Although federal prosecutors dropped mail-fraud charges against former state Treasurer Martha Shoffner in November, they want to use the allegations behind the charges to increase her sentence on unrelated extortion and bribery convictions for which she was tried before a jury.
"This information can be properly considered by the Court for sentencing purposes, and should be part of the [presentence report]," Assistant U.S. Attorney Jana Harris wrote in a response, filed Monday, to Shoffner's May 1 objections to the report, which has not been made public and recommends a prison term of 15 to 19 years. Such reports are routinely prepared by federal probation officers, following a presentencing investigation, to assist the court in determining a sentence.
No sentencing date has been set for the 70-year-old Newport resident, who was in her second term as state treasurer when she resigned on May 21, 2013, just days after her arrest on bribery and extortion charges as a result of an FBI sting operation carried out at her home. FBI agents sent a cooperating witness, secretly wired with audiovisual recording equipment, into Shoffner's house with a pie box containing $6,000 in addition to the pie, and she accepted it. The witness -- bond broker Steele Stephens -- later testified she had accepted $6,000 cash payments on five other occasions, as well, though not all the deliveries were in pie boxes.
After a trial in March 2014, jurors convicted Shoffner of all 14 charges she faced for accepting $36,000, in $6,000 increments, from Stephens between mid-2010 and her May 2013 arrest in return for using her official position to steer an unusually large share of the state's bond business to him. Stephens testified that he made about $2.5 million in commissions off the roughly $2 billion worth of bond-trading business he did with the state between August 2009 and December 2012.
Though given immunity from federal prosecutors in exchange for his testimony, Stephens was recently fined $20,000 and his securities license was revoked by the Arkansas Securities Department, which alleged that he sold unsuitable securities to the treasurer's office.
Shortly before her trial in the bribery and extortion case, prosecutors added 10 mail-fraud charges alleging that Shoffner had used $9,800 in 2009 campaign funds in 2010 to pay off personal credit card debts. U.S. District Judge Leon Holmes separated the two sets of allegations into two trials, with the second trial scheduled to begin Dec. 1.
The trial was called off after Shoffner's attempt to plead guilty to a single charge fell through when she couldn't admit that she had planned, while soliciting campaign funds, to use any leftover amounts for personal expenses. Shortly after the plea attempt fell through, U.S. Attorney Chris Thyer asked to dismiss all the mail-fraud charges, citing the resources needed to pursue a second trial and the penalty range Shoffner was already facing for her trial convictions.
In the motion to dismiss, filed Nov. 25, Harris said that "the appropriate course of action is to present evidence of the defendant's conduct" alleged in the mail-fraud case at her sentencing on the other charges on which she was tried. Thyer said Shoffner's potential conviction on the mail-fraud charges would have "minimal impact" on the penalty range recommended in the bribery case, citing that as another reason for dismissing the mail-fraud charges.
In the sentencing memorandum that Shoffner's attorneys filed May 1, they disputed the sentencing calculations of the probation office and said that a sentence of 41 to 51 months would be "more appropriate" under the guidelines. But they said a "departure" from even the lower guideline range would be better, suggesting a sentence of 12 to 18 months, divided between a halfway house and home detention with community service.
Addressing defense attorneys' objections to a statement in the presentence report that Shoffner "was aware that she was committing a crime," Harris said the jury verdict supports that statement. She noted, "The surreptitious manner in which the payments were provided to the defendant, the use of a drop phone to communicate with Stephens, her disposal of the drop phone when she became aware of the FBI investigation, and the defendant's statements and demeanor during the recorded meetings with Stephens demonstrate her awareness of the wrongfulness of her arrangement with Stephens."
Harris wrote that while Shoffner wants her sentencing guideline range calculated on a dollar amount of $36,000, the total of the payments from Stephens, "the United States submits that it should be $1,714,889, the amount of commissions Stephens received after he began bribing the defendant."
The federal prosecutor argued that the commission payments are a "reliable" way to calculate Stephens' benefit from his arrangement with Shoffner.
Under sentencing guidelines, an amount between $1 million and $2.5 million warrants a 16-level enhancement.
"The benefit Stephens received should not be ignored simply because his monetary benefit is greater than the defendant's monetary benefit," Harris wrote. She argued, "While it was not a violent offense and the defendant's monetary benefit was not in the millions, it is an offense that violated the public trust and the integrity of a statewide elected office. It also was not a one-time occurrence. It is conduct that spanned from at least mid-2010 until mid-2013. The defendant did not voluntarily end the conduct. The conduct ended only because the arrangement was discovered by the FBI."
Harris also argued against giving Shoffner a break in her sentencing because of the extensive publicity she has endured, noting that a reduced sentence shouldn't be given "because she is embarrassed or feels shamed by her dishonest conduct."
In response to numerous letters sent to the court by people seeking leniency for Shoffner and mentioning good deeds she has done in her lifetime, Harris said, "the evidence presented at trial also shows her character when she believed no one was looking."
She referred the judge to a transcript of recordings Stephens secretly made while talking to Shoffner in January 2013, when she learned the FBI was investigating and they agreed to maintain that "no cash" changed hands. At one point, Shoffner says, "We got it straight. No cash."
In sum, Harris wrote that Shoffner knew she was engaging in illegal conduct "and tried to cover it up," that her criminal conduct spanned a period of years and that "she was a statewide elected official who betrayed the trust of the citizens ... and did so for a mere $36,000." She said the 15- to 18-year sentence range recommended by probation officers is correct, while defense attorneys' proposed sentence "is too low for the conduct in which she engaged."
It wouldn't deter others from similar conduct and "may give the perception that public officials are above the law in terms of punishment," Harris said.
Metro on 05/19/2015