Ex-Convict Accused of Abuse, Extorting College Students for Nearly $1M Pleads Not Guilty

An ex-convict accused of bilking several college students out of nearly $1 million and forcing some into prostitution or unpaid labor pleaded not guilty Wednesday on extortion and sex trafficking charges.

Lawrence "Larry" Ray, who was arrested Tuesday, was previously known for his role in helping to send former New York City police commissioner Bernard Kerik — a close confidant of Rudy Giuliani — to prison. He entered his not guilty plea to charges stemming from the recruitment, extortion and abuse of young women over the past decade, according to prosecutors.

Federal prosecutors said the 60-year-old used "physical, sexual and psychological abuse" to extort money from five different students at Sarah Lawrence College, a private liberal arts college outside New York City. He convinced them they were indebted to him, authorities said, subjecting them to "grueling interrogations" that spanned hours and deprived them of food and sleep.

Prosecutors also said he was able to "sexually groom" his victims before blackmailing and extorting them.

A prosecutor also told the judge that investigators are studying large amounts of materials, including 20 to 40 electronic devices, seized from Ray's home in Piscataway, New Jersey, after search warrants were executed. Assistant U.S. Attorney Danielle Sassoon told the judge that statements Ray made after his arrest will be turned over to defense lawyers so they can prepare for trial.

She said investigators who conducted about 17 interviews with victims were told that Ray would sometimes use a woman's electronic device to take sexually explicit materials and then seize that device. He would also direct victims to write "sensitive and incriminating things" in journals that he would then use against them, she said.

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The prosecutor said evidence that would eventually be shown to defense lawyers under secrecy rules meant to protect the identities of victims included videos of Ray berating a victim and sexually explicit content that relates to the extortion.

Ray was taken into custody Tuesday and later made appeared in Manhattan federal court. After the sex trafficking and abuse allegations first surfaced, Ray met with News 4 off-camera and denied the allegations. He had alleged he was being set up. Assistant Federal Defender Marne Lenox told U.S. District Court Judge Lewis J. Liman her client might make a bail application at a hearing scheduled in two weeks.

After Wednesday's hearing, Lenox declined to comment. She told the judge that Ray would determine in the next few weeks whether he'll hire his own lawyer or seek court-appointed counsel.

U.S. Attorney Geoffrey Berman told reporters the investigation was prompted by an article that appeared last year in New York Magazine.

Ray allegedly ensnared many of his victims while they were college sophomores at Sarah Lawrence. His first victims were his daughters' roommates, Berman said.

Ray moved into the students' on-campus housing in late 2010, presented himself as a father figure to the roommates and began conducting "therapy" sessions with them, according to an indictment filed in U.S. District Court.

Prosecutors said he alienated them from their parents, persuading some of them to move into a Manhattan apartment and convincing them they were "broken."

"After gaining his victims' trust, Ray turned on them, falsely accusing them of harming him by attempting to poison him or to deliberately damage his property," Berman said.

Ray solicited false confessions from more than a half-dozen victims, Berman said, and coerced them to make payments "they did not actually owe and could not possibly afford." Prosecutors said Ray recorded some of the confessions.

In interviews with New York Magazine, Ray said he believed he was being poisoned as part of a conspiracy hatched by some of the students and Kerik, who denied any involvement.

"I haven’t spoken to Larry Ray in over 19 years. I only wish that the FBI and the Justice Department realized what a con-man he was prior to making him their superstar witness against me," Kerik told News 4 in a statement. "In their zeal to destroy me and my family, they ignored his lies, deceit, and inconsistencies. Hopefully, this indictment will be the end of his reign of terror on everyone he has conned, manipulated, or deceived, and the children he has hurt." 

Sarah Lawrence said Tuesday that it has not been contacted by federal prosecutors but would cooperate "if invited to do so."

The college said it investigated the allegations raised in the New York magazine article but "did not substantiate those specific claims."

"The charges contained in the indictment are serious, wide-ranging, disturbing and upsetting," the college said in a statement. "As always the safety and well-being of our students and alumni is a priority for the college."

In a letter to the college's community on Wednesday, University President Cristle Collins Judd said the indictment "raises serious and troubling questions" about how the students came under his influence, and what actions could have been taken to intervene.

"Perhaps because the apartment in question was a small townhouse with its own entrance, students in other housing would not necessarily have been aware of the presence (and have told us they were not) of this student’s father," Judd wrote. "What we do know is that no reports about this parent’s presence on campus during that semester, formal or informal, were lodged by students sharing that small living space, by their student neighbors, or by anyone else. The potential reasons cited above are not offered as a justification or as an effort to place blame, but rather as potential answers to the troubling question with which I have been wrestling."

Prosecutors allege that Ray directed the students to drain money from their parents' savings accounts and forced some of them into unpaid labor at a family member's property in North Carolina. Others opened lines of credit or solicited contributions from others to help pay the false debts.

"Ray subjected his victims to almost unspeakable abuse," Berman said, alleging Ray once tied a woman to a chair and placed a plastic bag over her head that nearly suffocated her. Ray collected more than $500,000 from that woman after forcing her into prostitution, prosecutors said.

Ray previously played a role in a scandal involving Kerik, a former police driver for Giuliani while he was mayor. Kerik became New York City’s corrections commissioner in 1998 and then its police commissioner from 2000 to 2001, serving during the 9/11 attacks.

Kerik nearly became President George Bush’s homeland security secretary in 2004, but his name was abruptly withdrawn as the nominee.

Two days later, The Daily News reported that Ray, who had been the best man at Kerik’s wedding, had come forward with evidence that Kerik failed to report thousands of dollars in gifts he’d received while working for the city. A the time, Ray was under indictment in a $40 million stock scam.

Kerik ultimately served nearly four years in prison for tax fraud, making false statements and other charges related to gifts he accepted from companies looking for favors, including a construction firm that wanted his help getting a city license.