The Top 10 Business Stories of 2009

by Arkansas Business Staff  on Monday, Dec. 28, 2009 12:00 am  

  • Rogers businesswoman Dana Washburn admitted she used phony collateral to defraud IberiaBank Corp. out of $3.6 million. She will be sentenced in March.
  • Aaron Jones, lawyer and real estate developer, was indicted in October by a federal grand jury for arson, mail fraud and the use of fire in the commission of a federal felony in connection with the May 30, 2008, torching of his house in Little Rock's Chenal Valley neighborhood. He pleaded not guilty and is scheduled for trial in September 2010.
  • Hot Springs banker Richard T. Smith pleaded guilty to a single count of filing a false tax return in exchange for two years of probation, 200 hours of community service and a $20,000 fine. The sentence came in November, more than three years after he was indicted on charges related to his dealings with Ponzi schemer M. David Howell of Little Rock, whose investment fraud fell apart in October 2002.
  • Little Rock tax attorney Barry Jewell began serving a 30-month sentence at the federal correctional facility at Memphis in July, 10 months after he was convicted of a single count of aiding and abetting tax evasion by a client. (He was acquitted of conspiring to commit wire fraud with his former law partner, Keith Moser, who is serving his 188-month sentence at Forrest City.)

No. 9
Arkansas Lottery Begins

For sheer inception speed, the Arkansas Scholarship Lottery started out of the gate faster than any other state lottery.

Gov. Mike Beebe signed legislation into law on March 25 creating an independent commission to decide what games get played and how those games would fund college scholarships. 

Ernie Passailaigue was hired as executive director of the Arkansas Lottery Commission on June 5. Passailaigue, the former lottery chief of South Carolina, started his new job on June 29.

Ninety-one days later, the first lottery tickets in Arkansas were sold on Sept. 28. That was touted as a record startup that outpaced the 115-day mark set by North Carolina in 2006.

Along the way, folks got antsy about the big salaries Passailaigue and his lottery posse were pulling down. At the top of the organizational chart was Passailaigue at $324,000 with his top two aides, former South Carolina Lottery execs, each drawing an annual salary of $225,000.

Paycheck envy/fiscal concerns aside, few could quibble with the initial performance of the Arkansas lottery. Sales surpassed the $100 million mark on Dec. 9, generating more than $25 million in net proceeds for college scholarships.

The state Legislature has a Feb. 28 deadline to establish the size of the lottery-financed college scholarships that become available starting in the 2010-11 school year.

Lt. Gov. Bill Halter and other lottery boosters have advocated $5,000 scholarships for students attending four-year colleges and $2,500 scholarships for students attending two-year colleges.

The success of the lottery heightened concern that much of the money pouring in was from people who could least afford it and that advertising and cheap games were targeting the state's least affluent.

Passailaigue promised a demographic study of the matter after the first 12 months, with a new study to follow each year.

His projections call for annual lottery ticket sales of $400 million when operations hit full stride in 2010, with a quarter of the revenue devoted to scholarships.



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