Loris gun company duped investors, ex-NFL player out of millions, they allege
Dozens of shareholders and investors, including a former NFL player, of a now-defunct Loris gun manufacturer are trying to recoup their losses after the company’s founder allegedly defrauded them out of millions, court records show.
A court-ordered arbitrator ruled earlier this year that Patrick C. Henry III, founder of Auto Mag Ltd. Co., owed the company and its investors more than $12.2 million after a forensic review found he was using company funds and assets for personal use and separate businesses, according to online court records.
Auto Mag was operating out of a warehouse at 4232 Meadow St. in Loris since 2015. That property is currently vacant, and it’s unclear when the company closed.
Henry could not be reached for comment.
The $12.2 million judgment came after Henry initially sued Scott Pyle, a Myrtle Beach-area financial advisor, and other shareholders for allegedly trying to steal his company and move it to Connecticut, court records show. Pyle and the other shareholders countersued for fraud, negligence and breach of fiduciary duty.
Henry eventually stopped participating in the litigation, leading to his claims being dismissed and the counterclaims against him being granted by default, according to court records.
Pyle did not respond to a request for comment.
Pyle and a group of other Auto Mag Ltd. shareholders and investors, including former Green Bay Packers running back Samkon Gado and his wife, are now separately suing Harold Kornblut, a Latta-based accountant who prepared and filed the company’s tax returns from 2015-2022, court records show.
Kornblut, whose CPA license remains active in South Carolina, did not return a request for comment.
Kornblut’s tax return filings didn’t accurately reflect Auto Mag Ltd.’s financial situation, and he improperly reclassified $6.75 million to debt from capital, the suit alleges.
A forensic review of the company’s finances found Henry was personally holding capital contributions meant for the company and intermingling its assets with Southern Ammunition, a separate company he founded operating at the same location with many of the same employees, court records show.
Once confronted, Kornblut admitted making mistakes and that he was unable to balance the company’s bookkeeping because of the comingled funds, according to a court filing.
If it wasn’t for Kornblut’s negligence, some investors wouldn’t have invested and others already involved with the company could have improved their tax positions by accurately reporting their losses, the suit states.
Henry has not faced any criminal charges for his alleged actions related to Auto Mag Ltd., and it’s unclear if anyone reported his actions to law enforcement.
