Judge asked to deny former Arkansas senator's bid to toss charges

Former Sen. Jeremy Hutchinson is shown with federal prosecutors' response to his motion to dismiss, filed Thursday.
Former Sen. Jeremy Hutchinson is shown with federal prosecutors' response to his motion to dismiss, filed Thursday.

Prosecutors said Thursday that a federal judge should deny former state Sen. Jeremy Hutchinson's request for dismissal of wire- and tax-fraud charges against him because his claims of government misconduct are false and fail to meet a stiff legal test.

Hutchinson's "manufactured claims, asserted in an effort to avoid the substance of the charges against him, fail," according to a filing by U.S. Attorney Cody Hiland's office in Little Rock.

Further, even if Hutchinson's allegations were true, the actions would not meet the high legal bar of "outrageousness" needed to dismiss charges, prosecutors wrote.

"Outrageous government conduct requires dismissal of a charge 'only if it falls within the narrow band of the most intolerable government conduct,'" federal appeals courts have ruled, according to the prosecutors.

The 50-page filing by prosecutors also reveals communications between Hutchinson with federal investigators and with his former girlfriend, who provided evidence against him.

Among prosecutors' allegations:

• That Hutchinson freely and voluntarily admitted violations of campaign finance and tax laws in an FBI interview.

• That Hutchinson acted as a confidential informant for the FBI between July 15, 2014, and Aug. 2, 2016, while also serving as a state senator.

Hutchinson undertook the informant role hoping for leniency "in an effort to receive consideration from the U.S. Attorney's Office regarding his criminal exposure" to bribery and other charges, prosecutors wrote in Thursday's filing.

Hutchinson's attorneys last month asked U.S. District Judge Kristine Baker to dismiss 12 counts of wire and tax fraud against him because "the government's missteps reveal a pattern of gross misconduct that require this court to dismiss the indictment with prejudice," that is, permanently. The defense asked alternatively for the judge to suppress any illegal evidence.

Hutchinson claims in his Feb. 7 motion that the government conducted an unlawful search of a laptop computer stolen by his former girlfriend, unlawfully destroyed evidence that would have supported Hutchinson's innocence and obtained a coerced confession.

Prosecutors said Thursday that's not what happened.

The former girlfriend, identified as Individual-1, gave the FBI in August 2012 two laptops, two cellphones and an external hard drive as potential evidence implicating Hutchinson in campaign finance and tax crimes, prosecutors wrote. She consented to a search of the devices, provided information about what the equipment contained and knew the passwords to operate them.

Several Hutchinson emails to Individual-1 recovered from the devices also referred to how he had provided her with computers and other electronic equipment, prosecutors wrote.

On June 19, 2012, for example, a Hutchinson email to Individual-1 said, "Did you tell them how much I had given you ... Did you tell them I've spent $300,000 on you (I'm sure they'd love that). Did you tell them you have 2 computers, 2 kayaks, 2 iPads, 2 phones."

In mid-2013, the FBI and U.S. attorney's office formally opened an investigation on Hutchinson, based in part on the material found on the various devices the senator's former girlfriend provided, Thursday's filing says.

At about the same time, FBI Special Agent Mike Lowe asked Hutchinson, who is an attorney and former deputy county prosecutor, "if he would voluntarily meet" at the FBI's Little Rock field office, the document says.

Hutchinson admitted in that interview on June 11, 2014 that he "did not keep proper records or receipts" in connection with his campaign, prosecutors wrote in their filing.

He "could not explain why he transferred money out of his campaign account into his personal account, and then spent the money on personal items."

Hutchinson also admitted "that he allowed Individual-1 to purchase a cruise from his campaign account, but later claimed he meant for Individual-1 to use his personal money for the trip."

Hutchinson went on to say he "screwed up" the campaign reports and that "I've screwed up a bunch, I have exposure," according to the prosecutors' filing.

Hutchinson volunteered to serve as an informant during that meeting, prosecutors' said.

Prosecutors said the FBI closed that investigation in early 2015, citing "insufficient evidence regarding bribery allegations and legislation."

A federal grand jury indicted Hutchinson, nephew of Gov. Asa Hutchinson and son of former U.S. Sen. Tim Hutchinson, R-Ark., on Aug. 30 on 12 counts of wire and tax fraud.

The charges accuse him of misspending campaign donations on personal items and under-reporting his income on federal tax forms.

The Little Rock Republican resigned his state Senate seat the next day as the indictment was made public. He subsequently pleaded innocent. He is free without bail.

Hutchinson also has been linked to a federal bribery investigation involving a Missouri-based nonprofit health care provider, Preferred Family Healthcare Inc., and former Arkansas lobbyist and Preferred Family executive Milton "Rusty" Cranford.

Cranford has pleaded guilty to paying bribes that, he said, went to Hutchinson, who is identified in that case's court records as "Senator A."

The pending tax and wire fraud charges against Jeremy Hutchinson do not include Cranford's accusations, and Hutchinson hasn't been charged elsewhere in connection with bribery.

Thursday's filing by prosecutors says that in their 2013 conversation, Lowe did show Hutchinson an email that referred to bribery allegations.

Hutchinson subsequently "admitted that: he was neither a productive nor efficient attorney despite the $20,000 per month he was being paid, but that he continued to be paid anyway; that this $20,000 per month was his sole source of income outside the legislature; and that the appearance was bad."

Hutchinson also "admitted to the agents that he failed to report this income on his taxes."

In arguing against dismissing the charges against Hutchinson, prosecutors also assert that the laptop search that Hutchinson's attorneys claimed was illegal -- saying the former girlfriend stole the computer from Hutchinson -- was in fact legal because the woman "not only claimed and which evidence corroborates was her own, but one which, even accepting the defendant's unsupported claims as true, he admits he abandoned."

If Hutchinson did own one or more of the computers at some time, he "relinquished any expectation of privacy in the devices when he abandoned them to his girlfriend," prosecutors say.

Responding to Hutchinson's claim that the FBI hurt his case by improperly destroying a forensic copy of the laptop and all other electronic evidence, prosecutors said that the disposal followed agency policy regarding evidence after a case is closed.

That disposal was "not in bad faith," prosecutors said.

Hutchinson's claims in his motion to dismiss are flawed when he says the FBI's promises of leniency in return for confessing his crimes rendered any confession involuntary. Because Hutchinson is an attorney and "admits he understood he did not have immunity from prosecution," he "freely and voluntarily" confessed, prosecutors wrote.

Only after Hutchinson confessed to certain crimes was "the topic of him cooperating with the FBI raised," prosecutors wrote. That chronology is corroborated by FBI agent notes taken during the June 11, 2014, interview, prosecutors wrote.

Two agents presented him with standard admonishments that the FBI "on its own cannot promise or agree to any immunity from prosecution or other consideration," prosecutors wrote.

Hutchinson provided "limited information to the FBI," including "information regarding a mental health provider client receiving General Improvement Funds and an extortion attempt," the filing said. But Hutchinson didn't initially identify those involved.

The FBI discovered in spring 2016, in a public corruption investigation in the Western District of Arkansas "that Hutchinson may have been continuing to engage in criminal conduct," prosecutors wrote.

Federal agents closed out Hutchinson as a confidential source in August 2016.

In April 2017, the FBI reopened the investigation into Hutchinson "on various potential criminal violations" after receiving new information.

Thursday's filing by prosecutors says some of Hutchinson's conduct in the wire and tax fraud indictment "occurred while Hutchinson was operating as a source" for the FBI.

Other evidence beyond what was obtained earlier from Individual-1's computers "was used to determine the full nature of the defendant's criminal conduct," prosecutors wrote.

Hutchinson's Little Rock attorney Tim Dudley could not be reached for comment late Thursday.

In a separate motion filed Thursday, prosecutors asked to file supporting documents and other evidence under seal, or out the public eye.

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Arkansas Democrat-Gazette

Jeremy Hutchinson

A Section on 03/08/2019

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