April 5, 2011

Jailed Salem official now faces loan lawsuit

Union Leader Correspondent
SALEM -- As Jeffrey Gray sits in jail facing kidnapping and sexual assault charges, federal attorneys are working to recoup $122,000 from the Salem town official to cover an unpaid education loan. The suit, filed on behalf of the U.S. Department of Education, alleges that Gray defaulted on a $61,000 Federal Family Education Loan Consolidation loan from Citibank in New York. The loan was disbursed in 1996. But coupled with more than $56,000 in interest payments, Gray is now said to owe the U.S. Department of Education $122,268, according to a certificate of indebtedness from the federal Department of Education office in San Francisco.
Gray has been in Rockingham County jail since his arrest on March 29 on felony charges of kidnapping and sexual assault, along with misdemeanor charges of simple assault, obstructing the report of a crime and false imprisonment.
Police say Gray held a 35year-old woman from New York captive in a home he was renting in Windham, sexually assaulting her over the course of three days in early March.
Gray is said to have been living in Windham, but is a longtime resident of Salem and member of the Salem Planning Board.
Gray was arrested in Brockton, Mass., on March 29 and was arraigned the following day in Salem District Court. He is being held on $50,000 cash bail and is scheduled to appear this morning for a probable cause hearing.
The new lawsuit was filed in New Hampshire U.S. District Court on March 30, just one day after his arrest.
Gray’s attorney, Mark Stevens of Salem, said Monday he was not aware of the pending litigation.
“(Gray) will have to be served over at the jail,” said Stevens. “I don’t know whether he has been or not.”
Gray’s original loan had been guaranteed by United Student Aid Funds, Inc., an Indiana-based nonprofit corporation that acts as a student loan guarantor, according to Department of Education
 document. The loan was also insured by the federal Department of Education.
So when Gray defaulted on the loan in 2000, United Student Aid Funds paid the full amount to Citibank and tried unsuccessfully to collect from Gray, according to the document.
In 2007, the loan was assigned to the U.S. Department of Education, which reimbursed United Student Aid Funds for $66,000.
As of February 21, Gray owed $56,220 in interest payments, according to the document, and interest continues to accrue at a rate of $16.27 per day.
The federal suit asks a judge to award the federal Department of Education $122,268, plus all attorney fees and any additional interest accrued since February.
Gray is the owner of J.M. Gray & Associates, a land surveying company he ran from his Salem home.
Gray is also said to owe more than $23,000 in child support payments to his sister, Lisa Sorenson of Maine, according to a Salem Family Division court order.
Sorenson has had custody of Gray’s two children, now 13 and 14, off and on since 2004, according to court documents. The children currently live in Maine with their aunt.
Gray has appealed the Salem court order to the New Hampshire Supreme Court, and the matter is scheduled for further review on July 26.
Gray is also the plaintiff in a separate case claiming that Sorenson has interfered with his custodial rights and inflicted emotional distress on him and the two children.

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