Ex-Arvest Banker Dennis Smiley Draws Criminal Scrutiny

by George Waldon and Gwen Moritz  on Monday, Apr. 7, 2014 12:00 am  

An apparent loan fraud scheme that imploded in northwest Arkansas has drawn a criminal investigation, and lawsuits have also started to flow.

In the middle of it all is H. Dennis Smiley Jr. of Rogers, who resigned March 13 as CEO of Arvest Bank’s operations in Benton County.

The federal probe is examining allegations that Smiley repeatedly pledged the same collateral, worth hundreds of thousands of dollars, to help borrow $4.5 million or more from a list of at least 18 banks.

One of the banks is First State Bank of De Queen, where Smiley’s father, Henry Dennis Smiley Sr., is chairman of the board.

“His mother and I are brokenhearted about it,” the elder Smiley told Arkansas Business last week. “I don’t know everything that’s happened, and I’m not sure if I could talk about it if I did.

“That’s about all I can say.”

Based on interviews with multiple sources, Arkansas Business first reported the fraud investigation on Wednesday.

Later that day, Arvest Bank filed an “interpleader” in Benton County Circuit Court saying it was holding almost $552,000 from Smiley’s participation in the bank’s stock and option plans. Arvest asked to deposit the money with the court so that the creditor banks could fight it out and Arvest could be released from any liability.

According to Arvest’s filing, Smiley wasn’t authorized to pledge or encumber the shares of stock held in the Arvest Bank Group Inc. Stock Purchase Plan and the ABGI Stock Option Plan.

But he did anyway, as at least nine banks listed the stock as collateral on Uniform Commercial Code financing statements filed with the Arkansas Secretary of State.

One of Arkansas Business’ sources, who all spoke only on condition of anonymity, said the scam dates back to at least 2010. It was discovered only recently when a scheduled loan payment didn’t clear because a Smiley account had insufficient funds to cover the draw.

This bounced payment ap-parently happened during the week of March 10, three days before Smiley resigned from his position at the state’s largest bank. Arvest officials have not explained the sudden departure of Smiley, a long-time Arvest employee.

 

 

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