Friday, August 22, 2014

Little Rock lawyer gets five years in federal prison for stealing from trust

Posted By on Fri, Aug 22, 2014 at 8:06 PM

David Patrick Henry Sr., 71, has been sentenced to 60 months in federal prison and two years of supervised release, plus ordered to pay $1.02 million in restitution for stealing from a trust.

The Justice Department said Henry owed $862,000 to the Joe Thomas Swaffar Irrevocable Insurance Trust and $159,000 to the IRS. A civil action will be filed to pursue forfeiture of Henry's property — including a home in Pleasant Valley Estates. The trust benefited a widow and her children, the news release said. It was established with $1.6 million in insurance policies on Joe Thomas Swaffar.

U.S. Attorney Chris Thyer said Henry had used his position as a lawyer to "hide his thievery from a family who trusted him. "As Trustee, Henry, Sr. devised a scheme in which he deposited funds from the proceeds of the Swaffar life insurance policies. Of these accounts, none of the bank statements were mailed to or could be accessed by the Trust beneficiaries, the news release said.

A jury convicted Henry in March  of 25 counts of mail fraud and three counts of tax evasion. Henry wrote checks on the accounts for himself and his family, including personal health insurance, electric bills, cable TV, mortgage notes for his sons, a vehicle for a son and other things. Henry claimed to have paid himself a salary of $2,000 per month for services allegedly performed as Trustee. However, the Trust document does not provide for a salary for the Trustee.

In addition, Henry filed joint federal income tax returns with his spouse for calendar years 2005, 2006, and 2007 that failed to report all his taxable income. According to the release: For 2005, Henry reported that his taxable income was $0 and tax due and owing was $0, when he knew his actual taxable income for that year was $400,063, resulting in tax due and owing of $114,085. For 2006, Henry reported taxable income of $1,037 when he actually had $55,871 in taxable income for that year, resulting in $7,626 in tax due and owing. Henry filed his 2007 return reflecting taxable income of $1,199, when he knew his actual taxable income was $81,211 for that calendar year, resulting in $13,154 in tax due and owing.

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