McKinney Man Pleads Guilty to Scheme to Defraud Investors to Support Lavish Lifestyle

DALLAS — Gary Ronald Morris, 69, of McKinney, Texas, appeared in federal court yesterday before U.S. Magistrate Judge Rene Toliver and pleaded guilty to one count of wire fraud, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

The filed Information alleged that during the period from at least 2008 through 2016, Morris owned and operated Greystone Digital Technologies, Inc. and Kiboga Systems Inc., based in Addison, Texas and registered in the state of Texas.  Morris represented that Greystone developed and manufactured large bore cargo scanners capable of scanning cargo containers, and that Kiboga developed and maintained software that operated the large bore cargo scanners.  It was also alleged that Morris falsely represented to investors that he completed his design and had actually built a fully functional “cargo scanner ”, and that this new “cargo scanner” had been built, tested and demonstrated a capacity to successfully scan vehicles, trucks, cargo containers, and other items for the detection of drugs, explosives and other contraband.  In furtherance of the scheme, Morris made false representations to investors that he needed and used investor funds to finance the continued development of the software program for the cargo scanner.

The wire fraud count also alleged that the vast majority of the investor funds were used for Morris’ personal expenses and to support his lavish lifestyle.  Among other things, Morris used investor funds for travel, to purchase luxury automobiles and two residences with a total value of nearly $1 million and as the source of funds for hundreds of thousands of dollars in cash withdrawals.

In his filed plea papers, Morris admitted that he engaged in a scheme to defraud investors for an extended period, from at least 2008 through 2016.  Morris also admitted that as part of this scheme he made a series of false representations to investors in order to conceal from investors the true state of the business of Greystone Digital Technologies.  Morris deceived investors in order to avoid demands for refunds of invested funds or possible lawsuits from investors.  Specifically, Morris used a fraudulent email to falsely represent to investors that Greystone employees were physically on site and working on the cargo scanner project at the Federal Express facility in Memphis, Tennessee.  In this fraudulent email, Morris also falsely represented that Greystone employees were engaged in ongoing activity with Federal Express employees focused on the development of a cargo scanner.

Morris faces a maximum penalty of imprisonment not to exceed twenty years and a $250,000 fine. Restitution could also be ordered.  Sentencing has not been set.

The investigation was conducted by the Wichita Falls office of the Federal Bureau of Investigation and Assistant U.S. Attorney David Jarvis is in charge of the prosecution.

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