Family says embezzlement cut deep

Jun. 4—For years, Chad Gragg thought his family business wasn't making much money.

He and his brother, Neal Gragg, could barely pay the bills as the businesses their family owned, Buffalo Creek Nurseries Inc. and Robert M. Gragg & Sons Nursery, seemed to teeter.

"We went for several years there when we were struggling, me and my brother were living off what ... our wives made. I wasn't receiving a check because, you know, I had to take care of my employees. Without your employees, you don't have a company," he said.

Then, just over two years ago, in May 2019, Gragg received a call from someone at his bank who asked to speak to Gragg's office manager, Richard Clark, and said that new checks he had ordered had come in.

Gragg became suspicious because that account was supposed to be closed.

He called a friend at the bank and asked for a bank statement, and when he saw it, "I knew right then that something was up."

The bank statement showed $30,000 in checks that Clark had written to himself, forging Gragg's signature.

Ultimately, Clark, 55, of Lenoir, was accused by investigators of having embezzled more than $1 million from the Gragg family.

They were stunned. Clark had worked for the family for more than six years, and Gragg said Clark was more than an employee to them.

"He was like part of the family. I've known Richard ever since he was a young boy. He grew up in Collettsville, and he went to school with my brother who is younger than me. ... I loved him just like a brother," he said.

Clark pleaded guilty Thursday in U.S. District Court in Charlotte to one count of mail fraud, which carries a maximum prison term of 30 years in prison and a $1 million fine; one count of money laundering, which carries a maximum penalty of 20 years in prison and a $500,000 fine; and one count of making a false statement on his tax return, which carries a maximum term of three years in prison and a $100,000 fine per count.

A civil lawsuit the Graggs filed against Clark in Caldwell Superior Court a few weeks after his arrest indicated that Clark's misdeeds began in mid-2016. The nurseries moved their business offices from 1641 Riverside Drive in Yadkin Valley to 3715 Collettsville Road, and Gragg told Clark to close the Buffalo Creek Nurseries checking account at Capital Bank because he had opened a new account at First Citizens Bank.

But Clark did not close the Capital Bank account, and he told some of Gragg's customers to mail checks to the Riverside Drive address, where he picked them up, endorsed them for deposit, and deposited them into the old account at Capital Bank, the lawsuit said.

Clark also wrote checks to himself and others from that account and forged Gragg's signature, the lawsuit said.

Clark also had the responsibility of withholding taxes from the wages of the nurseries' employees, but while he withheld the taxes he failed to pay them to the North Carolina Department of Revenue and the Internal Revenue Service, instead keeping them himself, the lawsuit said.

According to the U.S. Attorney's Office in Charlotte, Clark used the stolen money to pay for his personal lifestyle, including to make payments for his home mortgage, a Ford F-150 truck and other vehicles, to install a home theater system, and to pay for traveling and shopping expenses.

Gragg said that the companies are still recovering from the tremendous financial loss they suffered. While prosecutors felt they could prove that Clark embezzled more than $1 million, he thinks it is possible Clark took even more.

"You have to go on. I mean, you can't dwell on it. We've moved forward, and fortunately for us, business has been really good the last couple years. We're slowly recovering. We're nowhere near back to where we should be. We're slowly getting there," he said.

While the lawsuit was settled, Gragg said his family hasn't yet received a penny. They expect to receive money from the sale of Clark's house, which was seized, as well as financial restitution when he gets out of prison.

Clark hasn't yet been sentenced. When the sentencing hearing is held, the Gragg family hopes to make a statement.

"Probably what hurt our family the most is knowing the fact that the week that we buried my brother Chris and nephew Cody (Gragg, who died in a wreck in 2017), he was writing checks out of the Buffalo company account and forging my name," Gragg said. "The money is one thing, but just the betrayal, ... that's the worst part, you know?"