Harvey & Bernice Jones Trust ‘Frost' Bitten?

by John Haman  on Monday, Mar. 31, 2014 12:00 am  

Jack Frost was on hand when Bernice Jones created the Bernice Young Jones Educational Trust for Family & Community Studies in October 1995.

Although many gifts have been made in cash, Mrs. Jones often prefers to pay construction bills as they’re submitted for projects she’s funding, Carver says. That method allows her to continue earning interest on her money — a wise tactic for someone who considers herself “Scots-Irish” and thrifty.

Family Center to Survive

In an interview Wednesday, Carver denied speculation that recent Jones gifts — or disappointing lot sales at Mrs. Jones’ new Springdale subdivision, Har-Ber Meadows — had overextended the foundations, jeopardizing her ability to endow the Center for Families’ operations. Carver says the center “should be” funded in perpetuity, but “there are no absolute guarantees.”

Although construction costs at the center were $7 million over budget, the expense was still less than the maximum price guaranteed by the contractor and the architect, Carver says. Cuts also were made while construction was under way. One gymnasium was eliminated from the plan, and the pool and ice rink were both made smaller than originally proposed. But other things such as a television station were added, he says, although the station’s paid employees recently were terminated.

Also cut back at the center was the child-care program, which was handling 1,000 children per month at a cost to the center of $15 each. The program, Carver says, is being revamped for use by people with financial need: single parents, for example, or welfare recipients attending classes in the center aimed at helping them become self-supporting.

Since Then ...

2014: In August 1997, three months after Arkansas Business reported on Jack Frost’s ballooning income, the Jones Charitable Trust filed a civil lawsuit accusing him of defrauding the trust of more than $1.6 million by forging Bernice Jones’ signature on checks, destroying documents and misleading auditors.

As the story hinted, Jones did not know how much Frost was paying himself from the trust, because his legitimate salary exceeding $1.1 million from Jones Investment Co. was supposed to compensate him for all Jones-related work, including for the charitable trust.

The total diverted to Frost’s control between November 1993 and March 1997 exceeded $1.6 million.

Frost denied any wrongdoing, including any forgery. The civil suit was settled confidentially in 1998, but tax documents and a subsequent restitution order indicated that Frost paid the trust $277,417.

In February 1999, almost two years after the embezzlement was discovered, a federal grand jury in Little Rock indicted Frost on 70 felonies: 62 counts of money laundering, three counts of filing a false tax return, two counts of wire fraud and one count each of mail fraud, making false statements to a grand jury and obstruction of justice. The charges upped the amount of the trust’s loss to $1.8 million.

Legal wrangling kept the trial from starting until November 2001. On Dec. 5, 2001, a federal court jury in Little Rock convicted Frost on 69 counts — all except one that had been dropped by prosecutors. Despite big-name character witnesses, Frost was sentenced to 70 months in prison and $1.5 million in restitution. He remained free while his conviction was appealed to the 8th U.S. Court of Appeals in St. Louis, but after losing the appeal, he entered prison in May 2003, less than four months before Bernice Jones died at age 97.

Frost was released four years later and died, at age 80, in May 2012.



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