$3M Fraud Scheme Yields 2 Years in Prison for Bronxville Man

BRONXVILLE, NY - A Bronxville man was sentenced to two years in prison for defrauding investors in his company of more than $3 million.

Gregory Rorke, 63, who also has a residence in Manhattan, pled guilty May 7, 2015, to one count of securities fraud and one count of wire fraud.

U.S. Attorney Preet Bharara said Rorke admitted to lying to investor while he solicited their investments in Navagate, Inc., his company.

“He overstated his own net worth and the tax liabilities of the company,” Bharara said.

“Rorke, a former professor at Columbia Business School, learned an important lesson in business ethics,” he said.

Rorke was also sentenced to three years of supervised release.

According to the complaint, documents and statements made in open court:

From at least December 2009 through October 2014, RORKE engaged in a fraudulent scheme to mislead investors into making investments in a convertible debt offering (the “Navagate Offering”) in his company, Navagate. RORKE, a former adjunct professor at Columbia Business School, was the co-founder, chief executive, and principal owner of Navagate. RORKE solicited investments and was involved in the daily management and operation of Navagate.

RORKE solicited investor contributions to the Navagate Offering based on materially false and fraudulent misrepresentations. In particular, RORKE signed and provided to investors a personal guarantee supported by a financial statement. The financial statement falsely indicated that Rorke personally had at least $12 million in assets, including more than $1 million in cash, more than $5 million in “readily marketable securities” and a home worth more than $1 million. In truth, and as RORKE well knew, the majority of the pledged assets did not belong to RORKE.

In addition, in order to obtain access to funds invested by Navagate investors and maintained in an escrow account, RORKE signed a notarized affidavit indicating that he had paid monies owed to the Internal Revenue Service in satisfaction of Navagate’s tax liabilities. In truth, the tax liabilities had not been paid, remained outstanding, and were actually increasing.

As a result of his fraudulent scheme, RORKE raised approximately $3 million in investor money from more than 30 investors.