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March 14, 2011

Ex-concrete company owner sued

By The Mainebiz News Staff

The U.S. Department of Labor is suing the former head of now-defunct Gagne Precast Concrete Products in Veazie for inflating the value of the company's stock and stealing $1.1 million.

According to the suit, Stephen Thomas, now reportedly living in York, Pa., used inaccurate information to inflate the value of the company's stock when he bought the company in 2005, according to the Bangor Daily News. Thomas bought the company with $3.9 million in loans in a buyout that included the creation of an employee stock ownership plan. Between 2005 and 2008, he allegedly stole more than $1 million by authorizing inflated payments to other businesses he owned, withdrawing cash from Gagne's corporate accounts and using the payroll system to give himself an increased salary. Bangor Savings Bank seized the company's assets in 2008, after it defaulted on a $5.5 million line of credit used to refinance loans.

Between 15 and 25 people lost their jobs, as well as whatever their stock would have been worth, according to the paper. The suit seeks restitution for employees' losses through the stock ownership plan and asks the court to bar Thomas from serving as a provider for a benefit plan through the federal Employee Retirement Income Security Act. The suit was filed last month in U.S. District Court for the Middle District in Pennsylvania.

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