A Virginia lawyer who helped establish a federally sponsored toy factory on Grenada pleaded guilty yesterday to charges of conspiracy to defraud the U.S. government in obtaining funds for the venture.

Scott Reed, 31, a Virginia Beach attorney, pleaded guilty in a federal district court in Norfolk to charges that he conspired to give false financial information to the government for a loan to start an industry on the economically depressed Caribbean island.

He is the second partner in the Virginia-based toy manufacturing business to admit to his role in a scheme that federal prosecutors say may ultimately cost taxpayers $525,000 in unpaid loans and legal fees.

Federal lawyers said they are continuing their investigation of allegations that federal funds may have been diverted from the Grenadian project to the company's partners and business subsidiaries operating in Virginia.

Government officials describe the venture as a case of capitalist enthusiasm gone sour. When the Reagan administration called on American businesses to help the island after the 1983 U.S. invasion, Virginia Beach toy maker William H. Ingle was one of the first to respond.

Last month Ingle, the president of Ingle-Grenada Ltd., pleaded guilty in Norfolk to charges that he defrauded the government in obtaining a loan from the Overseas Private Investment Corp., a federal agency that provides financial assistance for American business in developing countries.

Ingle, 60, transformed a basement toy-making hobby into a major manufacturing operation with retail stores in Norfolk and Williamsburg.

Ingle and Reed admitted in court papers that they lied to obtain the loan from OPIC by telling agency officials that the company had sufficient collateral to match the government's $350,000 loan. When the business collapsed in late 1984 just months after it opened, officials discovered that a $200,000 certificate of deposit used by the company for collateral had been pledged previously as collateral on a loan to a Virginia Beach builder.

The case surrounding the short-lived Ingle-Grenada Ltd. is the first criminal prosecution involving funds from the 15-year-old federal agency, officials said.

Ingle and Reed, who was vice president of the toy company, could receive prison terms of up to five years, maximum fines of $10,000 or both, according to Assistant U.S. Attorney Robert J. Seidel Jr. Both men also could be ordered to make restitution to the government, Seidel said.

Neither Reed nor his attorney could be reached for comment yesterday.

Ingle's attorney has said his client and Reed "felt they'd never be found out . . . . They felt like they had such a good deal and the profit would be such they were never going to need the $200,000."

"A lot of the money that went to the company went into other Ingle-related industries not directly connected with the development in Grenada," Seidel said yesterday.

Seidel said Reed's attorney argued in federal court yesterday that the funds, including $44,000 paid directly to Reed, were "to build a network" for the distribution of the toys in the United States.