LITTLE ROCK — Garret Sorensen, a former vice president of advertising for USA Drug, was sentenced Monday to 33 months in prison for his May 2 guilty plea to federal charges accusing him of bilking the company over a two-year period.
Just minutes before an expected month-long jury trial was to begin, Sorensen entered guilty pleas to single counts of mail fraud and money laundering in exchange for prosecutors dropping other charges against him and all charges against his wife and her pregnant sister.
Sorensen, 43, admitted that he defrauded the company - which hired him largely because he was a fraternity brother of one of the owner’s sons - by quietly setting up his own company to handle the chain’s insert and direct mail advertising from 2005 through 2007.
By funneling the advertisements through MMM, a company he formed with his wife, Katherine “Katie” Sorensen, and her sister, Shannon Walters, Sorensen made about $500,000 in profits. Prosecutors said about half of the profits benefited the Sorensens directly, as evidenced by purchases of a boat, a Jeep, a Rolex watch and a Chevrolet Suburban.
A large crowd of supporters gathered Monday afternoon in U.S. District Judge Bill Wilson’s Little Rock courtroom to show support for Sorensen, who some supporters say was unfairly targeted for merely trying to participate in the “culture” that existed among USA Drug executives.
From a courtroom lectern, Sorensen told Wilson, “I never should have formed a related company without Steve [LaFrance] Sr.’s approval.”
He said he was sorry for the pain his actions have caused his family, including his wife of 17 years, their three children, his sister-in-law, and the LaFrance family - who pursued a civil lawsuit against him in Pulaski County Circuit Court to recover the funds, but dropped it after his guilty plea because the plea will require him to pay restitution.
Because of the complexity of determining how much restitution is due, partly because insurance companies covered part of the loss, Wilson said he will issue a separate order, probably within a week or two, setting the amount of restitution that Sorensen must pay.
Defense attorney Ted Boswell of Bryant asked the judge to allow Sorensen to avoid prison and serve a strictly probationary sentence that would allow him to keep working, to continue providing for his family. A probation officer, Eric Myrene,testified that Sorensen owns a flooring business with his wife and a home-renovating business with his brother-in law, and provided estimates of the profits he expects to realize from both in the near future.
Taking into consideration Sorensen’s lack of a criminal record, as well as the amount of fraud involved and his abuse of a position of trust, federal sentencing guidelines recommended imprisonment of 33 to 41 months, to be followed by probation for one to five years.
Boswell argued that the length of time the case has hung over the heads of the Sorensens and Walters, the extra publicity placed on all three as a result of contentious side issues, and the financial burden of defending both criminal charges and a civil lawsuit justified a probationary sentence instead of prison.
He also argued that Sorensen is a hard worker and a good father and has performed “outstanding” volunteer work. Boswell said that Sorensen’s business provided legitimate services for USA Drug and that he “was considered a shining star by everyone, including in the LaFrance family,” until he made the “mistake” of failing to formally ask the senior LaFrance for authority to handle the advertising through his own company.
“What do you think it was that caused a star in the company to start bilking employees?” Wilson asked.
“I think it was the culture he was in,” Boswell replied. “It was the desire to make more earnings. There was a culture that you made money from all sources.” He said Stephen LaFrance permitted his two sons, who were officers in the drugstore chain, to use their positions with the company to make additional profits for themselves.
Assistant U.S. Attorney Tricia Harris saw the situation differently, telling Wilson that Sorensen has close family ties, was provided a good education and was given opportunities to do well, including being hired by the senior LaFrance and regularly promoted and given raises.
But after being promoted to vice president, a position involving little supervision, “he was in a position to defraud the company - and that’s what he did.”
She noted that he did it “for two years” and that his plan “was well thought-out,” involving the establishment of a post office box and a special bank account.
“I’m concerned about whether Mr. Sorensen isn’t making an excuse,” she said, referring to Boswell’s “culture” explanation.
“He did not have authorization to do this,” Harris said. “This ‘dear friend’ of Stephen [LaFrance] Jr. turned around and cheated on them for two years. ... He saw his college friend making a whole lot of money, and he wanted his share of it. Instead of asking for more, he defrauded the company.”
She asked Wilson to sentence Sorensen within the guideline range.
The side issues that generated substantial publicity involved the civil case that the LaFrances filed in circuit court to recoup their money from Sorensen. A dispute over taking the younger LaFrance’s deposition led Wilson to sanction an attorney for the LaFrances and order him to pay $10,000 of Sorensen’s legal fees.
Wilson also fined the U.S. attorney’s office $4,000 for interfering in the state-court civil case, but he withdrew the penalty in June after U.S. Attorney Chris Thyer apologized and promised not to take such actions again.
On Sept. 19, Pulaski County Circuit Judge Wendell Griffen also sanctioned the U.S. attorney’s office for interfering in the state case, ordering them to pay $4,100 of Garret Sorensen’s attorney fees, $3,292 for Shannon Walters’ attorney fees and $5,240 of Katie Sorensen’s attorney fees.
An attorney for Katie Sorensen said Monday that she thinks it was unfair of prosecutors to indict either of the women in the first place.
“I’m not saying Garret’s innocent,” she said, “but the process of indicting spouses and family members, when they’re not the clear-cut person responsible for something. ... It makes me question the voluntary nature of pleas.”
Arkansas, Pages 7 on 10/02/2012