John Mills of Cabot, former president and chief executive officer of Affiliated Foods Southwest Inc., pleaded guilty Thursday in federal court in Little Rock to defrauding U.S.Bank of about $7 million in a check-kiting scheme before the wholesale food distributor went bankrupt last May.
Mills, 59, appeared before Chief U.S. District Judge Leon Holmes at 3 p.m. to plead guilty to a criminal information charging him with a felony count of bank fraud.
Mills, flanked by defense attorney Jack Lassiter of Little Rock, agreed that between Sept. 29, 2008, and Feb. 27, 2009, he and others “known and unknown to the U.S. Attorney” executed a scheme to defraud the lender.
Mills faces up to 30 years in prison and a fine of up to $1 million, or both. The U.S. Attorney’s office identified U.S. Bank as the sole victim and said the amount of restitution hasn’t yet been determined but the parties agreed that the amount of loss involved was less than $7 million.
Assistant U.S. Attorney Karen Whatley told the judge that the amount of checks kited totaled $11.5 million.
Affiliated Foods was a wholesale cooperative owned by its member grocery stores. It supplied grocery stores in Arkansas, Texas, Louisiana, Mississippi, Oklahoma and Tennessee. At its peak, Affiliated Foods had more than $800 million in annual revenue at its peak and more than 2,700 employees at its Little Rock warehouse and its retail grocery stores. The grocery stores were primarily Harvest Foods stores but also some Piggly-Wiggly and Sav-Mart stores.
Read tomorrow's Arkansas Democrat-Gazette for full details.
Thank you for coming to the Web site of the Arkansas Democrat-Gazette. We're working to keep you informed with the latest breaking news.