Fraud case nearly wrecks cousin's concrete company

Steve Lloyd said he is one step closer to closure after a guilty plea this week from his cousin, whose financial fraud scheme nearly cost Lloyd his company and brought his world crashing down around him.

Gary Lloyd, his first cousin, had been in charge of the company’s day-to-day financial affairs since 1992, according to court records. The Rustburg-based concrete company was called Steve Lloyd & Co. then. In early 2004, Steve Lloyd of Bedford County said, the company got notice that its American Express account had been canceled. In short order, he said, company officials realized their accounts weren’t adding up, that they owed far more money to creditors than they realized.

Then they discovered Gary Lloyd hadn’t paid employee withholding taxes from 1998 until April 2004, according to court records.

“I found out I owed the government $6.9 million,” Steve Lloyd said.

The criminal investigation into where the money went rolled up from the Campbell County Sheriff’s Office, to the Virginia State Police to the FBI, he said.

In order to pay off the debt, the company’s assets were signed over to the federal government and bought back on a payment plan. The company started over as Lloyd Concrete Services, he said.

“I sold everything I had,” he said. “I sold my kids’ Christmas presents.”

While they were struggling to get back on their feet, relatives helped with groceries and others did what they could to help. They never declared bankruptcy and within a year, the new company was current on its bills, he said.

Gary Lloyd, 51, of Forest, was indicted on 13 counts of fraud in September. He pleaded guilty to one count of wire fraud and one count of bank fraud Tuesday in U.S. District Court in Lynchburg.

Federal prosecutors said he used the company’s American Express account to buy himself dinners, groceries, vacations and paid off his personal debt with company funds.

“He did so out of greed and with the knowledge that his actions were criminal,” U.S. Attorney Timothy Heaphy said.

In the instance of wire fraud to which he pleaded guilty, Gary Lloyd wired $32,964, the proceeds of a fraudulent loan on Steve’s life insurance policy, into the company account, court records show. In the instance of bank fraud, he wrote a worthless check on the company’s American Express account for $25,000, then tried to deposit the money in the company’s checking account in Altavista, according to court records.

Steve said he is still not sure what happened to his cousin — why he did what he did. He said he trusted Gary with his life.

“I’ve forgiven him, but I haven’t forgotten what he did,” he said. “Deep down inside, I’m sure there’s a good person. He was raised right. I wish him well.”

Things could have been worse without the help he and his family received, Steve Lloyd said. When he realized just how bad things were, he said, he made a choice between feeling sorry for himself and figuring out a way to get out of the hole.

“We have 88 employees. We had to keep going any way we could,” he said. “There is no quit in this dog.”

Gary Lloyd is scheduled to be sentenced on Jan. 22. He faces maximum penalties of 20 years in prison and a fine of $250,000 on the charge of wire fraud and 30 years in prison and a fine of $1 million on the charge of bank fraud.

He remains free on his own recognizance.