Date: 10-28-2014

Case Style: United States of America v. Brandon Lynn Barber

Case Number: NA

Judge: P.K. Holmes

Court: United States District Court for the Western District of Arkansas (Sebastian County)

Plaintiff's Attorney: Conner Eldridge, Kennth Elser, Benjamin Wulff and Wendy Johnson

Defendant's Attorney: Not Available

Description: Fort Smith, Arkansas - Conner Eldridge, United States Attorney for the Western District of Arkansas, announced today that Brandon Lynn Barber, age 38, of New York, New York, was sentenced today to 65 months in prison and three years of supervised release for conspiracy to commit bankruptcy fraud, conspiracy to commit bank fraud, and money laundering. The Honorable P. K. Holmes, III presided over the sentencing in the United States District Court in Fort Smith.

U.S. Attorney Eldridge commented, “This case has always been about fraud. The Defendant’s efforts to deceive creditors, the Federal Bankruptcy Court, and others as to his true financial condition resulted in tremendous losses that struck at the heart of our local economy. As a result of this fraudulent conduct, businesses and hard-working individuals—including not only banks but also plumbers, roofers, architects, and others involved in the construction and development business—were not paid. We will continue to work together to identify and prosecute fraudulent schemes and do all we can to ensure that businesses are protected from such conduct.”

“Fraud and dishonesty in bankruptcy proceedings undermines the integrity of these important proceedings. IRS-Criminal Investigation is committed to unraveling complex financial transactions and money laundering schemes. We are proud to work with our law enforcement partners to investigate and prosecute individuals who attempt to enrich themselves by committing these schemes,” stated Christopher A. Henry, Special Agent in Charge. “Today’s sentencing should send a clear message to those who would consider participating in these types of fraudulent financial transactions.”

“The sentencing of Mr. Barber underscores the commitment of the IRS, U.S. Attorney’s Office, and the FBI in working together to investigate and prosecute those who perpetuate bank fraud, bankruptcy fraud and money laundering,” stated David T. Resch, Special Agent In Charge of the FBI in Arkansas. “We will continue in our efforts to stop those who seek to commit fraud.”

Barber was charged with several schemes to defraud banks, creditors, and the Federal Bankruptcy Court. Those schemes, as alleged in the indictments, include: (1) providing false and fraudulent financial information and statements to Legacy National Bank of Springdale in connection with loans to finance the Legacy Condominium building and project in Fayetteville; (2) providing false and fraudulent financial information and statements to Metropolitan National Bank of Little Rock and Enterprise Bank of St. Louis, Missouri, in connection with loans to finance the Bellafont project in Fayetteville; (3) concealing assets and income from creditors and the bankruptcy court by transferring funds to co-defendants, James Van Doren and K. Vaughn Knight or accounts controlled by them and using those funds for Barber’s personal benefit and expenses; and (4) falsely and fraudulently representing purchase prices for real estate known as Executive Plaza to First Federal Bank of Harrison, Arkansas, to obtain loan amounts exceeding the actual purchase prices and thereby generating excess cash without the Bank’s knowledge or approval. This conduct generally occurred from 2005 through 2009.

On July 31, 2103, Barber pleaded guilty to one count of conspiracy to commit bankruptcy fraud, one count of conspiracy to commit bank fraud and one count of money laundering. These counts on which he was convicted stemmed from his conspiring to conceal assets, income and other financial information from the federal bankruptcy court and creditors, conspiring to inflate purchase prices of real estate related to the Executive Plaza transaction in order to generate cash kickbacks, and laundering the proceeds of fraud.

Under the federal sentencing guidelines, the Court considered relevant conduct in pronouncing sentence, which included the other schemes to defraud charged in the indictment and detailed above. The Court also stated that it would render a decision on restitution by January 5, 2015.

The status on the other defendants involved in this case are as follows:

Defendant James Van Doren pleaded guilty on August 23, 2013 and is set to be sentenced on November 3, 2014.

Defendant Jeff Whorton pleaded guilty on August 26, 2013 and is set to be sentenced on November 5, 2014.

Defendant Brandon Rains pleaded guilty on October 17, 2013 and is set to be sentenced on November 6, 2014.

Defendant K. Vaughn Knight was convicted of eight counts of bankruptcy fraud and money laundering on November 18, 2013. The Court overturned that jury verdict on June 10, 2014. That case is currently on appeal.

This case was investigated by the Internal Revenue Service Criminal Investigation Division and the Federal Bureau of Investigation.

Outcome: See above

Plaintiff's Experts:

Defendant's Experts:

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