A judge on Thursday informed Gary Rickenbach, a former executive vice president at One Bank, that she won't accept his conditional plea agreement, negotiated in November, that would let him serve a two-year probationary sentence in lieu of prison time.
Rickenbach, 58, faced charges of conspiracy, bank fraud, aiding and abetting a false bank entry and making a false statement until he entered the conditional plea to a charge of misprision of a felony, or being aware of criminal wrongdoing but failing to report it.
The plea agreement allows Rickenbach to withdraw the guilty plea and proceed to trial if a judge doesn't accept it, or to continue with it and possibly face a longer sentence than agreed upon.
Meanwhile, a bank fraud trial for Rickenbach's two co-defendants, both of whom he had agreed to testify against in exchange for leniency, remains scheduled to begin Monday in a Little Rock federal courtroom.
U.S. District Judge Kristine Baker told Rickenbach in a hastily arranged hearing Thursday afternoon to decide by a second hearing scheduled for 9:30 this morning whether he wants to withdraw the plea or leave it in place without an agreed-upon sentence.
In anticipation of the judge's refusal to accept the agreement, First Assistant U.S. Attorney Pat Harris said Thursday that he had prepared a new plea agreement. Rickenbach and his attorney, Bill James of Little Rock, showed up in court Thursday to enter a new plea, presumably to the newly drawn-up agreement, the details of which weren't publicly disclosed. But Baker wanted to give Rickenbach time to consider his options after she officially informed him that she wouldn't approve his earlier agreement.
In today's hearing, Baker is also expected to address a request to delay next week's trial that was filed on behalf of Rickenbach's co-defendants, Michael Francis Heald and Bradley Stephen Paul. Heald, former chief operating officer of the bank, and Paul, a former executive vice president at the bank, both face two conspiracy charges and two charges of making false entries to deceive bank regulators.
Their attorneys, Gary Corum of Little Rock for Heald, and Lloyd "Tre" Kitchens of Little Rock for Paul, argued in a 23-page motion filed shortly before Thursday afternoon's hearing that they were having a hard time preparing for trial because of "key material details of recent developments" which haven't been shared with them. The attorneys said they were also uncertain about how to proceed until the judge had ruled on Rickenbach's pending plea agreement.
"The mystery surrounding the Government's conduct in connection with its Rule 11(c)(1)(C) conditional plea agreement with Mr. Rickenbach has grown ever murkier and more alarming," they wrote, referring to the rule of criminal procedure under which Rickenbach's plea agreement was negotiated.
The motion cited "the very real possibility, indeed probability, ... that the Government has engaged in misrepresentations designed to cover-up its own machinations in furtherance of its prosecution of Heald and Paul." It said, "So far, the full extent of the Government's machinations remains unknown because crucial aspects of the Government's dealings have not yet come to light, and some of the crucial information about its representations has been filed under seal, without Court authorization."
The defense attorneys asked for the court's assistance with identifying and exposing facts that they believe indicate the government has "misrepresented the true state of affairs in connection with its dealings with Mr. Rickenbach."
The motion complains that "significant actions and events have occurred secretly, under seal," and referred to Rickenbach's conditional plea agreement as "the Rickenbach plea debacle." They cautioned that "This case must not be litigated in secret."
Rickenbach was indicted in 2014 on charges of conspiracy and money laundering, accused of participating in a scheme to hide from regulators a $1.5 million loan to a Florida borrower who never paid the loan back. Heald, Paul and Tom Monroe Whitehead, a former chief financial officer at the bank, were added to the indictment in 2015. However, federal prosecutors dropped all charges against Whitehead in December after he agreed to cooperate with the government.
The charges against all the men stem from their days working for the former owner of the bank, Layton "Scooter" Stuart, who is now deceased.
Shortly before Stuart died, federal regulators demanded that he resign as chairman and chief executive officer of the bank, and the government filed a petition against him to have $18 million worth of his assets turned over to the government as "the fruits and derivatives of criminal activity."
The bank agreed in 2014 to accept more than $3 million in a partial settlement of the case.
Metro on 07/08/2016