Former Columbia GSB Adjunct Professor Faces Fraud Charges: MBA News

By Tim Dhoul Updated Nov 06, 2014

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Introduction
Accused emphasized his links to Columbia Business School
Navagate case alleges Rorke navigated his way through years of deception

Fraud charges for former Columbia GSB adjunct professor

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A former adjunct professor at Columbia Business School, Gregory Rorke, is facing two fraud charges in relation to an alleged scheme to defraud US$3 million from more than 30 investors. Rorke, 60 years old, is also an MBA alumnus of Harvard Business School.

If found guilty, the respective wire and securities fraud charges carry maximum sentences of 20 years each and a potential fine of US$5 million.

Over a 15-year period of attachment to Columbia GSB, Rorke “taught turnaround management, bankruptcy and restructuring in the MBA program,” according to the Securities and Exchange Commission (SEC). The SEC added that Rorke’s MBA teaching and prior expertise focused on “turning around troubled companies.”

He is now alleged to have duped investors into making investments in a convertible debt offering in a computer software company, Navagate Inc. As the principal owner and cofounder, Rorke is understood to have solicited investments and was actively involved in its daily management.

“As alleged, Gregory Rorke grossly misrepresented his character and financial stability to investors, whom he then defrauded of millions of dollars," said US Attorney, Preet Bharara, in announcing the fraud charges.

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Accused emphasized his links to Columbia Business School

Rorke joined the faculty at Columbia Business School in 1997 but is no longer attached to the school. However, it appears that he may have deliberately used his links to a reputable institution to curry good favor with investors.

“Rorke emphasized that he was an experienced businessman and former professor at Columbia Business School,” reads a further statement for the SEC. Indeed, Navagate’s website gives the impression that he remains on the faculty at Columbia GSB when, in fact, he left in 2012.

However, with the allegations dating back to December 2009, the fraud charges do overlap with his time at Columbia Business School.

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Navagate case alleges Rorke navigated his way through years of deception

Rorke is said to have issued a personal guarantee that used assets solely owned by his wife – and who would therefore be under no obligation to make good on Rorke’s guarantee.

He is also accused of failing to disclose Navagate’s tax liabilities to investors and then subsequently lying about paying them off.

When investors started to demand repayment or threaten legal action in 2012, Rorke allegedly sought to qualm their apprehension:

“Rorke forwarded an email purporting to be from a representative of Hong Kong Shanghai Bank Corporation (HSBC), which falsely stated that HSBC had just signed a multimillion-dollar contract with Navagate when, in truth and in fact, the email appears to have been a complete fabrication,” reads the Complaint released by the US Department of Justice.

Another man, Gregory Osborn of broker-dealer Middlebury Securities LLC, was also charged in connection with the Navagate case. All allegations remain unproven at this stage.

Deceiving investors has also led to the prosecution of a former associate dean of MIT Sloan. Back in August, Gabriel Bitran agreed to plead guilty to running a hedge fund scam along with his son, another Harvard MBA graduate.

Written by

Tim Dhoul

Tim is a writer with a background in consumer journalism and charity communications. He trained as a journalist in the UK and holds degrees in history (BA) and Latin American studies (MA).