Gregory W. Gray Jr. Sentenced in $5M Ponzi Scheme

Gregory W. Gray, Jr., 41, is going to federal prison for running a multimillion-dollar Ponzi scheme out of his Manhattan venture capital firm, Archipel Capital, LLC. The Senior Managing Director was sentenced to two years behind bars for securities fraud and perjury, admitting he lied to investors and the SEC while stealing $5 million to cover his financial mismanagement.

Gray, who pleaded guilty on December 23, 2015, stood before U.S. District Judge Sidney H. Stein today to face the consequences of his deception. From April 2014 to February 2015, Gray orchestrated a fraudulent shell game, convincing investors they were buying pre-IPO Twitter stock. In reality, he raised over $5.2 million from 52 investors across four Social Media Funds, promised more than 200,000 shares, and delivered only 80,000—costing investors millions in unfulfilled equity.

When Twitter went public on November 6, 2013, Gray’s lies began to collapse. With the Social Media Funds gutted by unauthorized withdrawals and commingled accounts, he turned to a new victim—Investor-1—luring them into Archipel’s Late Stage Fund with a promise to buy $5 million in private Uber shares. Instead, Gray funneled the cash to backfill earlier losses and purchase post-IPO Twitter stock, fabricating a fake stock transfer agreement to cover his tracks.

The fraud escalated when Gray appeared before the SEC on February 24, 2015, under oath. He lied directly to federal investigators, claiming the forged Uber Stock Transfer Agreement represented a legitimate investment. It did not. Not a single Uber share was ever purchased. The document was pure fiction, crafted to mislead regulators and buy Gray more time.

Now, the fallout is official. In addition to two years in prison, Gray was slapped with three years of supervised release. The court ordered him to forfeit $5,000,000 and pay $5,000,000 in restitution—money that may never reach the investors he betrayed. The judgment underscores the federal crackdown on financial fraud that masquerades as legitimate investment.

Manhattan U.S. Attorney Preet Bharara, whose office prosecuted the case, made it clear: “Gregory Gray deceived investors, claiming he would use their funds to buy shares of high-flying technology companies like Twitter and Uber. In reality, Gray did not make the investments he said he would, and later used new investor funds to pay back earlier investors. In an attempt to cover his tracks, Gray then lied about his investments to the SEC. Today, his federal crimes have led to a sentence of imprisonment.” The FBI led the investigation, with assistance from the SEC.