Sunday, July 25, 2010

Law and Order in the Ozarks (Part LXIII): Former county judge pleads guilty to fraud

The top story in the July 21, 2010 edition of the Newton County Times is about former county judge (the county's chief administrative officer), Harold Smith, 57, pleading guilty in federal court "to conducting at least six fraudulent deals that took almost $70,000 from county funds." He will be sentenced following the federal judge' receipt of a report from the U.S. Probation Office. His sentence could be as great as 20 years, with a $250,000 fine.

One of the fraudulent deals was described in great detail.
In 2008, when Smith was looking for a D6Cat Bulldozer, Troy Rhea, a salesman with Hugg and Hall Heavy Equipment in Little Rock, offered to sell him a 1971 dozer and other equipment from Baxter County.

Smith told the salesman that he was interested in a lowboy trailer and a Cat loader for the county, but he wanted the dozer for a family member. The salesman priced the bulldozer at $7500. Smith had the salesman knock $5000 off the bulldozer price and add it to the low boy trailer the county was buying.

Smith paid $2,500 for the dozer and had it delivered about May 14, 2008 to the home of "Person A," who is not otherwise identified in the stipulation except that he was doing dirt work for the county at the time as a private contractor.

Smith said someone referred to the in the stipulation only as "Mr. Coffman" was buying the dozer. The salesman never met "Mr. Coffman," and it was unclear from the stipulation whether he exists.

At Smith's direction, "Person A" put new tracks on the dozer and put the $7,600 cost on an invoice "Person A" was sending the county for his dirt work.

The next month, "Person A" and Smith fabricated a bill of sale making it appear that "Person A" bought the dozer from "Mr. Coffman" for $15,000. "Person A" sold the dozer to Newton County for $26,900.

"Person A" cashed the county check and gave the $26,900 to Smith, both sides agreed.

Smith paid $2500 for the dozer and sold it through "Person A" to Newton County for $26,900, with a personal profit of $24,400, both Smith and the U.S. Attorney's Office agreed.

They agreed that Smith conducted five other similar fraudulent deals in which he sold heavy equipment to Newton County and made a person profit from the deal.

"The United States assures, and the defendant agrees, that the most readily provable loss amount to Newton County for all six deals was $69,410," according to the stipulation.
In other headlines:
  • 'Specialty Tire' disposal costly. This reports that the Northwest Arkansas Solid Waste Management District will be charging as little as $4.50 to dispose a farm front tire and as much as $46.50 to dispose of a large over-the-road tire.
  • Private company: Landfill won't make money. This story reports that "most solid waste board members walked out on a meeting with the manager of a private landfill company who warned that "their regional landfill isn't working right and won't make enough money to pay off its bonds." The story doesn't make clear what the problem is.
  • County sales tax meeting expectations. This report states that the 1.5% county sales tax is meeting expectations and that year-to-date funds are up about $5,000. County sales tax collections for June exceeded $45.3K, with more than $16.2K of that going to finance construction of the new jail. . The 1/2 cent sales tax for the jail produced almost $95K in the first six months of 2008.

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