As Arkansas lawmakers headed to Little Rock Monday (Feb. 12) for the fiscal session, former Rep. Eddie Wayne Cooper, D-Melbourne, pleaded guilty in federal court for his role in a conspiracy to embezzle more than $4 million from a Springfield, Mo.-based health care charity.
Timothy Garrison, U.S. Attorney for the Western District of Missouri, announced that Cooper, 51, waived his right Monday to a grand jury and pleaded guilty before U.S. Magistrate Judge David Rush to charges of one count of conspiracy to embezzle from the nonprofit organization.
By pleading guilty, the former Democratic legislator-turned-lobbyist admitted he conspired with several executives of Preferred Family Healthcare, a nonprofit charity headquartered in Springfield, to use the charity’s funds for unlawful political contributions, for excessive, unreported lobbying and to financially benefit himself.
Cooper received at least $387,501 from a lobbying firm and at least $63,000 in kickbacks as a result of his participation in the conspiracy. Under the terms of Monday’s plea agreement, Cooper must forfeit his gain from the conspiracy to the government.
Cooper was an Arkansas lawmaker from 2006 through January 2011, and a lobbyist registered with the Arkansas Secretary of State beginning Jan. 20, 2011. On April 20, 2009, Cooper was hired to the full-time position of regional director for Preferred Family Healthcare. Cooper’s employment with the charity ended on April 26, 2017. Cooper was a member of the charity’s board of directors from October 2009 through April 2015, and also worked as a lobbyist.
Under federal rules, Cooper is subject to a sentence of up to five years in federal prison without parole. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
ARKANSAS GIF TIES
Cooper’s guilty plea comes nearly two weeks after Sen. Jake Files, R-Fort Smith, pleaded guilty to one count of wire fraud, one count of money laundering and one count of bank fraud, with part of the activity including use of money from Arkansas’ “general improvement fund” (GIF). Files resigned earlier this month ahead of the 2018 fiscal session that began Monday. Files, who served as chairman of the Senate Revenue & Tax Committee, also admitted to submitting a materially false loan application in November 2016 as part of a scheme to secure approximately $56,700 from First Western Bank.
General Improvement Funds were at the root of another investigation involving former Sen. Jon Woods, R-Springdale, and former Rep. Micah Neal, R-Springdale. Neal has confessed to a kickback scheme involving GIF money, while Woods is fighting the charges.
Cooper’s case is also related to a federal case made public on Dec. 18, citing an “unnamed former Arkansas legislator” and a Northwest Arkansas businessman as accomplices in a scheme with a New Jersey political consultant and several executives of a Springfield, Mo., charity to spend nearly $1 million on illegal political activity and kickbacks to co-conspirators.
In that case, Donald Andrew Jones, also known as “D.A.” Jones, 62, of Willingboro, N.J., waived his right to a grand jury and pleaded guilty before U.S. Magistrate Judge David Rush to charges that he participated in a conspiracy from April 2011 to January 2017 to steal from an organization that receives federal funds.
MISSOURI CHARITY SCHEME
Jones’s firm, D.A. Jones & Associates, based in Philadelphia, Pa., provided political and advocacy services, including consulting, analysis, and public relations. By pleading guilty, Jones admitted he was paid approximately $973,807 by Preferred Family Healthcare for illegal lobbying and political activity on behalf of the charity. Two co-conspirators received a total of $264,000 in kickbacks from Jones.
Preferred Family Healthcare resulted from the May 1, 2015, merger between Alternative Opportunities of Springfield, Mo., and Preferred Family Healthcare of Kirksville, Mo.
Court documents cite, but do not identify by name, five additional co-conspirators who are not charged in the fraud scheme. Person #1, Person #2 and Person #3 – all residents of Springfield – were executives at the charity. They include the founder and chief financial officer of the charity, the charity’s chief operating officer and the charity’s chief executive officer. Person #4, a resident of Rogers, Ark., served as an executive for company operations in the state of Arkansas. Person #4 also operated two lobbying firms.
According to Monday’s plea agreement, conspirators engaged in multiple schemes to unlawfully use the charity’s funds to make political contributions, for excessive and unreported lobbying and political advocacy, and to unjustly enrich themselves. For example, conspirators caused personal contributions to elected officials and their political campaigns to be reimbursed by the charity. Such indirect contributions are prohibited by law just as if the payments had been made by the charity directly.
In order to provide a veneer of legitimacy for the kickbacks paid to themselves and others, and to disguise the nature and source of the payments, federal court documents said the conspirators caused the payments to be described in the records as business expenses, such as “consulting” and “training” services,and executed sham “consulting agreements.”
Part of the scheme involved $3 million in payments and kickbacks with a company identified in court documents as Lobbying Firm A, an Arkansas firm owned and operated by Person #4 that also employed Cooper as a lobbyist. Preferred Family Healthcare paid Lobbying Firm A to provide lobbying and advocacy services. Cooper and others solicited the assistance of elected and appointed officials regarding legislative issues that impacted the charity, in particular matters involving the charity, and in steering grants and other sources of funding to the charity from 2010 through 2017. These funding sources included proceeds from the Arkansas General Improvement Fund.