Former Sen. Jake Files sentenced to 18 months in prison, judge calls violations ‘egregious’ (Updated)

by Michael Tilley (mtilley@talkbusiness.net) 2,133 views 

Editor’s note: Story updated with additions and changes throughout.
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Former Sen. Jake Files, R-Fort Smith, was sentenced Monday (June 18) to 18 months in federal prison by U.S. District Judge P.K. Holmes III, who called Files’ transgressions an “egregious” violation of public trust. He will report to prison on Aug. 2, 2018 and must pay restitution of $83,900.

Files also received three years of supervised release following his prison term. It’s likely Files will not serve the full 18 months. Attorneys familiar with prison guidelines told Talk Business & Politics that prisoners meeting good behavior and other criteria often serve between 80% and 90% of a prison term.

Gov. Asa Hutchinson, once a federal prosecutor, said the sentence was appropriate, but sad with respect to damaging the public trust.

“It is always a sad day when a public official violates the public trust. I have known Jake most of his life, and when he was charged, he resigned and accepted responsibility. The sentence is consistent with federal guidelines and is appropriate.  It is up to all of us in public service to do right and restore public confidence.”

Sen. President Pro Tempore Jim Hendren, R-Gravette, who will take the reins of the upper chamber in January, offered this comment.

“I’ve known Jake for 20 years. I am saddened for him and his family. This is the second member of the Senate to be sentenced to prison since I was elected 6 years ago and we have a third that has been convicted and is awaiting sentencing. Clearly, the Senate is in need of dramatic changes and that process will begin tomorrow with adoption of new Senate rules and creation of a select committee on ethics. While this is an important first step, I am aware that we have much more work to do. It will be my highest priority for the next two years and I am confident that we will succeed.”

SENTENCING REQUESTS
The sentencing was held in federal court in Fort Smith. Duane “Dak” Kees, U.S. Attorney for the Western District of Arkansas, and AnnaLou Tirol, acting chief of the public integrity section of the U.S. Department of Justice, requested a sentence of 18-24 months.

Files’ attorney James Pierce, assistant federal public defender for the Western District of Arkansas, requested in a May 29 sentencing memo that a “very brief term of incarceration followed by a term of home detention for the initial period of supervised release would be an appropriate sentence, along with an order of restitution.”

Files entered a guilty plea on Jan. 29 to one count of wire fraud, one count of money laundering, and one count of bank fraud. He resigned his Senate seat in early February. According to court records, between August 2016 and December 2016, while serving in the Arkansas State Senate, Files used his State Senate office to obtain General Improvement Funds (GIF) “through fraudulent means and for personal gain,” according to the U.S. Attorney’s office.

The court filing says Files authorized and directed the Western Arkansas Economic Development District, which was responsible for administrating the GIF in Files’s legislative district, to award a total of $46,500 in GIF money to the city of Fort Smith for construction of the River Valley Sports Complex. The city would eventually pull out of the project, which remains incomplete.

To secure the release of the GIF money, Files prepared and submitted three fraudulent bids to the Western Arkansas Economic Development District. He then instructed an unnamed associate to open a bank account under her name to conceal his role as the ultimately beneficiary of the GIF award.

When a first installment of approximately $26,900 was wire transferred from Fort Smith to the associate’s bank account, the associate withdrew approximately $11,900 of the funds in a cashier’s check made payable to FFH Construction, Files’s construction company, and the rest in cash. The associate then hand-delivered the check and the cash to Files who, in turn, deposited the check into his personal bank account.

Files 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.

TESTIMONY, COMMENTS IN MONDAY’S HEARING
Fort Smith City Administrator Carl Geffken testified on behalf of the government, saying that Files “lied repeatedly to me and the city,” about the River Valley Sports Complex on which the city spent more than $1 million before pulling the plug. Geffken said the trust placed by city officials in Files resulted in damage to the city’s credibility, having an incomplete sports facility after spending $1 million, and a chilling effect on future citizen support of worthy projects.

Victor Salgado, a trial attorney with the Department of Justice’s Public Integrity Section, argued before Holmes that Files’ sentencing will be the “first of many sentences” related to fraud and bribery committed by elected officials. He said it is important that the court “sends the message that getting caught is not the only cost of doing business,” but comes with serious punishment.

“That’s what the court gets to do today,” Salgado said to close his case for a sentence of at least 18 months.

Pierce, Files’ attorney, argued that Files’ should not receive a harsh sentence “simply because he was a public servant.” He also noted that Files is a first-time offender, has fully cooperated with the investigation and could do more to pay back the community if allowed to stay out of prison.

“He is able to work and pay the restitution he owes,” Pierce said, adding that a prison term will make it hard for him to get a meaningful job once out of prison. “ He appears today, your Honor, with his hat in his hand.”

In asking that Files’ be sentenced to a day in prison, Pierce was interrupted by Judge Holmes who said the difference between a day and the sentencing guidelines was too big a difference.

“I don’t know when a bigger disparity” was presented to the court, Holmes said.

Files then made what he said was plea “for mercy.” He said he has lost his business, his home, and “I also believe I’m about to lose my wife and family.” Files became emotional when noting that his actions will “haunt” his children for the rest of their lives, adding they already have faced hurtful remarks at church and school. He apologized for violating the public trust and said he took full responsibility for his actions.

THE SENTENCING
Judge Holmes was not amenable to leniency. He chastised Files for abusing his position of power and stealing taxpayer dollars in “an egregious violation of public trust.” The various ways that Files used his standing in the community to coerce the actions of the city of Fort Smith and others, his initial misleading statement to federal agents, and the blatant fraud against the bank were too much to discount.

“The court just can’t look past all this,” Judge Holmes said in addressing Files.

Judge Holmes said he understands the harm and disruption to family, but the court has a duty to follow sentencing guidelines and “avoid sentencing disparity” with similar cases.

Holmes then sentenced Files to 18 months in prison for each of the three counts, with the sentences to run concurrently. He waived fines, but ordered $83,900 in restitution, although that amount may change based on the outcome of pending civil litigation Files’ faces. The sentence also includes three years of supervised release when his prison term ends.

Files’ prison term is set to begin Aug. 2, with the Department of Justice to determine the facility in which he will serve.

Talk Business & Politics CEO Roby Brock contributed to this report.

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