$2.5 Million Home's Ruins Reflect Whitbeck's Fortunes

by George Waldon  on Monday, Feb. 16, 2009 12:00 am  

This pile of rubble at 2322 N. Spruce St. was once the home of Little Rock insurance executive Frank Whitbeck.

Whitbeck, 61, began serving a six-year sentence for fraud in federal prison on Dec. 1.

He avoided a criminal trial by an 11th-hour plea agreement on one count of mail fraud in U.S. District Court. Whitbeck also faced three counts of making false statements to the Arkansas Insurance Department.

The charges stem from financial dealings between Signature Life and Winrock Grass Farm Inc., both owned by Whitbeck.

Whitbeck is accused of diverting more than 80 percent of Signature Life's assets to himself and other companies he controlled. The charges are linked with Signature Life's annual statements for 2001, 2002 and 2003 filed with the state Insurance Department.

According to the allegations, Whitbeck falsely described loans to his Winrock Grass Farm as residential mortgages, falsely described the loans as first liens and falsely described Winrock as an unrelated third-party borrower.

Insurance regulators said Whitbeck should have categorized the loans to Winrock Grass Farm as commercial mortgages. Other lenders already had first liens on the property, and the Signature loans to the grass farm were never filed of public record, which made the debt unsecured.    

 

 

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