Arkansas Business' 25 Outlaws, Scoundrels & Posers (25th Anniversary)

by Arkansas Business Staff  on Monday, Mar. 23, 2009 12:00 am  

His misdeeds brought unwelcomed attention for his former law partner, Barry Jewell, who was convicted of tax evasion in September 2008.

23. Nelson Miller
Known for his late-night TV ads, Nelson Miller and his Freedom Financial built up a profitable book of business offering to help good people with bad credit get loans.

Nelson and his Little Rock financing firm became a candidate for Court TV in December 2004 when a grand jury indicted him and three of his minions each on one count of conspiracy to make false statements to a financial institution and 15 counts of wire fraud. In a plot that foreshadowed the mortgage meltdown of 2008, they airbrushed loan applications to make borrowers appear more creditworthy than they really were.

Miller's first go-round in federal court ended in a mistrial, but he was convicted at his second trial and sentenced last August to one year in prison, a punishment prosecutors have appealed as too lenient.

Along the way, seven employees pleaded guilty, and an eighth was convicted in a separate trial.

24. Sweet Goods Guys
Three California bakery executives were embraced in 2001 as white knights to rescue the failing Koehler Bakery in Sherwood. But Robert Statman, Joel Rund and Gary Kleinman of Sweet Goods Inc. were nothing more than rogues intent on spoil.

The trio obtained a $1.7 million loan from the Arkansas Development Finance Authority to help save Koehler. Instead of buying new equipment to turn the business around, they doled out the money to family members and associates and paid personal expenses.

The three were indicted in March 2005 on charges of conspiracy, wire fraud and money laundering. Robert Statman, 69, was sentenced to 33 months in prison last month for defrauding the ADFA. Kleinman, 55, was given three years' probation in recognition for helping prosecutors. Rund's sentencing was still pending, after the 75-year-old couldn't make a hearing for "medical reasons."

After looting Koehler Bakery, Statman visited Iowa where he allegedly left two sacked and pillaged bakery projects in his wake.

25. Frank Whitbeck Jr.
Financial cracks began showing in Frank Whitbeck Jr.'s world in 2002 when we noted a growing line of disgruntled creditors, from bankers holding past-due loans totaling tens of thousands of dollars to retailers owed a few hundred dollars.

The money woes escalated to seven digits in September 2003 when Metropolitan National Bank of Little Rock filed a $4.5 million foreclosure suit against the Little Rock businessman and his Winrock Grass Farm.

Events turned toward the criminal after the state Insurance Department seized Whitbeck's Signature Life Insurance Co. of America. Ensuing actions revealed that he managed Signature Life to the point of insolvency through a bookkeeping charade of unsecured IOUs masquerading as real estate loans.

Whitbeck began serving a six-year sentence in December after pleading guilty to one count of mail fraud. The sale of his country club home helped bring him current on his delinquent $3.7 million settlement with insurance regulators.

(Click here to see all the stories in our anniversary edition. Or click here to flip through each page of the edition in this special free electronic version.) 

 

 

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