Testimony at ex-state legislator's corruption trial reveals bank loans totaling $87,000 in 2 years

Former Sen. Jon Woods, R-Springdale, left, is shown in this file photo.
Former Sen. Jon Woods, R-Springdale, left, is shown in this file photo.

FAYETTEVILLE — Former state Sen. Jon Woods had $87,250 in loans from Arvest Bank between 2012 and 2014, all guaranteed by someone else, according to financial records presented by the government at his trial.

Prosecutors continued Thursday to detail Woods’ financial dealings during the time he is accused of participating in a kickback scheme involving state grants.

Christy Cops, fraud research specialist for Arvest Bank, testified that the bank loaned Woods $30,000 in 2012 guaranteed by Richard Roblee and two loans of $25,000 each in 2014 guaranteed by James Phillips. Former state Rep. Jonathan Barnett of Siloam Springs co-signed a $7,250 car loan for Woods in 2012, Cops said.

Woods, a Springdale resident; Oren Paris III, former president of Ecclesia College in Springdale; and Randell Shelton, formerly of Alma, were indicted in March 2017. Paris pleaded guilty April 4 to one count of conspiracy and will testify for the government. Paris reportedly disguised the kickbacks as consulting fees paid to Shelton’s company, Paradigm Strategic Consulting. Shelton then passed money along, the government contends.

Defense attorneys have said the money transfers to and from Woods were loans and money to pay back loans.

Shelly Koehler of Fayetteville, one of Shelton’s attorneys, said Tuesday that Shelton has a long history of successful enterprises, including fundraising, and that the money paid to him by Paris was for consulting fees.

Former state Rep. Micah Neal of Springdale pleaded guilty Jan. 4, 2017, to one count of conspiracy. He admitted receiving two kickbacks, one in 2013 and one in 2014, totaling $38,000 in exchange for directing state grants to two nonprofit groups. His sentence is pending.

Woods is accused of taking kickbacks from Paris in return for directing $550,000 in General Improvement Fund grants to Ecclesia, all in 2013 or 2014.

The fund consists of state tax money left unallocated at the end of each fiscal year and interest earned on state deposits. Each legislator was given a share of the fund to be directed to a nonprofit group or government entity. The state Supreme Court declared this method of distribution unconstitutional in a ruling Oct. 5.

Neal testified Wednesday that he became involved in the kickbacks because he was having financial trouble and asked Woods how he made money. Woods said he had a deal worked out and came back to him a few days later with the kickback plan in which the two would receive 20 percent of any grant money steered to Ecclesia and another nonprofit, AmeriWorks, Neal said.

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Neal’s guilty plea included his taking kickbacks along with Woods for $400,000 in state grants to AmeriWorks. Neal said he received $20,000 delivered by Woods for steering $125,000 to AmeriWorks. Grant records show Woods directed $275,000 to the company.

AmeriWorks was incorporated by lobbyist Russell “Rusty” Cranford a day before it received the grants. The $400,000 from the 2013 grant was returned Aug. 14, 2014, after federal investigators questioned the company’s founder about the grants, according to Woods’ indictment.

Woods and Neal, both Republicans, then cooperated to use part of the refunded $400,000 to steer another $200,000 to Ecclesia in return for another kickback, the indictment says.

Cranford, 56, is set for trial June 11 in federal court in Springfield, Mo., on one count of conspiracy and eight counts of accepting bribes in an unrelated indictment.

Woods faces 15 counts of fraud, all relating to either wire or mail transfers of money. Paris and Shelton were named in 14 of the fraud charges. All three were charged with one count of conspiracy to commit fraud. Woods is also charged with one count of money laundering in connection with the purchase of a cashier’s check.

Read Friday's Arkansas Democrat-Gazette for full details.

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