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Stamford resident Thomas Connerton, the founder, president and CEO of Safety Technologies, LLC, which operated out of Westport, Stamford, Madison and Simsbury, has been found guilty in federal court for his role in the investment scheme.
John Durham, the United States Attorney for the District of Connecticut, said that Safety Technologies was founded in 2006, with the purpose of developing and commercializing what was represented to be a highly durable puncture and cut resistant material that was to be used in the surgical glove market and other related markets.
To date, Safety Tech has not obtained a single patent from the U.S. Patent and Trademark Office, and Connerton never registered Safety Tech’s securities with the SEC.
Beginning in June 2009, Connerton “induced victim-investors to provide him funds and to purchase Safety Tech securities by falsely representing that the valuation of Safety Tech was realistically in the tens or hundreds of millions of dollars, that a lucrative deal to sell or license his glove technology was imminent, and that he would use their funds for research and development, product testing, and to bring the product to market.”
The former CEO offered investors small amounts of equity in the company through “subscription agreements,” which served as contracts through which he sold what was described as “units.”
Durham noted that several of Connerton’s victims were women who were drawn into the investment scheme after meeting him through a popular online dating website. In September 2015, Connerton even went so far as to tell investors “I will go on the record to state that there is not a single investor that will lose one dollar invested in Safety Technologies.”
Connerton claimed that he was using the funds that were invested to fund research and development for product testing, business expenses and legal fees. However, he used those funds to pay for personal expenses, including - on two separate occasions - to purchase two diamond engagement rings from Tiffany & Co. He also used some of the money to repay loans from an earlier investor.
In total, Connerton defrauded more than 50 people out of more than $2.2 million. In an attempt to hide the scheme from the FBI and SEC, Connerton engaged in monetary transactions. Further investigation found that he also failed to pay $293,933 in federal income taxes between 2004 and 2015.
Connerton was found guilty by a jury of 12 counts of wire fraud, 16 counts of securities fraud and one count of mail fraud. Each carries a maximum term of 20 years in prison. He was also found guilty of four counts of money laundering, which carries a maximum term of 10 years in prison for each count, as well as one count of tax evasion, which carries a maximum term of five years behind bars.
Connerton has been in custody since he was arrested on March 9 last year. No sentencing date has been scheduled.
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