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TAMPA — A 58-year-old Ellenton, Manatee County man was sentenced to six years in prison Feb. 3 for defrauding a bank out of $20.6 million. His father, whose age was not disclosed, is scheduled to be sentenced for the same crime March 25.
The son, Loyd Tomlinson II, was also fined $240,000 by U.S. District Judge Virginia Hernandez Covington. Tomlinson II had faced 20 years in federal prison.
The two men owned and operated LTA International Global Services in St. Petersburg. According to court papers, Loyd Tomlinson Sr., the father, was the company’s president and CEO. Tomlinson II was CFO and handled the day-to-day operations.
The company’s business model, court papers say, “consisted of purchasing products intended for a particular distribution channel or customer, which were then diverted or sold to other customers.”
The company began having serious financial troubles in about 2015, with $13 million owed to one unnamed bank for a revolving line of credit.
According to Tomlinson II’s September plea agreement here’s what happened:
In 2016 Tomlinson II and his father, facing serious financial problems, came up with a plan to fabricate documents and records in order to raise money from investors and keep the line of credit. Their goal was “salvaging LTA’s business.”
Tomlinson II and unnamed “others” inflated sales and created fake bank statements as well as accounts receivables and inventory documents. They also borrowed money from investors, using the fake documents, as off-the-book loans. And they used a company Tomlinson II formed in 1994 to obtain business loans and investments that were hidden from the financial institutions lending LTA money.
In July 2019, the company was able to secure a $20 million revolving line of credit from a second bank, also unnamed. They got a replacement revolving line of credit for $21 million in April 2020 from the same bank.
As part of LTA’s loan agreement with the second bank, it was required to provide certified financial statements, with balance sheets and income statements, monthly and yearly; monthly reports on inventory, aged accounts receivables and accounts payables; and weekly cash balance statements.
Tomlinson II and his father provided the documents but made “numerous materially false and fraudulent representations” in them persuading the bank to keep the line of credit open, officials say in court records.
In one example, Tomlinson II sent an email that included doctored 2016 and 2017 U.S. Treasury 1040 forms in his and his father’s name which included inflated personal and business incomes. And they provided the bank an accounts receivable and inventory record showing LTA had $7 million in receivables from an international grocery chain. Turns out the company had never had a contract with the chain.
Then on March 25, 2020, Tomlinson II sent an email to a bank representative with an attached profit and loss statement showing that in January it had more than $7 million in total income and $400,000 in gross profit.
In total, the bank was defrauded out of $20.6 million. Tomlinson II personally got about $280,000 of those proceeds and kept them for himself.
Tomlinson Sr. faces 20 years in prison and a $250,000 fine when he’s sentenced in March. According to his plea agreement, he got about $400,000 from the proceeds and kept them for himself.
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