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  • Writer's pictureDonald V. Watkins

Amateurish NDA Should Have Alerted Florida A&M Officials that $237 Million “Gift” was a Scam

By: Donald V. Watkins

Copyrighted and Published on May 18, 2024

IMAGE: Gregory Gerami (center) signs $237 million "Gifting Agreement" for Batterson Farms Corp., as FAMU President Larry Robinson (right) looks on.

An Editorial Opinion


It takes five minutes to read the amateurish April 26, 2024, non-disclosure agreement (NDA) that Gregory Gerami used in connection with his "gift" of $237 million in shares of Batterson Farms Corp. stock to the Florida A&M University Foundation. The "gift" was announced with much fanfare at FAMU's May 4, 2024, Commencement.


The NDA was publicly released yesterday.  [Click here to read the full NDA].

 

The First Red Flag


The first red flag concerning the NDA is found on the second line of the first paragraph.  There is no full physical address listed in the NDA for Gregory Gerami or Batterson Farms, which are referenced as the “Disclosing Party.”  There is a full street and city address listed for the Foundation, which is referenced as the “Receiving Party.”

 

Section 8 of the NDA imposes mandatory obligations on the Foundation to “notify the Disclosing Party immediately upon discovery of, or suspicion of, (1) any unauthorized use or disclosure of Confidential Information by Receiving Party or its Representatives; or (2) any actions by Receiving Party or its Representatives inconsistent with their respective obligations under this Agreement.” 


How would Foundation officials “notify” the donor of a Section 8 breach of the Agreement when the NDA, itself, provides no full address for doing so? If emailing was an acceptable way to notifiy the donor of a breach of the NDA it would have been stated as such in the NDA.


The Second Red Flag

 

The second and most glaring red flag is found in the last sentence of the NDA’s second paragraph.  This sentence states: “The Parties are aware that the Receiving Party is a Direct Support organization, as set forth in Section 1004.28, Florida Statutes, and is bound by the requirements of confidentiality set forth in Section 1004.28 (5) Florida Statutes.”

 

Here is Section 1004.28(5) of the Florida Statutes. Subsection 5(a) is what matters:

As specified in Subsection (5)(a), donor anonymity (when requested) is limited to the non-disclosure of the donor's "identity" in FAMU's publicly available annual audit reports. Nothing in the statute prohibited any Foundation official from discussing Batterson Farms' “gift” with the Foundation's board of directors or the FAMU’s board of trustees at any time.

 

Furthermore, Section 1(b) of the NDA expressly authorized the Foundation to disclose information that is “required to be disclosed by law or regulation.”  


As the “Receiving Party” and a public charity, the Foundation had a legal duty to issue Batterson Farms Corp. a fully competed and properly signed IRS Form 8283 for its $237 million “gift.”  The Form 8283 for Batterson Farms' publicly annnounced "gift" is information that would normally be reported on the Foundations IRS Form 990 for Tax Year 2024. All Form 990s are public records.

 

Based upon the plain language of the NDA, information about Batterson Farms’ act of "gifting" $237 million shares of stock in the company to the Foundation never fell into any zone of confidential information.  It could and should have been shared with the Foundation’s board of directors and FAMU’s board of trustees, from conception to completion. This did not happen.


The Third Red Flag

 

The NDA has numerous typographical errors.  This is the third red flag.


It is obvious that a layperson prepared the NDA using a legal documents template from an Internet site like LegalZoom.com, or RocketLawyer.com, or ChatGPT for Legal Documents. It also appears that no qualified and capable attorney for the Foundation or FAMU board of trustees reviewed the NDA before it was signed by the Foundation's Executive Director -- who resigned this past week. 


For all practical purposes, Gerami's purported NDA is a worthless piece of paper.


Epilogue

 

By law, the Foundation's board of directors is the corporate body for this charitable entity.  Likewise, FAMU's board of trustees is the corporate body for the University.  


Any NDA that purports to restrict or exclude the members of these two FAMU-related governing boards from obtaining prior knowledge of, or information about, a “gift” to the Foundation lacks validity and is NOT binding or enforceable.

 

Finally, the $237 million Batterson Farms “gift” was an interstate scam (in process).  FAMU and the Foundation should immediately report this scam to federal law enforcement officials in Tallahassee for investigation and prosecution, if warranted.

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Donald V. Watkins
Donald V. Watkins
6月04日

A valid gift to FAMU would be accompanied by a completed IRS Form 8283 that is signed by a certified appraiser of the property gifted and backed up by financial data supporting the donor's appraisal. Here is an example of the proper sequence for donating a non-cash gift to a land-grant university:


FAMU failed to follow these basic gifting protocols in connection with Gregory Gerami's $237 million "gift" of stock in Batterson Farms Corp. to the FAMU Foundation for the benefit of FAMU. This is why the Florida Board of Governors has taken over the investigation into this apparent tax fraud scheme.

いいね!

Donald V. Watkins
Donald V. Watkins
5月20日

I hope that no lawyer for FAMU reviewed the NDA before it was signed. A first year law student could read this document and tell that it was defective and unenforceable. If a FAMU lawyer reviewed the NDA before it was signed, we have a problem much bigger than Gregory Gerami and his worthless stock.

いいね!
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