Griffin doled out to Harvard last year. But there’s reason to ask whether FAMU will ever see the money.

In its statement, FAMU said Gerami deposited shareholdings into the university’s account last month, without saying what backed up the valuation of the assets. The school said the gift came from Gerami and a family trust that has him as a trustee.

At a board meeting last week of the FAMU Foundation, which serves as a custodian of donations to the school, the stocks were described as private illiquid investments issued by Batterson Farms Corp., a closely-held hemp company Gerami created in 2021. 

Over the course of the roughly two-hour Zoom meeting, the university’s top brass acknowledged that it didn’t conduct an independent analysis of how much the shares were worth and cited the nondisclosure agreement in explaining why it hadn’t informed board members. FAMU President Larry Robinson then announced the gift was being put on pause.

Texas Business

Gerami describes himself as a self-made businessman, “the youngest African American producer and seed seller” in the Texas industrial hemp industry. In an online company bio, he said he entered foster care at just 10 days old with fetal alcohol syndrome and a diagnosis of cerebral palsy. 

A Texas producer’s license was issued for his hemp farming business, Batterson Farms, as of at least December 2023. The Texas Secretary of State’s website lists a small, single-story home in suburban San Antonio as the company’s address. 

Gerami says his company has offices in San Antonio and Van Horn, Texas, a town of 2,000 people about 120 miles east of El Paso. At an impromptu press conference FAMU put together last week, he declined to answer questions on his net worth or to provide specific figures for his business.

Gerami claimed Batterson Farms employs 7,000 workers, including contractors. A LinkedIn search shows him as the sole employee. The firm’s Instagram account advertises jewelry and teas. 

Last year, Batterson Farms promised to build the largest commercial hydroponic hemp warehouse site in West Texas, in the city of Muleshoe. The project “has not come to fruition,” said City Manager Ramon Sanchez. 

Tillery Timmons-Sims, a board member for the Texas Hemp Growers Association, said she isn’t familiar with Gerami’s business. She said the margins in the agriculture business are thin and the hemp industry is not known for creating major sources of wealth.

Chekesha Kidd, a board member at the FAMU Foundation, is advocating for broader reform. At the meeting last week, she argued in favor of revising the procedures involving gifts from major donors.

“We all believe and understand that there was positive intent here,” she said at the meeting. “But if that doesn’t signal that we need to take a step back and look at getting our own house in order, I don’t know what else does.”