The founders of bankrupt Turner Grain Merchandising in Brinkley face felony charges after being served warrants Thursday regarding nearly $1 million in hot checks issued during the final days of their company.
The firm's closing in August 2014 left farmers across the state being owed millions of dollars for grain, primarily rice, that was delivered to Turner Grain and then sold to other buyers.
The charges against Jason Coleman, 42, now of Greenbrier, and Dale Bartlett, 48, of Marvell come just days before the state's three-year statute of limitations on filing such charges expires.
Bartlett and Coleman founded Turner Grain in 2002 to buy and sell grain, and the company grew over the years to include grain bins along a railroad spur and a trucking company to pick up and deliver grain.
An arrest warrant for Coleman was served at 11:12 a.m. Thursday at the law offices of Ballard and Ballard in North Little Rock. Coleman was charged with six felony counts of violating Arkansas' hot-check law and one count of felony theft of property by deception.
The warrant for Bartlett was served at 3:17 p.m. Thursday at the law offices of Hosto and Buchan in Little Rock. Bartlett was charged with one felony count of violating the hot-check law.
Both were released on recognizance bonds and were to appear Friday morning in Brinkley District Court, but a judge recused because of "various professional associations" with potential witnesses, Jeff Rosenzweig, a Little Rock criminal defense attorney representing Coleman, said Friday.
Another hearing has been set for Tuesday morning in Monroe County Circuit Court in Clarendon, Rosenzweig said.
"We'll plead not guilty," Rosenzweig said of Coleman. "We have a valid defense to these charges and we fully expect to be exonerated."
Reached by telephone Friday afternoon, Bartlett said his signature on the check at issue had been forged and that he was about to walk into the Brinkley Police Department to file a police report.
Turner Grain was closed down in August 2014 after inspectors with the U.S. Department of Agriculture found no grain in bins, contrary to certifications signed by Turner officials. The inspection came just days after talk circulated through the small farming community that Turner Grain checks were being returned by banks.
Many farmers were never paid, or were paid with checks returned for insufficient funds. In some cases, Turner allegedly was owed money by other grain buyers at the time it closed. Many of those disputes are tied up in lawsuits in state and federal courts.
Within two months, the parent company, Turner Grain Merchandising Inc., filed for Chapter 11 bankruptcy (later converted to Chapter 7), listing $23.8 million in debts and $13.8 million in assets. The debts later were amended to nearly $47 million. Farmers alone have filed claims seeking more than $40 million.
Turner reported gross sales of $235 million in 2014, according to the bankruptcy filing.
Rosenzweig declined to be specific about his defense, but Coleman's attorneys in a Lonoke County civil case, Andrew and Lisa Ballard, argued earlier this year in a hearing that Coleman was ill during Turner Grain's final months and that checks were being stamped and issued in his name without his consent or knowledge.
The Ballards didn't return telephone calls for comment, and other lawyers involved in civil lawsuits declined to comment.
Bartlett's charge is tied to a $401,900 check written to David and Lain Wilkison of near Brinkley for 50,000 bushels of medium-grain rice. The check later was returned by the bank for insufficient funds. Under the law, that is a Class B felony, punishable by five to 20 years in prison and a fine of up to $15,000.
Bartlett also has said in various depositions in the past two years that he, though he was president of the company, was forced out of the business months before it closed.
In addition to the Wilkison check, Coleman's arrest on Class B felony charges stemmed from:
• A returned check for $300,000 written to K&K Farm Services of Carlisle, as partial payment for about 250,000 bushels of rice.
• Three bounced checks -- for $67,932, for $200,000, and for $250,000, written to Delta Grain Marketing and Triple J&K Trucking, which delivered some 75,000 bushels of grain to Turner.
Coleman also was charged with a lesser Class D felony for a $4,300 check to Kevin, Bert and Rena McKenzie for wheat. The check was returned by the bank because it was written on an account that was closed between the time the check was written and deposited. He also was charged with felony theft by deception in that case. Conviction on each Class D felony is punishable by up to six years in prison and a fine of up to $10,000.
Bill Sadler, a spokesman for the Arkansas State Police, said the agency's only role in the case was to help the Monroe County sheriff's office and local prosecutors in filing affidavits in the case and to have its investigator serve the warrants. The state police's help was requested by Fletcher Long, prosecuting attorney in the area, and a deputy prosecutor, Baxter Sharp III. Neither Long nor Sharp returned telephone calls Friday.
Circuit Judge Dion Wilson of the state's 1st Judicial District signed the arrest warrants on Wednesday.
There has been no indication in federal or state courts whether the Turner Grain entities have any remaining assets.
Bartlett has filed for personal bankruptcy, listing $5.5 million in debts and $2 million in assets. Much of his personal estate -- real estate, guns, coins and vehicles -- has been auctioned, with proceeds going into his Chapter 7 bankruptcy account.
Closing Turner Grain's bankruptcy case in federal court is likely still years away, according to recent court filings there.
The trustee for the Turner estate in U.S. Bankruptcy Court, meanwhile, has filed more than 40 lawsuits seeking the return of some $110 million paid to Turner creditors or Turner Grain's own affiliates within 90 days of the company's bankruptcy filing. Such lawsuits are allowed, as a way to make sure some creditors aren't favored over others. Nearly $100 million of that is from Turner-related companies.
A separate lawsuit filed by the Turner bankruptcy trustee claims that Gavilon Inc., a Nebraska grain broker, took advantage of Turner's financial struggles and failed to pay at least $14 million for grain it contracted to buy from the Brinkley company.
A group of Lonoke County farmers that include K&K Farm Services have sued Turner Grain for $6 million. Trial on that lawsuit had been set for last month but has since been continued into next year. Turner Grain Merchandising Inc. itself isn't a defendant in the Lonoke County case because it is under federal bankruptcy protection.
The other defendants in the Lonoke County case are Coleman, Bartlett, and KBX Inc., a Benton grain dealer that did extensive business with Turner Grain throughout its history, including $104 million in payments to Turner Grain for rice from Oct. 14, 2013, to Aug. 11, 2014, about four days before Turner was shut down.
Another lawsuit is pending in Poinsett County, where Southern Rice and Cotton in Harrisburg has sued Coleman, Bartlett and Turner Grain for $3.2 million.
A Section on 07/29/2017