Elk Grove executive convicted of defrauding investors
An Elk Grove Village executive on Monday was convicted of defrauding about 200 investors out of $9 million after he claimed his company made Homeland Security and food safety products and had contracts for business.
A jury in U.S. District Court in Chicago convicted Gregory Webb, then CEO and president of InfrAegis Inc., of nine counts of wire fraud and mail fraud. Two other counts were dropped.
The 71-year-old former Arlington Heights resident, who was last living in Dallas, now faces a maximum penalty of 20 years in prison and a $250,000 fine for each count and restitution, according to court documents. Sentencing is scheduled for Nov. 7 before Judge Virginia Kendall.
After sentencing, Webb could appeal, said his attorney Michael Monico.
"Webb did not take a salary and he even lent the company $1.3 million of his own money. He didn't get half of that back," said Monico. "It's unfortunate but he was an optimist and believed his company could make it."
The indictment, announced in February 2014, alleged Webb devised and participated in a scheme to defraud investors by making false representations about the financial condition of his company and the expected returns of their investments in it.
According to court documents, Webb and InfrAegis obtained more than $9 million from investors by offering and selling stock in the company by falsely portraying InfrAegis as having high-level connections in the Homeland Security market and lucrative contracts for the sale of its products between 2007 and October 2013.
Webb and InfrAegis also were accused of falsely representing that the city of Chicago had agreed to install InfrAegis' iaMedium, a kiosk that supposedly could detect the presence of nuclear or biological weapons throughout the city, and that the agreement would result in profits of more than $80 million a year, the indictment alleged.
While InfrAegis had some discussions with the city about installing iaMediums in 2007 and 2008, there was never any agreement to install the system in Chicago, documents said.
In 2009 and 2010, Webb and InfrAegis allegedly falsely represented that the company had a contract with the Washington Metropolitan Area Transit Authority to install iaMediums throughout the Washington, D.C., Metro train system. Negotiations were terminated when WMATA determined that InfrAegis was not financially responsible, documents said.