Special investigation to include River Valley Sports Complex, Lau complaint
by October 18, 2018 12:17 pm 942 views
Legal troubles for former Sen. Jake Files of Fort Smith may not be over, and Fort Smith City Director Kevin Settle is getting the criminal investigation he has called for related to the now abandoned River Valley Sports Complex (RVSC).
On Wednesday (Oct. 17), Sebastian County Prosecuting Attorney Dan Shue issued a statement clarifying what Special Prosecutor Jason Barrett has been tasked to investigate with respect to Files and the sports complex. According to Shue, Barrett is conducting a criminal investigation into the RVSC, investigating a March 2017 theft complaint made by City Director Keith Lau against Files, and investigating an $80,000 payment from David Norsworthy to Files.
Barrett, who was appointed special prosecutor in May after a request by Shue for a special investigation, has “full investigative and prosecutorial authority,” Shue said.
Files was sentenced June 18 to 18 months in federal prison by U.S. District Judge P.K. Holmes III, for fraud related to use of Arkansas General Improvement Funds. He reported to prison on Aug. 2, 2018 and must pay restitution of $83,900. 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 office to obtain General Improvement Funds (GIF) “through fraudulent means and for personal gain,” according to the U.S. Attorney’s office.
THE RVSC
Files and Fort Smith businessman Lee Webb partnered to build the RVSC in 2012, and in 2014 they convinced the city of Fort Smith to invest $1.6 million into the project. Acting on the recommendation of Fort Smith City Administrator Carl Geffken, the board of directors nixed the plan effective Jan. 31, 2017, after more than two years of delays on the project, which was expected to cost the city just $1.6 million for the construction of eight tournament-quality softball fields, two concession stands and associated parking.
Files and Webb had planned to use private construction and in-kind donations to finish out the project. They billed the city for completed work, utilizing $1.08 million of the $1.6 million commitment by the time the city ended the relationship. Files pleaded guilty to wire fraud, money laundering, and bank fraud and received an 18-month sentence in June.
On Sept. 12, 11 of 12 jurors ruled against the city of Fort Smith in a lawsuit involving the RVSC and adjudicated before Sebastian County Circuit Court Judge Stephen Tabor. Total jury awards were close to $200,000. The Fort Smith Board of Directors recently voted to appeal the judgment, a move that could cost the city another $20,000 in legal fees – on top of about $50,000 in legal fees the city may have to pay in the Sebastian County Circuit Court hearing.
In the action approving the appeal, Settle repeated his call that the city submit info to the “prosecuting attorney or the feds” to pursue criminal charges against Webb and Files related to “lies” and other issues with the project.
THEFT ALLEGATION, NORSWORTHY MONEY
On March 6, 2017, Lau filed an offense report with the Fort Smith Police Department alleging Files defrauded Lau’s KCP Property Management of $33,200. In his complaint, Lau provided copies of two checks written to Files’ FFH Construction in the amounts of $9,500 and $23,706 along with the contract between the two companies and copies of text messages Lau and Files had personally exchanged. The contract work was for replacing roof shingles.
In the complaint, Lau said KCP took over property management of Huntington Chase Apartments located at 6400 Massard Road. In the course of doing so, Lau inherited a hail damage roof claim. He bid out the roof repair work to five different bidders and FFH was the lowest bidder at $64,838.
Shue’s initial request for a special prosecutor followed his letter to U.S. Attorney Dak Kees asking if Files receipt of an $80,000 wire transfer from Norsworthy to Files’ construction company was a violation of federal law. In a letter, obtained by the Arkansas Democrat-Gazette through an Arkansas Freedom of Information Act request, Shue asked if federal officials investigated the transfer and if it was related to Files fraud conviction.