A judgment has been entered in a civil lawsuit arising from allegations that an accountant embezzled more than $9 million from a Trumann manufacturing company.
Roach Manufacturing Corp., which produces industrial conveyor belts, claimed the company's accountant and adviser, Edward Cooper of Jonesboro, stole the money over a period of more than 20 years, allowing Cooper and and his now former wife, LaNita, to maintain a lavish lifestyle well beyond what they could afford on an annual combined gross income that never exceeded $70,000, according to their tax returns.
"They regularly traveled," according to one pleading filed on behalf of Roach. "They bought jewelry and furs. They exercised no restraint over a period exceeding twenty years in living and spending like millionaires, using money stolen from Roach."
More than $2 million went into the construction of a cabin on the Spring River in Fulton County, according to the court filings.
Circuit Judge John Fogleman of Marion signed the final judgment Monday for Roach Manufacturing against Cooper for $9,009,879.34 plus interest at the rate of 5% annually, or $1,234.23 per day.
Roach had filed the lawsuit more than a year ago in Craighead County Circuit Court, claiming that Cooper had stolen more than $4.5 million dating back to 2007, which was as far back as Roach executives could go with the bank records they had at the time.
They later discovered financial records going back to 1996 and documented an additional $4.5 million that the company says Cooper stole. As a result, Roach filed an amended complaint and added Cooper's wife as a defendant. A motion by Roach dismissing LaNita Cooper from the lawsuit was approved by the judge Tuesday.
LaNita Cooper filed for divorce from Cooper in December. Roach intervened in the divorce. In a memorandum of understanding reached in the divorce, which was finalized Sept. 6, the Coopers agreed to turn over the Fulton County property to Roach "in partial satisfaction of the judgment against the husband in the civil case."
The divorce decree also released LaNita Cooper and the couple's four children from any claims relating to the case.
Cooper's relationship with Roach dates to the 1980s through his employment at an accounting firm Roach had used since the company's founding in 1969.
Cooper managed the accounting of the Roach business through his employer and had become a "trusted fiduciary of Roach upon whom Roach extensively trusted and relied," according to court pleadings.
The payments to Cooper were uncovered a few months after Katelyn Furnish was hired as the financial manager for Roach in October 2017 and began performing some of the day-to-day bookkeeping and accounting duties Cooper had performed, according to the initial lawsuit.
After Cooper kept promising but never delivering bank statements she needed to reconcile statements in-house, Furnish began reviewing monthly statements online from the bank. While attempting to identify an imbalance she discovered in May 2018, an April 2016 check payable to Cooper for $39,947.59, the lawsuit said.
The signatures of the company's president and secretary/treasurer appeared to have been forged, Furnish said in an affidavit. Both said they hadn't signed the check nor had they authorized anyone to sign a check to Cooper in any amount.
An audit uncovered 70 checks made payable to Cooper totaling $4,539,080.36 and deposited into his personal checking account. The additional financial records brought the total checks made out to Cooper between 1996 and 2018 to 135.
"Given the liberal access to all things financial at Roach enjoyed by Ed Cooper, the actual extent and duration of the fraud and theft is unknown at this time," according to the amended complaint.
It was unclear Thursday whether Cooper will face criminal prosecution. A spokesman for Prosecuting Attorney Scott Ellington said the matter has been referred to the U.S. attorney's office for the Eastern District of Arkansas.
Assistant U.S. Attorney Allison Bragg declined to say whether her office is investigating, noting only that Cooper hasn't been indicted or charged.
"We can neither confirm or deny the existence of an investigation or the lack thereof," she said.
An attorney for Cooper, Jared Woodard of Jonesboro, didn't reply to a telephone message Thursday requesting comment.
Roach doesn't expect to recover anything close to the $9 million that it documented Cooper stole, the company's attorney, David Wilson, a partner in the Little Rock law firm of Friday, Eldredge & Clark, said Thursday.
"Nowhere near it," Wilson said. "He spent most of the money."
To date, the company has recovered $500,000 in cash from various accounts, he said. The Coopers also turned over the Spring River property and other "hard assets." "We don't know the value of that yet."
As for the cabin, Wilson called it a "no-expense-spared vacation resort."
"I wouldn't call it a cabin, I would call it a palace," he said. "I don't know who will pay for what he spent over in Fulton County, but maybe somebody will."
Business on 10/04/2019