The Journey of David Grosky: A Story of Loss, Growth, and Purpose

I talked with David Grosky, who served 11 years of a 14-year sentence for securities violations related to his biotech company. His story shows what happens when an entrepreneur’s risk-taking crosses regulatory lines, and how someone can rebuild after losing everything.

From Lawyer to CEO: The Golden Handcuffs Decision

David grew up on Chicago’s North Shore and went through law school, but he wasn’t satisfied practicing law. “I was always a dissatisfied attorney,” David told me. “I was always practicing law largely because I made, for me, particularly in retrospect, the wrong choice for myself. I’m a person who was more of a business developer personality than a desk paper pusher type of person.”

The golden handcuffs kept him stuck. You know the drill, making enough money to support a family but feeling trapped in work you don’t love. Then came the opportunity with Ephora, a biotech company developing HIV tests. The largest shareholders wanted the founder removed and asked David to take over as CEO.

He took the risk. Left his law practice, moved the company from California to the Chicago suburbs, and built it into nearly 100 employees with scientists from Bayer, Baxter, and Abbott Labs. David was so committed that he only took $100,000 annually instead of his board-approved $250,000 salary until the company became profitable.

When Regulations Become Criminal Charges

The problems started with SEC regulations around raising private capital. There are strict rules about how many unaccredited investors you can have, what you can pay brokers, and when you need to enter quiet periods between offerings. As Ephora’s funding needs grew, some of these rules got violated.

David thought it would stay a civil matter, most SEC cases do. But then the FBI raided their facility about a year into the SEC case. “And then I knew it had already begun to morph,” David said.

Here’s what’s wild: the FBI agents who raided them thought the whole company was fake. They demanded the scientists demonstrate the HIV test right there during the raid. David told me: “When they did that demonstration, the reaction of the FBI agents was, oh, my God, this actually works. We thought it was fake.”

Despite that, prosecutors still pushed a false narrative to the Chicago Tribune the next week, calling it a fake company. That’s how the game works, they poison the jury pool while having prosecutorial immunity.

Seven Years of Hell Before Prison

The legal process dragged from 2001 to 2008. Seven years of uncertainty while trying to keep the company alive. David describes it as living in a cocoon, unable to meaningfully explain the complex situation to family or friends.

When plea negotiations finally came, he went through 11 drafts of the agreement. “They turned to me and said, you’re either going to sign this now after the 11th draft or you brought that to,” David recalled. Even then, he believed about 30% of the allegations were false, but the risk of trial was too high. His sentencing guidelines called for 235 to 296 months, potentially over 20 years.

The judge gave him 14 years. David was a member of the federal trial bar who had appeared before this same judge many times. The judge made it clear how disappointed he was in David as an officer of the court.

Finding Purpose Behind Bars

David surrendered to FCI Loretto in Pennsylvania, far from his Chicago family. Walking into prison was actually “an absolute relief” after years of pressure and being scarlet-lettered in his community.

Two weeks in, he started doing legal work for other inmates. As a white-collar lawyer in a low-security facility, he became what he calls “a superstar” among the population for his help with cases and appeals. That respect was crucial for navigating prison safely.

But then something potentially life-threatening happened. During a routine physical at age 50, doctors discovered aggressive prostate cancer. In the outside world, this might have been caught earlier. In prison, David was lucky that this particular facility’s physician routinely gave PSA tests to inmates over 50.

“Had I not received that PSA that year upon my 50th birthday is right when I arrived, I probably very likely wouldn’t have made it,” David said. The cancer was so aggressive it would have progressed from stage one to stage four quickly.

Life After 11 Years

David was released in April 2019 after serving 11 years. He’s been out about five years now and has continued helping people through his experience. He won the Second Chance Hero of the Year award for embodying successful reentry and giving back despite facing enormous challenges.

When we talked, David mentioned how different his perspective is now on what matters, family weddings, being present for important moments. Prison changes how you see the rest of your life and your second chance.

What strikes me about David’s case is how someone with no intention to steal or defraud anyone can still end up with a sentence longer than many violent criminals get. He lost over a million dollars of his own money in Ephora and never took the salary he was entitled to. But under federal sentencing guidelines, intent doesn’t matter much. A securities violation gets treated the same whether you’re Bernie Madoff running a deliberate Ponzi scheme or an entrepreneur who pushed regulatory boundaries too far while trying to save his company.

David’s story shows how quickly civil regulatory issues can become criminal cases, and how the federal system treats all white-collar defendants similarly regardless of intent or personal benefit. It’s a reminder that in the current environment, one prosecutor’s decision can change everything.