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Fraud Friday — SBA Fraud Charges Dismissed Against Arkansas Community Banker John Stacks

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August 5, 2016

By Bob Coleman
Editor, Fraud Friday

notguiltyFraud Friday — SBA Fraud Charges Dismissed Against ex-Arkansas Community Bank CEO

The case is over for John Stacks who became a poster child with conservative groups for overzealous federal government led “gestapo” SWAT raids and wrongful prosecutions.

His crime said the feds? Submitting false financial statements and projections to SBA and falsely claiming a tornado had destroyed property and equipment to obtain a disaster loan for his company, Mountain Pure Water.

Now, all 11 fraud counts filed in 2013 have been dismissed. The judge and appeals court said the prosecutors never proved any false statements.

Of seven guilty counts by a jury, two had been reversed by the trial judge in 2014.

The government appealed. Not only did the Feds lose, but the remaining five guilty convictions were overturned and a new trial ordered for later this month.

However, last month the federal prosecutors recommended dropping all remaining fraud charges with a one line filing.

Writes Accuracy in Media:

In January 2012, about 50 federal agents, swooped in, guns drawn. Without explanation they shut down plant operations, herded employees into the cafeteria, and confined them to the room for hours. They could not so much as use the bathroom without police escort. Cell phones were confiscated and all Internet and company phones were disabled.

Plant Manager Court Stacks was at his desk when police burst through his office door, guns drawn and pointed at him.

Quality Assurance Director Katy Depriest, who doubles as the company crisis manager, described agents’ “Gestapo tactics.” She added that they confiscated CDs of college coursework and educational materials for a class she had been taking that resulted in her flunking the course. Those materials have not yet been returned.

All charges were were dropped with prejudice, meaning permanently.

Prosecutors declined to comment on their reasons for dropping the case.

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