Posted 3/9/2006 01:53 pm
Updated 2 years ago
After the plea, a routine drug test by the U.S. Marshal's Office found cocaine in his system, and he was whisked back into U.S. District Judge James Moody's court and ordered held until Monday, according to U.S. Attorney Bud Cummins.
Pitts had denied being under the influence of any substance, but the results of the drug test raise the question of whether he was competent when he made his plea.
Another hearing will be held on Monday in which he'll be asked whether it is still his intention to plead guilty, Cummins said. The original guilty plea has not been withdrawn.
Pitts, former CEO of his family's Beach Enterprises Inc. of Little Rock, didn't wait to be charged with bank fraud and waived his right to a jury trial.
As part of a plea agreement with the U.S. Attorney's Office, Pitts admitted defrauding U.S. Bank of $180,069. Full restitution has been made.
The fraud was discovered in 2004 when Pitts defaulted on a residential loan with U.S. Bank. The loan was secured by a west Little Rock condominium that the bank discovered Pitts no longer owned.
Pitts deceived the bank by selling the condo in September 2003 and failing to pay off the mortgage while continuing to use the property as collateral for the loan.
On Dec. 30, 2004, U.S. Bank filed a foreclosure suit against Pitts seeking full repayment on the outstanding balance of the loan and more, which was nearly $180,000 at the time.
That case was settled on Jan. 28, but a criminal referral of the incident resulted in an investigation that culminated in today's guilty plea.
A sentencing hearing will be set later. Sentencing guidelines recommend up to 30 years imprisonment and a $1 million fine, however, a much lighter sentence is expected.
The bank fraud was alluded to in a "Whisper" in Arkansas Business on March 7, 2005. Pitts' problems with another mortgage and his brother's succeeding him as CEO of Beach were also reported in Arkansas Business last year.