Business Toolbox: Law and order
False priest nabbed because of seafood selection

Brian Rush was arrested this week for taking groceries from Gerrity’s store in West Pittston.

Rush pretended he was a priest and told store clerks to charge the items to St. Rocco’s Church. He got caught because the items he charged became more and more unusual — four, two-pound packages of shrimp, Tastykake krimpets and floral arrangements. Not the kind of fare one would expect a priest to select

Now, he deserves a severe penance. – The Citizens Voice, Pennsylvania

GLOUCESTER — It all must have sounded so good to George Sterling.

A man claiming to be a big-shot Georgia deal maker with a plan to consolidate a string of independent seafood companies wanted to buy Sterling's business, Gloucester Seafood.

Sterling was 61 and after a life on the water he was ready to cash in. After selling the land and business he would still collect a paycheck for the next four years as a consultant during a transition period.

Sterling was a lifelong Gloucester resident — he lived a mile from where he grew up — and former county supervisor whose Gloucester Seafood plant sat on an acre on picturesque Aberdeen Creek off the York River.

Sterling, his friends, a family member and a commonwealth's attorney say, apparently never saw a con coming. It was a con that would quickly unravel and end up with lawyers sparring over the remaining scraps of a once-thriving seafood plant.

Three years later, Sterling is dead, the Georgia businessman, Clifton Odell Boyd Jr., ended up doing a short stretch behind bars and Sterling's estate is on the hook for nearly $1.2 million for failing to make any payments to a lender. Today, the Gloucester Seafood plant goes up for auction on the steps of the Gloucester County Courthouse to pay off a note Sterling co-signed.

It's a complex, cautionary tale illuminating the sub-prime commercial lending industry and the pitfalls of business deals consummated without sound legal advice.

In late 2003, Boyd had approached Sterling about buying Gloucester Seafood, according to court documents and people familiar with the business deal. Boyd, who is black, told Sterling he had money and connections in the financial world.

He was looking for businesses that were underachieving so he could buy them and make money off them. Boyd's business plan was to consolidate and revive seafood plants along the mid-Atlantic coast by winning government contracts weighted toward minority-owned businesses.

Boyd looked the part of a successful businessman, said Mike Sterling, George Sterling's 37-year-old son.

"On the surface at least it looked like he had adequate resources," Mike Sterling said. "Not every day in the seafood business a guy rolls up in a suit and a (GMC Yukon) and says, 'I have money.' That sounds like a good deal for a guy that's 60 years old standing on the back of a fish truck or crab truck in 90-degree heat. And that's my dad."

Hale Delavan, a Norfolk businessman who coincidentally bumped into Boyd during another business transaction involving a Richmond funeral home, saw Boyd's business plan. He thought it made sense, he said.

Boyd, who was later convicted in Gloucester Circuit Court of one count of obtaining real estate under false pretenses, said in a telephone interview that he is no con man. Boyd had formed a corporation, Viking Foods, to buy the stock in privately held Gloucester Seafood from Sterling.

On July 8, 2004, Boyd and Sterling co-signed a deed of trust from a Washington, D.C.-area commercial lender, Meadow Financial, for $380,000 — at 18 percent interest. Boyd said he got the money from Meadow Financial and had paid off two banks that Sterling owed money to when Sterling asked for another $50,000. That request came after Sterling had seen an appraisal of the property that came in higher than expected, Boyd said.

"That left me in a position that I didn't have enough to pay the stock," Boyd said. Sterling "wanted the property back and I couldn't give it back to him because I had debt on it."

When the deal fell through, Boyd moved to Chesapeake where his parents live.

"The remaining money I kept and to be honest with you, Meadow Financial entrusted me to keep it," Boyd said.

Walter Jackson, a Gloucester appraiser and longtime friend of Sterling, said Sterling had been asking him questions about refinancing leading up to the deal.

"I knew something was up," Jackson said. After speaking with Boyd, who wanted Jackson to appraise the property, "I told George, 'Something's wrong here,'" Jackson said. "I just didn't feel good about it."

In September 2005, a month after Sterling died of cancer, Delavan reached an agreement with Sterling's estate to take over operation of Gloucester Seafood. The business was subsequently moved — Delavan is still operating it — and Sterling's estate never made a payment on the note, going into default.

By that time, Boyd was in Gloucester Circuit Court after being indicted on a litany of charges, including writing bad checks, forgery and obtaining money under false pretenses. He pleaded guilty to one count of fraud, according to court records. A judge handed down a 20-year prison sentence, but suspended it provided Boyd reimburses the Sterling estate $80,000.

Boyd maintains he never intended to defraud anyone.

"I didn't go into business to destroy it, I went into business to resurrect it," he said. Sterling "changed the deal. You can't change the deal at the 11th hour."

Nevertheless, Boyd missed his first payment to Sterling's estate; he said he was seven days late but there was no grace period. In February 2006, he was jailed briefly in the Atlanta area on a probation violation. But he was released when he came up with the money — all $87,000 — to pay off his debt to the Sterling estate.

Boyd is vague about the source of the money, saying he has a business partner who provided a portion of it.

Gloucester Commonwealth's Attorney Bob Hicks believes Sterling made one mistake.

"If he had gone to an attorney, they never would have let him sign the stuff he signed," Hicks said.

Mike Sterling thinks his dad trusted the people and companies involved in the deal. Those include, Boyd, Meadow Financial and a lawyer, George Shapiro, who represented Meadow Financial and also Boyd and Sterling, according to court documents.

Shapiro did not return phone calls seeking comment.

"Bad things can happen to good people and the day of placing trust in people when it's a sizable transaction is long gone," Mike Sterling said. "And now you have to be skeptical, unfortunately, because that's where society has steered us toward. Now a lot of verbal agreements and a handshake don't mean anything."

Mike Sterling is a financial planner in Raleigh, N.C., who advises clients on matters similar to ones that ensnared his father.

"How ironic is that," Mike Sterling said. "I've been pretty much doing that for 15 years. And I could've helped my dad avoid this." – Daily Press,  Newport News, Va.