- The Washington Times - Sunday, September 3, 2006

A Loudoun County developer is facing charges from two Virginia law-enforcement agencies after subcontractors and home buyers reported losing hundreds of thousands of dollars in a series of failed business deals.

Gary P. Grimm is scheduled to appear in separate court appearances in Winchester and Frederick County this month to face criminal charges, including more than 20 counts of defrauding subcontractors.

But Mr. Grimm’s attorney, Paul Thomson, says his client is a victim of a sharp decline in the real estate market who went broke.

“He just got caught in the downturn from what I can see and went bankrupt,” Mr. Thomson said. “Gary Grimm is not a criminal. He is an honest developer.”

Frederick County Assistant Commonwealth’s Attorney Glenn Williamson declined to comment on the details of the case, but said Mr. Grimm faces up to 20 years in prison on the fraud charges. Mr. Grimm was indicted last month.

Two weeks ago, several former customers filed complaints against Mr. Grimm in Alexandria bankruptcy court, where he sought protection from creditors earlier this year. Others have filed claims in his bankruptcy case totaling millions of dollars.

Several former customers were in Loudoun and Frederick counties and in Winchester, court records show. Mr. Grimm lives in Leesburg, according to court filings.

Several contractors also say they have not been paid.

In bankruptcy-court filings, Fairfax-based Star Concrete Foundations Inc. is seeking more than $440,000 in unpaid invoices and other fees. Benefield Electric Co. in Manassas says it is owed nearly $150,000. Jim’s Drywall, based in Front Royal, Va., reported more than $250,000 in losses through its dealings with G&M; Homes.

Jim Pugh, who owns Jim’s Drywall, said he filed liens on some of the properties where he worked for Mr. Grimm in Virginia. Mr. Pugh said the filings likely triggered the law-enforcement investigation.

He said he last spoke to Mr. Grimm a few weeks ago.

“He called me the day of the indictments and said he was surprised that I had been a part of that,” Mr. Pugh said. “But I had no choice. I’m out of an awful lot of money.”

Mr. Thomson said Mr. Grimm did not set out to defraud customers or contractors, but that he could not make ends meet because of factors beyond his control.

He said rising interest rates, Hurricane Katrina and soaring gasoline prices hurt the housing market, so people weren’t buying homes.

“He really thought he could work his way out of it,” Mr. Thomson said.

In retrospect, he said, Mr. Grimm probably should have filed for bankruptcy earlier. “He didn’t want to throw in the towel,” Mr. Thomson said.

Mr. Grimm’s bankruptcy petition, filed in May, shows $1.2 million in assets and $5.9 million in liabilities.



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