story by Ryan Saylor
rsaylor@thecitywire.com
Former Northwest Arkansas real estate developer Brandon Barber plead guilty to three counts associated with his previous indictments on charges relating to fraud and his bankruptcy filing.
The charges Barber plead guilty to included the following felonies - conspiracy to commit bankruptcy fraud, conspiracy to commit bank fraud and money laundering. The maximum sentence for all charges is 45 years, with fines possibly maxing out at $1.5 million.
Barber, wearing an orange and white striped prison jumpsuit, appeared in federal court in Fort Smith with his attorneys, Asa Hutchinson and Asa Hutchinson III, to enter his pleas.
U.S. District Court Judge P.K. Holmes said sentencing would be determined in coming months, though the guidelines allow him to use his own discretion in determining an appropriate sentence and applicable fines.
"I'm not bound by them as long as they are reasonable," he told Barber.
As part of the plea deal, Barber will also be forced to pay restitution, though the victims have yet to be identified. He was also told by Holmes that he would have to forfeit certain assets and finances as a part of the agreement. Those terms have not yet been determined. The remaining 24 counts were dismissed, though Holmes said
By pleading guilty, Barber avoided what was sure to be a lengthy trial that involved five other co-defendants who with Barber were accused of a variety of charges.
When he was arrested in New York on March 20, Barber was charged with:
• Providing false and fraudulent financial information and statements to Legacy National Bank of Springdale in connection with loans to finance the Legacy Condominium building and project in Fayetteville;
• Providing false and fraudulent financial information and statements to Metropolitan National Bank of Little Rock and Enterprise Bank of St. Louis, in connection with loans to finance the Bellafont project in Fayetteville;
• Concealing assets and income from creditors and the bankruptcy court by transferring funds to Van Doren and Knight or accounts controlled by them and using those funds for Barber’s personal benefit and expenses; and
• Falsely and fraudulently representing purchase prices for real estate to First Federal Bank of Harrison, Ark., to obtain loan amounts exceeding the actual purchase prices and thereby generating excess cash without the Bank’s knowledge or approval.
The charges spanned allegations that occurred from 2005 to 2009.
The charges Barber plead guilty to today were an admission from Barber that he participated in the following illegal activities, according to the United States Department of Justice:
• Conspiracy to Commit Bankruptcy Fraud: Beginning in April 2008 and continuing through Nov. 9, 2010, Barber reached an agreement with K. Vaughn Knight and James Van Doren to conceal and disguise income and funds belonging to Barber in order to hide those funds from creditors;
• Conspiracy to Commit Bank Fraud: From around Aug. 2008 to around Dec. 2008, barber conspired with Jeff Whorton, Brandon Rains, David Fisher and others to defraud First Federal Bank. The parties falsely and fraudulently represented the purchase prices of certain lots known as "Executive Plaza" to be higher than the actual sales prices in order to obtain higher loans from First Federal Bank; and
• Money Laundering: Barber engaged in money laundering when he conducted monetary transaction of criminally derived property through a financial institution. …Barber had agreed with Van Doren and Knight to conceal certain income and transactions from the bankruptcy court.
The damages resulting from the charges Barber plead guilty to have not yet been accurately determined, said U.S. Attorney for the Western District of Arkansas Connor Eldridge, though he said today's hearing was a first step in concluding a large-scale case of white collar crime.
"This is a significant step in bringing several individuals involved in committing fraud, including fraud on the federal bankruptcy court, to justice. This case indicates that we are serious about identifying, investigating, and prosecuting those who perpetuate fraud, swindle others out of money and engage in financial crimes."
FBI Special Agent in Charge Randall Coleman alluded to the assumed millions of dollars in damages that resulted from the charges Barber plead guilty to today.
"The number of creditors whom Mr. Barber defrauded through his illegal activities - as well as the number of banks who were threatened by his actions - is just staggering," he said. "In the end, Mr. Barber could not escape the mess he made by moving to New York. He ultimately had to come back to Northwest Arkansas and be held accountable for his actions. I commend the special agents and prosecutors for their important roles in this investigation."