Posted 3/20/2013 01:12 pm
Updated 9 months ago
Former northwest Arkansas real estate developer Brandon Barber, 37, has been arrested in New York and charged with 30 counts, including bank fraud, money laundering, conspiracy to commit bankruptcy fraud, bankruptcy fraud, false statements and concealment of assets.
U.S. Attorney Conner Eldridge of the Western District of Arkansas, the FBI and the Internal Revenue Service announced the indictments at a news conference in Fort Smith early Wednesday afternoon.
According to court documents, others indicted include Fayetteville attorney K. Vaughn Knight, 46; James Van Doren, 37, of New York; Jeff Whorton, 45, of Johnson; and Brandon Rains, 31, of Springdale.
Barber was originally indicted on July 11, 2012. But that indictment, as well as a superseding indictment against Barber in August and one in January that also named Knight and Van Doren, were kept under seal. The third superseding indictment against Barber, Knight and Van Doren was issued on March 6 and unsealed on Wednesday.
On Jan. 16, Barber was separately indicted, along with Whorton and Rains, on one count of conspiracy to commit bank fraud and two counts of money laundering. That indictment was also unsealed on Wednesday.
The March 6 indictment includes 27 separate counts against Barber, Knight and Van Doren: 15 of money laundering, five of bank fraud, two each of bankruptcy fraud and conspiracy to commit bankruptcy fraud, and one each of concealment of assets, false statements and conspiracy to commit wire fraud.
According to a news release from the federal prosecutor, "Those schemes, as alleged in the indictments, include: (1) providing false and fraudulent financial information and statements to Legacy National Bank of Springdale in connection with loans to finance the Legacy Condominium building and project in Fayetteville; (2) providing false and fraudulent financial information and statements to Metropolitan National Bank of Little Rock and Enterprise Bank of St. Louis, Missouri, in connection with loans to finance the Bellafont project in Fayetteville; (3) concealing assets and income from creditors and the bankruptcy court by transferring funds to Van Doren and Knight or accounts controlled by them and using those funds for Barber’s personal benefit and expenses..."
Barber, the former son-in-law of Chambers Bank of Danville owner John Chambers and a 2003 Northwest Arkansas Business Journal 40 Under 40 honoree, filed bankruptcy in 2009. According to Eldridge's office, Knight was Barber’s bankruptcy attorney and Van Doren was a business associate. Rains, a former project manager for Barber's company, The Barber Group, was a 2007 NWABJ 40 Under 40 honoree.
"Before and after the bankruptcy filings, Barber, Knight, and Van Doren worked together to conceal assets from creditors and the court," a statement from Eldridge said. "These assets were hidden with various transactions and by utilizing several bank accounts, including Knight’s client trust account (also known as an IOLTA account)."
(More: Arkansas Business reported on Barber's and Van Doren's activities in New York in this December 2010 cover story.)
The January indictment alleges that, beginning in August 2008, Barber, Whorton and Rains were involved in a conspiracy to defraud First Federal Bank of Harrison.
"During this period, the three made false and fraudulent representations to First Federal when they concealed and misrepresented the sales prices of property in order to obtain higher loan amounts and generate excess cash, which they concealed from the bank," Eldridge's office said.
Barber was the developer behind the Legacy Building in Fayetteville, for which Metropolitan National Bank of Little Rock held a 47.3 percent stake. Metropolitan sold its stake in the building to The Broe Group of Denver last year.