Houston businessman arrested for $32 million fraud

Ray Davis, a 62-year-old Houston man, has been arrested following the return of a federal indictment charging him for his role in a securities and wire fraud scheme, totaling over $30 million.

A grand jury returned a 21-count indictment on 7 December. According to the indictment, the scheme involving defrauding investors in Behavioral Recognition Systems Inc (BRS) by making false and misleading statements to investors to fraudulently induce them to purchase shares in BRS ($32 million). He also allegedly embezzled more than $11 million from BRS.

BRS was based in the Galleria and made artificial intelligence technology that analyzes video information. Mr Davis founded the company in 2005, raised the money from investors in 2008-2009 and sold the business to a company called Giant Gray in 2015.

According to this February 2017 article in the Houston Chronicle Giant Gray sued Mr Davis and his son, Charles Davis for embezzling money by creating false invoices and charging personal expenses to the company.

There was no mention of the son, Charles Davis, in the federal indictment.

If convicted, Mr Davis faces up to 20 years in prison for the securities fraud charges as well as each of the 20 counts of wire fraud. The charges also carry a possible $250,000 maximum fine.

https://www.justice.gov/usao-sdtx/pr/local-man-arrested-30-million-securities-and-wire-fraud-scheme

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