Steven Alan Standridge, a Mount Ida man who owned, operated or managed various independent insurance agencies in Arkansas, was sentenced Friday to five years in prison and ordered to pay nearly $7.1 million in restitution to the victims of two sophisticated schemes he admitted carrying out in 2010.
The Montgomery County man pleaded guilty in July to a wire-fraud charge he faced in the Western District of Arkansas and a money laundering charge he faced in the Eastern District. The latter case was transferred to the Western District so that the cases could be jointly resolved.
If he had gone to trial and been convicted, Standridge, 58, faced up to 30 years in prison and a fine of up to $1 million, as well as the restitution.
On Friday, U.S. attorneys for both districts, along with the chief regional agents for the FBI and the IRS, announced that Standridge was sentenced by U.S. District Judge Susan O. Hickey in Hot Springs, which is in the Western District.
Conner Eldridge, U.S. attorney for the Western District, said Standridge "carried out several schemes to defraud, resulting in multimillion-dollar losses to a company that is a vibrant part of the Hot Springs community and to other businesses and individuals."
Standridge "used his standing in the community to deceive and defraud both individuals and hometown banks out of millions of dollars," Chris Thyer, U.S. attorney for the Eastern District, said in the announcement.
According to court documents in the Western District case, in which Standridge was indicted on 23 charges, he admitted falsely telling the president of a Hot Springs corporation that his insurance company, SSI, was buying two insurance agencies, and that he had obtained bank loans for the purchases. The corporation gave him $2.7 million to purchase the agencies with the promise that the loans would be repaid with the proceeds from the bank loans.
According to the documents, SSI, which stood for Steve Standridge Insurance, hadn't actually arranged for any bank loans, and the purported purchase of the two agencies was fictitious. Standridge admitted using the $2.7 million in loan proceeds from the Hot Springs corporation for other purposes.
In the Eastern District case, where Standridge faced 12 charges if he had gone to trial, he was accused of conspiring with two other men to commit bank fraud by arranging for their companies to obtain premium finance loans, which are made to insureds to cover the cost of insurance premiums. The insurance policy purchased with the loan proceeds serves as collateral for the loan, according to the officials.
Standridge admitted that he either purchased the policies that were to be collateral for the loans and then later canceled the policies, or never purchased the policies listed on the finance agreements. Again, he admitted using the proceeds of the bank loans for other purposes.
The amount of restitution that Hickey ordered Standridge to pay totals $7,096,417.35. It includes $2.7 million he owes in the Western District case and $4,396,417.35 he owes in the Eastern District case.
Arkansas Insurance Commissioner Jay Bradford said in the announcement that several divisions in his office worked with the federal agencies and the U.S. attorneys' offices to investigate the complex case.
In the Eastern District case, the two men accused of conspiring with Standridge to commit bank fraud pleaded guilty in 2012 to aiding and abetting bank fraud. One of them, Danny Wood of Idabel, Okla., was sentenced to 21/2 years in prison and the other, Gregory A. Hunt of Russellville, was sentenced to 33 months in prison.
Metro on 12/06/2014