Three months after being hit with a $9 million civil judgment for embezzling from a Trumann manufacturing company, a retired accountant from Jonesboro pleaded guilty Tuesday to a related federal charge subjecting him to a prison term of up to 30 years.
Chief U.S. District Judge D. Price Marshall Jr. accepted a guilty plea to a single count of bank fraud from Edward M. Cooper Jr., 71, who admitted taking about $9.2 million from Roach Manufacturing Corp. over 21½ years.
Cooper worked for the Jonesboro accounting firm Osborn & Osborn, through which he performed accounting work for Roach Manufacturing, a privately held manufacturer of industrial conveyor belts, from November 1996 through May 2018.
According to a civil lawsuit Roach filed in 2018 in Craighead County Circuit Court, Cooper and his now former wife, LaNita, used the stolen funds to maintain a lavish lifestyle that included regular travel, buying jewelry and furs, and spending more than $2 million to construct a cabin on the Spring River in Fulton County.
LaNita Cooper filed for divorce in December of 2018. The divorce was final in September, after Roach intervened and the Coopers agreed to turn over the Fulton County property "in partial satisfaction of the judgment against the husband in the civil case." The decree also released LaNita Cooper and the couple's four children from any claims relating to the lawsuit.
On Sept 30, Circuit Judge John Fogelman of Marion signed the final judgment in the case, holding Cooper accountable for $9,009,879.34 plus interest at the rate of 5% annually, or $1,234.23 per day.
In federal court Tuesday in Little Rock, Cooper admitted writing 138 unauthorized checks to himself on Roach's account, at the rate of four or five times a year. He admitted forging signatures of company officials on the checks and then depositing them into his own bank account.
Under questioning by Marshall, he said the withdrawals appeared on the company's bank statements, but he provided summaries of the statements, rather than the actual statements, to the company.
His attorney, Bill Stanley of Jonesboro, noted that all the statements were mailed to the company itself and not to Cooper.
During the course of the lawsuit, Stanley told the judge, "We discovered that Roach had never, at any point, opened a bank statement. They just put them in a box."
It wasn't until several months after Roach hired a financial manager, Katelyn Furnish, in October of 2017, that the fraud scheme was uncovered. Documents in the civil case showed that after she began performing some of the bookkeeping and accounting duties that Cooper had performed, she discovered some irregularities and asked for bank statements, but Cooper never delivered them, despite promising to do so.
Furnish then began reviewing the statements online, and in 2018 discovered an April 2016 check payable to Cooper for $39,947, according to the lawsuit. It said that the signatures of both the company's president and secretary/treasurer appeared to have been forged, and both acknowledged they hadn't signed it.
An initial audit uncovered 70 checks payable to Cooper totaling more than $4.5 million and deposited into his personal checking account, and after additional financial records were received, the number of unauthorized checks increased to 138.
Assistant U.S. Attorney Jana Harris said Tuesday in court that the unauthorized checks were written for varying amounts of between $18,000 and $98,000 apiece, with 48 of them written for $66,420 and 18 written for $86,000 apiece.
Harris said the single count of bank fraud is based on a Dec. 12, 2017, check for $87,433.15 that Cooper wrote to himself off the Roach account.
When sentenced at a later date, after a pre-sentence report is prepared for the court, Cooper faces up to 30 years in prison and up to five years on supervised release, as well as a fine of up to $1 million. Factors that will help determine the sentence range he faces are the amount of loss involved and the fact that he abused a position of trust, according to terms of his plea agreement.
Harris said the amount of restitution due in the criminal case will be the same amount as in the civil judgment. She said the federal government will reduce the amount of restitution owed in accordance with the amount that has been paid on the civil judgment.
Roach's attorney, David Wilson at the Little Rock law firm Friday, Eldredge & Clark, said in October that the company doesn't expect to recover anything close to the $9 million that it documented Cooper stole. He said the company had recovered $500,000 in cash from various accounts, and that the Coopers also turned over the Spring River property and other "hard assets," whose value hadn't yet been determined.
Metro on 01/08/2020