Former state Sen. Jake Files to face federal sentencing this summer for fraud | Arkansas Blog

Wednesday, April 4, 2018

Former state Sen. Jake Files to face federal sentencing this summer for fraud

Posted By on Wed, Apr 4, 2018 at 6:51 AM

click to enlarge FILES: Admitted to misusing taxpayer funds for personal purposes.
  • FILES: Admitted to misusing taxpayer funds for personal purposes.

The D-G reports that a sentencing date in federal court for former Republican state Sen. Jake Files has been scheduled for June 18.

Files pleaded guilty in January to charges of wire fraud, bank fraud and money laundering. He resigned from the state senate after his plea, but stayed on the state payroll as an admitted felon for a little more than a week (not to mention continuing as a senator for months after it was clear that this hammer was going to drop).

Files' plea related to misuse of General Improvement Fund money appropriated by the legislature and pledging a forklift he did not own as collateral for a $56,700 bank loan. Files admitted to misdirecting more than $25,000 in taxpayer money for a sports complex his construction company was supposed to build and pocketing GIF funds for personal purposes. He is currently free on bond.

The sentencing hearing for Files is scheduled for 10 a.m. before U.S. District Judge P.K. Holmes III.

Will Files face jail time? Max took a close look at the sentencing possibilities earlier this year:
I've talked with a criminal defense lawyer and perused the federal guide on sentencing. Files' has pleaded guilty to three felonies, bank and wire fraud and money laundering, the most serious of which, bank fraud, carries a maximum 30-year sentence. He'll get nothing like that, most likely, though the final decision is up to the judge.

Federal sentencing guidelines provide a dramatic reduction for first offenders, which Files is. He also will get credit for admitting responsibility. He'll get additional credit if he provides cooperation in testimony against others, in trial or before a grand jury, which he promises to do in his plea agreement. But we have no idea today if that promise is merely boilerplate or an indication that more is to come. I happen to find it hard to believe that somebody who cheated multiple lenders, a city government, the state and others engaged in criminal acts only twice — in obtaining and personally tapping $46,000 in state money for a city  project he never finished and in using a piece of construction equipment he no longer owned to fraudulently obtain a $55,000 loan. But those are the facts he faces in sentencing.

At page 428 in the sentencing guidelines, you can get an idea of what the probation office might recommend for Files. A key factor is how much of a financial loss he's found to have caused. From the criminal information, at least $100,000 would seem to be at issue.

He gets 7 points under the guidelines for the seriousness of the offense; 8 points for a $100,000 loss, and two points for abuse of a position of trust. Those 17 points could be offset by a deduction of three points for taking responsibility. At a total of 14 points (and again this is a rough guess), the guidelines recommend a sentence of 15 to 21 months. In the federal system, you earn scant credit for time served, but final months can be spent in community-based halfway houses. Probation seems out of the question for these offenses, but, again, the judge makes the call.

The plea agreement notes that Files has talked with the government about the potential sentencing range he faces, but also notes the judge makes the call. Judges frequently look askance at elected officials who behave badly. In Files case, he's been behaving badly for a long time. It was almost three years ago, in early 2015, when Files got a loan from a lobbyist, Bruce Hawkins, to help bail him out of a tight spot. He was then facing a hot check investigation, had pending state liens and problems had already emerged in the sports project he was supposed to build for the city. He got $1 million before the deal cratered and the project was never completed.

We have a recent example for comparison. Former Democratic state Treasurer Martha Shoffner (who happens to hail from Newport, Judge Holmes' hometown) got a 30-month sentence after she pleaded guilty to taking kickbacks from a bond salesman to whom she'd steered state investments. She reported to prison Nov. 3, 2015. She was freed at the end of 2017, after serving roughly her last three months in a Little Rock halfway house, meaning confinement for about 26 months of her 30-month sentence. She was ordered to make $31,000 restitution — restitution is a provision to which Files has also agreed — but she's broke and living with family. It is a rare day when restitution is made in such cases, though it is routinely ordered.
Here's Files' plea agreement.

Files is one of three former legislators to plead guilty this year to a felony in the misuse of GIF money. Former state Rep. Micah Neal and former state Rep. Eddie Cooper pleaded guilty to kickback schemes; former state Sen. Jon Woods has been charged and is awaiting trial.

Sign up for the Daily Update email
Favorite

Comments (7)

Showing 1-7 of 7

Add a comment

 
Subscribe to this thread:
Showing 1-7 of 7

Add a comment

More by David Ramsey

Readers also liked…

Most Viewed

Most Recent Comments

Slideshows

 

© 2018 Arkansas Times | 201 East Markham, Suite 200, Little Rock, AR 72201
Powered by Foundation