A federal judge in Florida has ordered a Portland-based medical supply company and its founder to return a $108,000 deposit they took from a customer for pandemic supplies they never delivered.
U.S. District Judge Robert N. Scola Jr. issued the default judgment Dec. 30 against Noble Partners LLC and its founder, Sean C. Grady of Portland, who is himself facing a separate five-count criminal indictment for securities fraud and theft by deception in Maine. Grady has also been barred from trading securities by the state of New Hampshire, to which he owes $238,471 in fines and restitution stemming from an alleged fraud.
Noble Partners LLC had been involved in the cannabis trade but began doing business as Noble Medical Supply shortly after the pandemic struck the U.S. in March, offering N95 masks, COVID-19 tests, and other supplies then in desperately short supply. Former state legislator Diane Russell of Portland is the firm's government relations director.
The federal lawsuit was filed by Lezer Corp. on Aug. 4 in U.S. District Court for the Southern District of Florida and alleged that Noble Partners and Grady defrauded the company of its deposit on a May 10 order for 218,000 alcohol wipes, 95 percent of which it says were never delivered. Lezer, a medical distributor incorporated in Delaware with offices in Bay Harbor, Florida, claimed it was "absolutely shocked" when Noble and Grady failed to deliver on May 18 as had been agreed.
"Grady was not even apologetic, and instead offered Lezer only stall tactics and false promises regarding shortly providing delivery," Lezer said in its complaint. Grady ignored the company's requests to return its deposit, leading Lezer to conclude that he was running "Noble and its affiliated business entities as mere fronts and alter-egos to advance his criminal fraud enterprise and hide his identity," the company claimed.
Court records show that Noble Partners and Grady never responded to the suit, despite being served summonses in August. In late October Noble's attorney, Jeffery Bennett of Legal-Ease LLP in South Portland, told the Press Herald the summonses were not sufficient to "join" his clients to the case, suggesting that it therefore was not yet an issue that needed to be dealt with.
"The court has something sitting on its docket that nobody has ever read or investigated and this isn't the time to perform that task," Bennett said Oct. 26, 11 days after a court clerk had recorded them as being in default for having missed the deadline to respond.
Bennett, Grady and Russell did not respond to interview requests.
In addition to the return of its $108,000 deposit, Lezer had sought nearly $340,000 in costs, fees and damages, but the court said its lawyers had not provided sufficient facts and legal authority to approve their motion.
Lezer's Skokie, Illinois-based attorney, Aharon S. Kaye, told the Press Herald on Tuesday that there were procedures available to allow his clients to resubmit their request for additional damages, but it wasn't clear it would be worth doing so because of the uncertainty of collecting even those damages already awarded. "Just because you win, it doesn't mean you can collect," he explained. "We've been learning that there must be other creditors out there."
Grady first attracted attention in March 2020 when he started taking orders from municipalities, fire departments and hospitals in Massachusetts for N95 respirators, three-ply masks, gloves, hand sanitizer and other critical medical supplies that first responders and front-line health care workers were having trouble obtaining. His company, which had no experience in medical supplies, claimed to be able to secure hundreds of thousands of the coveted N95s and also offered to sell COVID-19 tests.
The Press Herald reported March 26 that Grady has been facing a five-count criminal grand jury indictment in Cumberland County Superior Court on charges of securities fraud, theft by deception and selling securities without a license for incidents predating the pandemic. The indictment alleges Grady defrauded two investment clients, in one case by falsely representing that the funds would be invested in Noble Partners, and that the individual would be made chief technology officer of the company. He was originally scheduled to appear in court April 22, 2020, but the pandemic has postponed the court proceedings indefinitely.
Grady has also been permanently barred from being granted securities licenses and registration privileges in New Hampshire after he failed to respond to a November 2018 cease-and-desist order connected with one of the alleged frauds. He owes that state $238,471 in fines and restitution imposed in its summary administrative judgment against him, part of which was to compensate the alleged victim, an elderly woman from Charlestown, New Hampshire.
In October, Noble's websites were taken down by its provider, which replaced them with a message saying they owed them more than $15,000. The company's websites are back up now, but it's not known if or how the situation with the web provider was resolved.
The founder and CEO of Portland's Maine Craft Distilling, Luke Davidson, told the Press Herald in early November that his firm had lost over $150,000 after Grady and Noble Partners encouraged him to retool to mass-produce tens of thousands of gallons of sanitizer a week for them. Noble then failed to come up with payment for the vast majority of what he had pivoted his firm to produce, Davidson said, and the unwanted sanitizer remains in a rented warehouse.
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