Arvest settles with 18 of 20 banks in the Smiley fraud case

by The City Wire staff ( 41 views 

Arvest Bank, which turned over $551,764 to the Benton County Court in the interpleader case of H. Dennis Smiley, has reportedly settled with 18 of the 20 banks holding claims against the money. While the cost of that settlement may never be known, the claims and legal costs exceed $3 million, according to court filings.

Smiley was forced to retire as president of Arvest Bank-Benton County in March when possible loan fraud was discovered. Smiley reportedly borrowed an estimated $4.5 million from more than a dozen Arkansas banks dating back to 2009, according to Uniform Commercial Code filings with Arkansas Security of State.

Arvest, Smiley’s former employer, filed the interpleader case in April asking the court to decide how the proceeds would be split from Smiley’s retirement fund after his termination. The funds were pledged as collateral among at least 20 banks staking claims far exceeding the retirement funds.

Last week 18 of the banks involved in the interpleading signed over their interests to Arvest Bank, who then asked the court to dismiss their claims as of July 30. Following is the list of banks settling their claims against Arvest.
Bank of Oklahoma
The Bank of Fayetteville
Bank of the Ozarks
Benefit Bank
Chambers Bank
Centennial Bank
Delta Trust & Bank
First Bank, Hampton
First Federal Bank, now Bear State Financial
First National Bank of Fort Smith
Integrity First Bank
First Security Bank
First State Bank of Lonoke
First National Bank of NWA
First State Bank of Russellville
First Western Bank of Booneville
Legacy National Bank
Summit Bank in Arkadelphia

Signature Bank and First State Bank of DeQueen did not settle with Arvest and will have their day in court on Sept. 18. Benton County Circuit Judge John Scott has ordered a pretrial and status conference. Scott filed that notice with the court Thursday, (Aug. 7). He said on Sept. 18, he will schedule future hearings and or a trial in this matter. He told The City Wire he wanted to conduct status hearings in all of the Smiley cases on Sept. 18. At that hearing Scott said he will decide all pending motions and set all other matters for trial if needed.

Jason Kincy, spokesman for Arvest, said the bank did ask the court to dismiss the claims of the 18 banks mentioned in the filing. He said the bank has no comment on the settlement or any of the actions that led to the dismissal, or any of the pending litigation. Kincy also re-affirmed that no other Arvest employee has been implicated in the Smiley situation, despite their names being mentioned in several of the court filings. 

“We don’t expect there to be any other personnel changes related to this case, all of those associates named in the filings remain employed by Arvest,” Kincy said.

A number of the banks settling their claims told the court that Arvest knew or should have known about the multiple usage of collateral pledged by Smiley, a bank officer. There have been no public records of the settlements made, and there likely won’t be, according to the court.

Cases that remain open for hearing on Sept. 18 include:
• Arvest interpleder versus H.Dennis Smiley, Signature Bank and First State Bank of DeQueen;
• Delta Trust Bank versus HDH Holdings, a business entity of Smiley;
• First Security Bank foreclosure on Smiley’s home at 56 Champions Boulevard in Rogers Pinnacle Country Club;
• Simmons First National versus Henry Dennis Smiley, Design for the Home;
• First Federal Bank versus HDH Holdings, H. Dennis Smiley Jr.; and
• First State Bank versus Henry D. Smiley Jr.