COVID Fraudster Was A Stock Market Maven

Felon bought Tesla shares with relief funds

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Tesla Fraudster

DECEMBER 7--In fact, crime does pay (at least for Uncle Sam).

An Oregon fraudster who stole $3.5 million in federal pandemic relief funds invested half of the purloined loot in Tesla stock, a stake that has since exploded in value and delivered a windfall return for U.S. officials who seized the securities, now worth more than $16 million.

Andrew Lloyd, 51, was sentenced yesterday to four years in prison following his guilty plea to federal bank fraud, money laundering, and aggravated identity theft charges.

Lloyd copped to submitting fraudulent payroll information and other false documentation to secure Paycheck Protection Program and Small Business Administration loans in mid-2020. Prosecutors described Lloyd as “an opportunistic fraudster” who “quickly went to work” when details of assistance programs were unveiled.

Flush with several million dollars, Lloyd purchased 21 properties in Oregon and a residence in California. He also moved $1.8 million into his E*Trade account and began buying Tesla stock (as well as small positions in a pair of ETFs and Square).

At the time of Lloyd’s initial Tesla purchases, the stock sold for less than $200 a share. Tesla currently trades at around $1100.

As Tesla’s price rose, the value of Lloyd’s portfolio ballooned, allowing him to secure lines of credit that enabled him to buy more Tesla stock. By the time federal investigators caught on to Lloyd’s loan scheme and seized his brokerage account last year, he owned 15,740 Tesla shares.

Lloyd’s Tesla stake, which federal officials will soon liquidate, is now worth in excess of $16 million. Additional securities, real estate, and cash that Lloyd agreed to forfeit are valued at several million dollars.

In a sentencing memo, prosecutors said that while “it is true that Lloyd’s speculative day-trading was successful,” his “lucky” stock buys do not “mitigate his culpability.” Contending that agents seized securities before Lloyd “could spend them or lose them,” prosecutors added that, “The seriousness of the offense is not diminished by sheer dumb luck.”

Arguing for a 65-month prison term, prosecutors declared that, “The fraud perpetrated by Andrew Lloyd in only a 60-day period is stunning.”

In addition to the four-year prison term, Lloyd was sentenced to five years of probation and ordered to pay more than $4 million in restitution. In a recent court filing, prosecutors reported that they were seeking approval from the Department of Justice’s Money Laundering and Asset Recovery Section to apply the funds seized from Lloyd to his restitution tab. “Fortunately for the government, and for Mr. Lloyd’s restitution obligation...the value of those securities increased exponentially,” a prosecutor wrote. (6 pages)