Princeton couple accused of Ponzi scheme arrested for contempt of court in separate case

A Princeton couple accused of selling investments in gas and oil projects to members of their social circle in Princeton as part of a Ponzi scheme has been arrested for contempt of court in a separate case in New York.

Ford Graham, 56, a 1986 alumnus of Princeton University, and his wife, Katherine Graham, 55, were arrested on Nov. 21 and remanded to the custody of the Federal Bureau of Prisons until they comply with prior court orders stemming from a 2014 federal case. The couple is being housed at the Metropolitan Correctional Center in Manhattan, according to public records.

The arrests and the lawsuit are related to Ford Graham’s company, Vulcan Power Group. The lawsuit stemmed from a dispute over the sale of a mobile power generator by a Vulcan Power subsidiary to a government contractor. The generator was slated for use in restoring electric service to Iraq shortly after the 2003 invasion by the United States. A sales representative for Vulcan at the time, Susan Flannigan, alleged that she was promised a 4 percent commission for brokering the sale of the power generator. Vulcan and Ford Graham allegedly failed to pay the commission in violation of New York labor laws. Flannigan claimed the company also retaliated against her for filing the lawsuit by lodging meritless counterclaims accusing her of breaching her duty of loyalty. She also alleged that the company issued harassing subpoenas to her clients.

In 2014, a jury found Vulcan liable on both the wage and retaliation claims. The jury awarded more than $766,000 in compensatory damages on the wage claim, $300,000 in compensatory damages, and $900,000 in punitive damages on the retaliation claim. U.S. District Judge Loretta Preska added almost $192,000 in liquidated damages to the judgment.

Vulcan appealed, but in 2016 the Second Circuit upheld the jury’s $2 million award. A three-judge panel said the jury’s findings were supported by evidence and that “the defendants’ egregious conduct and malicious abuse of the judicial process fully supported the jury’s award of punitive damages.”

According to the recent civil contempt order, the Grahams have not paid the plaintiff in the Vulcan case, have not responded to previous court orders, and have not described to the court their financial resources or shown the court that they are unable to pay the judgment. According to the contempt order, the court tried to use less onerous measures to get the Grahams to comply before arresting the couple. In July of 2019, the court ordered the Grahams to pay the plaintiff $4,167 a month until the judgment is satisfied.

A separate New Jersey case is still pending against the couple. The New Jersey Bureau of Securities alleges in a lawsuit that was filed in January that the Grahams raised more than $5 million through a series of loans and fraudulent sales of unregistered securities from unsuspecting individuals and investors, including fraudulently selling at least $1.9 million of unregistered securities to New Jersey investors. The couple allegedly spent a significant portion of the investor funds on luxury vacations, country club payments, and other personal expenses.

At least three Princeton residents were among investors from at least five states who gave money to Graham and his companies.

In February of 2018, Graham, signed a consent judgment in the case, but then allegedly never followed through with the conditions that were stipulated.

The New Jersey lawsuit against Graham, his wife, and some of his business entities, filed in Mercer County Superior Court, alleges that between January of 2012 and January of 2014, Graham — often with the active participation of his wife — represented the unregistered securities to potential investors as low-risk, high-reward investment opportunities in gas and oil projects. But instead, the couple allegedly misappropriated investors’ money for personal expenditures, transferred it to joint accounts in their names, used it to repay prior investors, and withdrew the funds in cash.

Another lawsuit against the Grahams is pending in Mercer County Superior Court. In that case, the Grahams allegedly borrowed almost $35,000 from a Princeton resident, promised to pay it back, but never did.

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  1. This certainly will not end well. Someone is very determined to hide the truth from the courts and justice. MCC is a dungeon for the worst of the worst. Some compare the place to more like a kennel than a detention facility. The media has never been allowed inside. Same with the Red Cross.

  2. This is a old 2007-9 New York case. What ever happened to the millions that went missing resulting in the New Jersey Attorney General charges?

  3. Thursday morning will be a week for the both of them in one of the worst of the worst punitive dungeons in America. Maybe the world. The press has never been allowed inside the place. Princeton is silent on this one. Mostly pretending it is not even taking place. Never happened! The lady judge does not even have a hearing on the docket to discuss how Mr. and Mrs Graham can earn any of their freedoms back. No bail! No future hearings! Forgotten? What are we ignoring and missing here?

  4. What you’re missing here is that they are in contempt of court, which means that in order to “earn their freedoms back,” as you put it, they, for starters, need to comply with the court’s orders–namely to pay the judgement they owe. As long as they don’t pay, they’ll sit in jail, which is where people who rip off other people belong. Get it now?

  5. She is out for now with a promise of fully and complete cooperation. He asked to released on the same promise. So far the lady judge refused to even allow a hearing. No bail, no hearing for inmate:

    Register Number: 87501-054
    Age: 56
    Race: White
    Sex: Male
    Release Date: UNKNOWN
    Located At: MCC New York

    MCC is for the worst of the worst. Some compare the place as more like a poorly run animal kennel. Maybe the media can get a quote from the recently released inmate?

  6. Instead of petitioning the courts for a turkey and drinking day furlough. Mr. Graham should have notified the courts that the P’Town X Mas tree lighting could not possibly go on without him. Ohh How will Palmer Square and Princeton society continue without the Head Tiger Court Jester and Pied Piper…

  7. This will make week two that Ford Graham has been caged in one of the worst jails in America. The lady senior judge has three decades on the bench, a former chief judge of the court. A short list contender for SCOTUS. That should tell the doubters and defenders of the Graham’s something. Judge Loretta Preska is no fool and always acts wisely and judiciously. The long P’Town con is up at the feet of this 70 year old lady who will not be pushed around by the Princeton boy. #GiggsUp

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