John H. Durham, United States Attorney for the District of
Connecticut, announced that THOMAS J. CONNERTON, 67, of Stamford, was sentenced
today by U.S. District Judge Stefan R. Underhill in Bridgeport to 108 months of
imprisonment, followed by three years of supervised release, for operating an
investment scheme that defrauded more than 70 individuals, including several
women he met on a dating website, of more than $2 million.
According to the evidence presented during his trial,
Connerton was the founder, president, and CEO of Safety Technologies, LLC
(“Safety Tech”), a Connecticut company that had its principal place of business
at various times in Simsbury, Madison, Westport and Stamford. Safety Tech was founded in 2006, purportedly
for 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. Safety Tech had not obtained any patents from
the U.S. Patent and Trademark Office, and Connerton did not register Safety
Tech’s securities with the U.S. Securities and Exchange Commission (“SEC”).
Beginning in approximately 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. Connerton offered his investors
small amounts of equity in Safety Tech through “Subscription Agreements” or
investments contracts through which he sold what he described as “Units.”
Several of the victim-investors were women who were drawn
into the scheme after Connerton met them on a popular dating website.
Connerton made numerous other false representations to
victim-investors, including stating in September 2015, “I will go on the record
to state that there is not a single investor that will lose one dollar invested
in Safety Technologies.”
Even though Connerton represented to victim-investors and
potential victim-investors that the funds they invested would be used to fund
research and development, for product testing, for business expenses and for
legal fees, he used invested funds to pay personal expenses including, on two
separate occasions, to purchase two diamond engagement rings from Tiffany &
Co. Connerton also used funds to repay
loans to an earlier investor.
Through this scheme, Connerton defrauded more than 70
victim-investors of more than $2.2 million.
The investigation also revealed that Connerton engaged in
monetary transactions in an attempt to conceal from the FBI and the SEC the
nature and source of funds received by Safety Tech from the sale of Safety Tech
securities. Connerton negotiated checks
and purchased bank checks in order to move the fraudulent proceeds from one
account to another.
The investigation further revealed that Connerton willfully
failed to pay $293,033 in federal income taxes between 2003 and 2015.
On September 17, 2018, a jury found Connerton guilty of 12
counts of wire fraud, one count of mail fraud, 16 counts of securities fraud,
four counts of money laundering and one count of tax evasion.
The government is seeking full restitution for the
victim-investors and forfeiture of the two engagement rings that Connerton purchased
with proceeds of the fraud scheme.
Connerton also owes more than $500,000 in back taxes, interest and
penalties. Restitution will be
determined after additional court proceedings.
Connerton has been detained since his arrest on March 9,
2017.
This matter was investigated by the Federal Bureau of
Investigation and Internal Revenue Service – Criminal Investigation Division.
U.S. Attorney Durham also acknowledged the important
assistance of the Securities and Exchange Commission.
The case is being prosecuted by Assistant U.S. Attorneys
Michael S. McGarry and Lauren C. Clark.
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