Posted 7/7/2010 09:31 pm
Updated 12 months ago
Financially troubled Little Rock real estate developer Steve Clary was indicted Wednesday by a federal grand jury on four counts of wire fraud and one count of mail fraud for allegedly misappropriating $1.6 million in loan proceeds from Banc of America Leasing Corp. in 2008.
Each count carries a statutory penalty of no more than 30 years incarceration and/or a fine of $1 million.
The indictment was announced in a news release by U.S. Attorney Jane Duke. Here's how the release describes Clary's alleged crimes:
"According to the indictment, Clary created a company called Destination Ventures which was to purchase, custom outfit and lease buses. Clary obtained a loan from Banc of America Leasing Corporation (BALC) to fund the purchase and outfitting of the buses. The loan was approved and entered into on May 8, 2008.
"On the following day, Clary requested that BALC distribute a portion of the loan proceeds to purchase and outfit the buses. However, on the same day, Clary directed the vendor who was to outfit the buses to redistribute the funds once the vendor received them. The vendor complied with the directives from Clary.
"Consequently, $1,595,000 of the loan proceeds were paid to companies in which Clary had a financial interest but which had no involvement in the purchase, custom outfitting, or leasing of the buses as intended by the loan agreement. The mail fraud count charges Clary with later falsely certifying to BALC that the buses had been custom outfitted."
Clary is the developer of Shackleford Crossings shopping center in west Little Rock. Creditors have been circling his and his wife's personal and professional holdings since last year. Clary has defaulted on more than $17 million in personal and commercial loans since July 2008.
In March, the U.S. Bank of Minneapolis opened a foreclosure action on Clary's home in west Little Rock's gated Hickory Hills neighborhood. In April, Arkansas Business reported that Centennial Bank of Conway filed a $1.6 million foreclosure lawsuit against the couple in connection with a line of credit allegedly in default.
The bank is trying to take possession of Clary's 79 percent stake in Shackleford Holdings LLC. The limited liability company is the parent company of Shackleford Crossings LLC, which owns the Shackleford Crossings shopping center.