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            [title] => Jury Finds Brandon Barber's Lawyer, K. Vaughn Knight, Guilty on Eight Counts
            [summary] => K. Vaughn Knight, the attorney for Brandon Barber, was found guilty in U.S. District Court in Fort Smith on eight counts including bankruptcy fraud and money laundering.
            [content] => 

UPDATE: In June 2014, U.S. District Judge P.K. Holmes III made the rare move of tossing out a jury’s guilty verdict against K. Vaughn Knight on eight counts including bankruptcy fraud and money laundering. Holmes ordered a new trial on seven of the counts and acquitted Knight of a count involving making false statements related to a bankruptcy case, of which the jury had found him guilty in November.

A jury in U. S. District Court in Fort Smith on Monday found K. Vaughn Knight, the attorney for former northwest Arkansas real estate developer Brandon Barber, guilty on eight counts including bankruptcy fraud and money laundering.

The jury found Knight guilty on five counts of money laundering, one count of conspiracy to commit bankruptcy fraud, bankruptcy fraud and false statements, ends the criminal cases involving Barber. Knight's trial started on Nov. 4.

Knight, 46, faces up to five years in prison and a $250,000 fine on each of the bankruptcy fraud and money laundering charges and 10 years in prison and a $250,000 fine on each of the money laundering charges.

"This case has always been about fraud," Conner Eldridge, U.S. Attorney for the Western District of Arkansas, said in a news release. "The evidence showed that Vaughn Knight agreed with Brandon Barber to conceal a large sum of money by using his lawyer's trust account and then did not tell the Bankruptcy Court about those funds. This conduct prevented honest, hard-working subcontractors and other creditors from having a chance to recover at least some of the money they were owed."

At the end of July, Barber pleaded guilty to his role in schemes that provided false documents and information about loans and real estate to banks including Legacy National Bank of Springdale and Metropolitan National Bank of Little Rock. On July 31, he pleaded guilty to conspiracy to commit bankruptcy fraud, conspiracy to commit bank fraud and money laundering.

Jeff Whorton pleaded guilty in August to conspiring with Barber and Brandon Rains to inflate the value of real estate transactions in order to get bigger loans from First Federal Bank of Harrison. Rains pleaded guilty on Oct. 17 to a single count of making a fraudulent representation to the FBI.

Another co-defendant, James Van Doren, Barber's business associate, pleaded guilty in August to a single count of money laundering for helping Barber hide money from his creditors in Barber's bankruptcy case.

And David Fisher, a Rogers attorney accused of conspiring with Barber, Rains and Whorton, was acquitted last month at his jury trial.

Neither Barber nor the rest of the felons have been sentenced.

Update: In June 2014, U.S. District Judge P.K. Holmes III made the rare move of tossing out a jury’s guilty verdict against K. Vaughn Knight on eight counts including bankruptcy fraud and money laundering. Holmes ordered a new trial on seven of the counts and acquitted Knight of a count involving making false statements related to a bankruptcy case, of which the jury had found him guilty in November.

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David Fisher, a Rogers attorney accused of conspiring with convicted northwest Arkansas developer Brandon Barber, was acquitted Wednesday in federal court.

After deliberating for about an hour and 25 minutes, the jury acquitted Fisher of one count of conspiring to commit bank fraud, court records show. Fisher, who was defended by Little Rock attorney Tim Dudley, testified in his own defense during the trial, which began Monday.

The acquittal comes after another Barber co-defendant, Brandon Rains, pleaded guilty to a federal crime on Thursday.

Rains, who had been charged with one count of conspiracy to commit bank fraud and one count of money laundering, made a deal Thursday in which prosecutors dropped the original charges and instead elicited a guilty plea to a single count of making a fraudulent representation to the FBI.

Rains' plea was accepted by U.S. District Judge P.K. Holmes III, but no sentencing date has been scheduled.

Barber pleaded guilty to his role in the cases at the end of July. A third co-defendant, James Van Doren, pleaded guilty in August to a single count of money laundering for helping Barber hide money from his creditors. A fourth defendant in that case, Fayetteville attorney K. Vaughn Knight, is set for trial on 11 counts including bankruptcy fraud  and money laundering beginning Nov. 4. 

Another northwest Arkansas developer didn’t live long enough to be indicted. Gary Combs, who died last year in California at age 59, was the individual described in the Barber, Whorton and Rains indictment as “a person known to the grand jury,” documents suggest and sources have confirmed to Arkansas Business

[caption] => [status] => publish [published_on] => 2013-10-23 13:53:00 [updated_on] => 2013-10-23 14:34:03 [created_on] => 2013-10-23 14:05:18 [creator_id] => 18 [updater_id] => 63 [author_id] => 61 [author_other_name] => [author_other_email] => [legacy_id] => [legacy_post_id] => [slug] => brandon-barber-co-defendant-david-fisher-acquitted [legacy_id_family] => [expired] => 0 [high_res] => ) [1] => stdClass Object ( [id] => 95228 [title] => Barber Co-Defendant Brandon Rains Pleads Guilty [summary] => Yet another co-defendant of bankrupt northwest Arkansas developer Brandon Barber pleaded guilty to a federal crime on Thursday. Brandon Rains, who had been charged with one count of conspiracy to commit bank fraud and one count of money laundering, made a deal with federal prosecutors. [content] =>

Yet another co-defendant of bankrupt northwest Arkansas developer Brandon Barber pleaded guilty to a federal crime on Thursday.

Brandon Rains, who had been charged with one count of conspiracy to commit bank fraud and one count of money laundering, made a deal in which prosecutors dropped the original charges and instead elicited a guilty plea to a single count of making a fraudulent representation to the FBI.

His plea was accepted by U.S. District Judge P.K. Holmes III, but no sentencing date has been scheduled.

More: Read the information document in the Brandon Rains case (PDF).

Specifically, Rains admitted that he lied when he told FBI and Internal Revenue Service agents that he didn't know of any cash kickbacks on real estate transactions funded by loans from an FDIC-insured bank - First Federal Bank of Harrison - "when in fact he was aware that he had received a cash payment from the seller" of a lot in Executive Square in Sprindale. This false statement was made in July 2011, according to the information filed the U.S. Attorney's Office in Fort Smith.

Rains became the fourth man to plead guilty in a set of indictments that had Barber as the common denominator. Jeff Whorton pleaded guilty in August to conspiring with Barber, Rains and a fourth defendant, David Fisher, to inflate the value of real estate transactions in order to get bigger loans from First Federal Bank of Harrison.

David Fisher's attorney, Tim Dudley of Little Rock, said the case against him will go to trial on Monday as scheduled.

Barber had pleaded guilty in both cases at the end of July, and James Van Doren pleaded guilty in August to a single count of money laundering for helping Barber hide money from his creditors. A third defendant in that case, Fayetteville attorney K. Vaughn Knight, is set for trial on 11 counts including bankruptcy fraud  and money laundering beginning Nov. 4.

[caption] => [status] => publish [published_on] => 2013-10-17 15:06:00 [updated_on] => 2013-10-17 15:31:57 [created_on] => 2013-10-17 15:09:06 [creator_id] => 18 [updater_id] => 18 [author_id] => 63 [author_other_name] => [author_other_email] => [legacy_id] => [legacy_post_id] => [slug] => barber-co-defendant-brandon-rains-pleads-guilty [legacy_id_family] => [expired] => 0 [high_res] => ) [2] => stdClass Object ( [id] => 94303 [title] => Brandon Barber's Co-Defendant Jeff Whorton Pleads Guilty [summary] => Jeff Whorton, a co-defendant in one of two federal cases involving bankrupt northwest Arkansas real estate developer Brandon Barber, pleaded guilty Monday to conspiracy to commit bank fraud and money laundering. [content] =>

Jeff Whorton, a co-defendant in one of two federal cases involving bankrupt northwest Arkansas real estate developer Brandon Barber, pleaded guilty Monday to conspiracy to commit bank fraud and money laundering.

Federal prosecutors in the Western District of Arkansas have now elicited guilty pleas from Barber and one co-defendant in each of the separate cases. On Friday, James Van Doren pleaded guilty to a single count of money laundering for helping Barber hide money from his creditors.

Whorton admitted conspiring with Barber and two other co-defendants, Brandon Rains and David Fisher, to inflate the value of real estate transactions in order to get bigger loans from First Federal Bank of Harrison. The additional money was then divided up among the conspirators, which included northwest Arkansas developer Gary Combs, who died in August 2012, before the indictments were handed down.

Click here to read Whorton's plea agreement (PDF).

Combs, who was identified by Arkansas Business as the "unnamed co-conspirator" in the case in June, was finally named by prosecutors in court on Monday, according to the Arkansas Democrat-Gazette's report.

Rains and Fisher, who have pleaded not guilty, are scheduled for trial on Oct. 21. Rains had briefly scheduled a change-of-plea hearing for July 31 but backed out.

In the other case involving Barber, one co-defendant remains scheduled for trial: Fayetteville attorney K. Vaughn Knight. He and his attorneys have asked for a delay in the trial currently scheduled for Sept. 16.

[caption] => Jeff Whorton pleaded guilty Monday to one count of conspiracy to commit bank fraud and one count of money laundering. [status] => publish [published_on] => 2013-08-27 09:20:00 [updated_on] => 2013-08-27 17:24:43 [created_on] => 2013-08-27 09:24:47 [creator_id] => 63 [updater_id] => 27 [author_id] => 63 [author_other_name] => [author_other_email] => [legacy_id] => [legacy_post_id] => [slug] => barber-co-defendant-jeff-whorton-pleads-guilty [legacy_id_family] => [expired] => 0 [high_res] => ) [3] => stdClass Object ( [id] => 94266 [title] => Brandon Barber Co-Defendant James Van Doren Pleads Guilty to 1 Count of Money Laundering [summary] => James Van Doren, a co-defendant in a federal indictment involving former northwest Arkansas developer Brandon Barber, pleaded guilty Friday to one count of money laundering and agreed to pay $22,000. [content] =>

James Van Doren, a co-defendant in a federal indictment involving former northwest Arkansas developer Brandon Barber, pleaded guilty Friday to one count of money laundering and agreed to pay $22,000.

In exchange for the plea agreement, Conner Eldridge, U.S. Attorney for the Western District, agreed to drop the six counts remaining against Van Doren, including bankruptcy and wire fraud. Van Doren faces a maximum 10 years in prison and a $250,000 fine when he is sentenced at a later date.

Van Doren, a New York investment banker and former friend and business associate of Barber, admitted he helped Barber hide $64,000 from creditors in 2008. Barber filed for bankrupcy protection in 2009.

Barber pleaded guilty to three counts on July 31. He was facing 27 counts from two different indictments.

Van Doren and Barber first developed a friendship when growing up in Jonesboro. They later became business associates. But that friendship has soured.

Van Doren sued Barber and co-defendant K. Vaughn Knight on July 19, alleging that he was defrauded by the two as part of a real estate deal that ultimately led to Van Doren being "unnecessarily placed under the scrutiny of federal regulators and law enforcement." The civil case is pending in Washington County Circuit Court.

Knight hasn't filed a plea yet. Other Barber co-defendants are Jeff Whorton, Brandon Rains and David Fisherm, who were part of a separate indictment involving fraud and money laundering, and their trials are scheduled for Oct. 21. 

Sentencing for Barber and Van Doren would likely be delayed until the criminal trial is complete.

[caption] => [status] => publish [published_on] => 2013-08-23 14:52:00 [updated_on] => 2013-08-23 15:24:38 [created_on] => 2013-08-23 15:01:13 [creator_id] => 28 [updater_id] => 69 [author_id] => 69 [author_other_name] => [author_other_email] => [legacy_id] => [legacy_post_id] => [slug] => barber-co-defendant-james-van-doren-pleads-guilty-to-1-count-of-money-laundering-6-counts-dropped [legacy_id_family] => [expired] => 0 [high_res] => ) [4] => stdClass Object ( [id] => 93851 [title] => Brandon Barber Pleads Guilty to 3 Counts in Bank Fraud Case [summary] => Former northwest Arkansas developer Brandon Barber entered guilty pleas to three counts Wednesday in federal court in Fort Smith, changing previously entered not-guilty pleas in a pair of federal indictments pending against him. [content] =>

Former northwest Arkansas developer Brandon Barber entered guilty pleas to three counts Wednesday in federal court in Fort Smith, changing previously entered not-guilty pleas in a pair of federal indictments pending against him.

Barber, 37, had faced 27 counts in schemes that provided false documents and information about loans and real estate to banks including Legacy National Bank of Springdale and Metropolitan National Bank of Little Rock. On Wednesday, he pleaded guilty to conspiracy to commit bankruptcy fraud, conspiracy to commit bank fraud and money laundering.

The court dismissed the remaining 24 counts.

The maximum penalty for conspiracy to commit bankruptcy fraud is five years in prison and a $250,000 fine. The maximum penalty for conspiracy to commit bank fraud is 30 years in prison and a $1 million fine. The maximum penalty for money laundering is 10 years in prison and a $250,000 fine.

Barber, wearing an orange and white jail jumpsuit, appeared in court with his attorneys, W. Asa Hutchinson III and Asa Hutchinson of the Asa Hutchinson Law Group in Rogers. Asa Hutchinson III said Barber's sentencing would take place after two other trials involving co-defendents charged on the same indictments.

Barber has been in the Washington County jail for more than a month after his bond was revoked for repeatedly violating the terms of his release. He said little during the hearing. He told U.S. District Judge P.K. Holmes that he is working on getting a master's degree. 

Once the case reaches the sentencing phase, Holmes can consider a number of factors, including sentencing guidelines and a defendant’s willingness to testify against others involved in the case. Barber's plea agreement requires him to cooperate with all investigations and to testify as requested by the government.

Although the number of charges against him was reduced from 27 to three, when it comes time for sentencing, "relevant conduct" - which includes the dismissed charges - can be considered. It isn't clear from the plea agreement just how much Barber's victims lost, which may be a factor in his sentence.

More: Read the plea agreement (PDF).

Arkansas Business reported Monday that a change of plea was scheduled. On Wednesday, Asa Hutchinson III said his client has "accepted responsibility and he's remorseful."

"Brandon came to the conclusion on his own, voluntarily, that the right thing to do is take responsibility and plead guilty," Asa Hutchinson III said. "... Nothing dictated the timing other than natural development of Brandon's thought process." 

Speaking to reporters after the hearing, Western District U.S. Attorney Conner Eldridge said prosecuting crimes that grew out of the financial boom in northwest Arkansas was a priority for his office.

"We’re dedicated, as this case shows, to investigating and prosecuting fraudulent conduct, those who would swindle people out of money and others who would perpetuate white-collar crimes," he said. "… Financial crimes take a real toll on our society and certainly have in northwest Arkansas, the rest of the district and the state. That’s why we’re focused on them. This case shows we intend to maintain that focus."

Eldridge said Barber's plea was a good deal for the government.

"Mr. Barber has been convicted of three counts and the totality of his conduct will be able to be considered by the court at sentencing," he said. "We’re pleased with that. We’ll continue to move on with the case."

Brandon Rains

A co-defendant in one of Barber's indictments, Brandon Rains, was also scheduled to change his previous not-guilty plea during a 3:30 p.m. hearing Wednesday. But that hearing was canceled on Wednesday, and Rains' jury trial was reset for Oct. 21. In that trial, Barber was to be tried with Rains, Jeff Whorton and David Fisher on charges of bank fraud and money laundering.  

Rains' attorney, Blake Hendrix of Little Rock, said he was not able to make a comment on the canceled plea hearing. He said he now anticipates that his client will go to trial.

Another trial had been set for Barber on Sept. 16 -- the case that alleged money laundering and bankruptcy fraud by Barber and two co-defendants, his former attorney K. Vaughn Knight and a business associate, James Van Doren. 

Van Doren's request to be tried separately was denied, and he has filed a civil lawsuit accusing Barber and Knight of doctoring real estate closing statements to make it appear Van Doren and his company received $688,937 that really went to Barber and Knight. Barber's plea agreement says Van Doren received $152,735 while the remainder was used by Barber.

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First James Van Doren attempted to have his criminal trial separated from that of former northwest Arkansas real estate developer Brandon Barber and Barber’s lawyer, K. Vaughn Knight.

Now Van Doren and his defunct company, Epsilon Investments LLC, have sued Barber and Knight in Washington County Circuit Court. The complaint (PDF) filed by Fayetteville attorney Rick Woods on July 19 appears to be another attempt by Van Doren to separate himself from his co-defendants in a federal court trial for money laundering and bankruptcy fraud that is scheduled to start on Sept. 16.

Barber and Knight "have triggered a prosecution by the U.S. Attorney for the Western District of Arkansas against Van Doren as a direct and proximate result of Barber and Knight's actions," according to the suit.

Van Doren asks for unspecified compensatory and punitive damages.

The complaint describes a convoluted deal dating back to July 2007. Barber, according to the complaint, persuaded Van Doren to take possession of four residential lots in the Timber Trail subdivision of Fayetteville in July 2007 and to obtain financing for the construction of houses on the lots.

Construction delays forced Van Doren to pay $10,000 to settle liens filed by subcontractors, he claims in the suit. What's more, Van Doren alleges that Barber "significantly marked up the costs" of the Timber Trail properties "due to a credit crunch," so that the finished houses would sell for $30,000 to $40,000 less than Van Doren had been led to believe.

Ultimately, Van Doren claims, the four properties were sold on the last day of March 2008 in a "flip," first to a company called JDL LLC and then immediately to another company called Outfield Development LLC. But instead of settling accounts as outlined in an escrow agreement, Barber and Knight allegedly listed Van Doren's Epsilon Investments on closing documents as the recipient of the $688,937 settlement check.

More: Click here (PDF) to see exhibits in the case.

Van Doren says he did not learn that his company was listed on the settlement statement until two years later, when he was deposed by a creditor in Barber's bankruptcy case. He alleges in the civil suit that the money was actually paid to some "third-party entity or person" that was not party to the transaction but which was under the control of Barber and Knight.

Van Doren alleges that Knight and Barber put Epsilon on the settlement statement "to disguise the fact that the funds were actually going to Barber via Knight, which unnecessarily placed [Van Doren] under the scrutiny of federal regulators and law enforcement."

Woods, who is representing Van Doren in the civil case, could not immediately be reached for comment. Lance Cox is representing Van Doren in the criminal case and did not immediately respond to an interview request. Asa Hutchison III, who is representing Barber in the criminal cases, and David Matthews, who is representing Knight in the criminal case, did not immediately respond to interview requests. It is unclear if Matthews and Hutchison are representing Knight and Barber in the civil case as well.

On July 10, U.S. District Judge P.K. Holmes of Fort Smith denied Van Doren's motion to be tried separately from Barber and Knight. Van Doren and Barber first developed a friendship when growing up in Jonesboro. They later became business associates.

Federal prosecutors allege that Van Doren committed a crime by knowingly shielding money from creditors to help Barber pay for personal expenses. While Barber was charged with 26 counts, Van Doren was charged with seven: three counts of money laundering and one count each of bankruptcy fraud, conspiracy to commit bankruptcy fraud, wire fraud and conspiracy to commit money laundering. Each count carries potential prison time of between five and 20 years and fines up to $250,000.

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Jury Finds Brandon Barber's Lawyer, K. Vaughn Knight, Guilty on Eight Counts | Arkansas Business News | ArkansasBusiness.com

Jury Finds Brandon Barber's Lawyer, K. Vaughn Knight, Guilty on Eight Counts

UPDATE: In June 2014, U.S. District Judge P.K. Holmes III made the rare move of tossing out a jury’s guilty verdict against K. Vaughn Knight on eight counts including bankruptcy fraud and money laundering. Holmes ordered a new trial on seven of the counts and acquitted Knight of a count involving making false statements related to a bankruptcy case, of which the jury had found him guilty in November.

A jury in U. S. District Court in Fort Smith on Monday found K. Vaughn Knight, the attorney for former northwest Arkansas real estate developer Brandon Barber, guilty on eight counts including bankruptcy fraud and money laundering.

The jury found Knight guilty on five counts of money laundering, one count of conspiracy to commit bankruptcy fraud, bankruptcy fraud and false statements, ends the criminal cases involving Barber. Knight's trial started on Nov. 4.

Knight, 46, faces up to five years in prison and a $250,000 fine on each of the bankruptcy fraud and money laundering charges and 10 years in prison and a $250,000 fine on each of the money laundering charges.

"This case has always been about fraud," Conner Eldridge, U.S. Attorney for the Western District of Arkansas, said in a news release. "The evidence showed that Vaughn Knight agreed with Brandon Barber to conceal a large sum of money by using his lawyer's trust account and then did not tell the Bankruptcy Court about those funds. This conduct prevented honest, hard-working subcontractors and other creditors from having a chance to recover at least some of the money they were owed."

At the end of July, Barber pleaded guilty to his role in schemes that provided false documents and information about loans and real estate to banks including Legacy National Bank of Springdale and Metropolitan National Bank of Little Rock. On July 31, he pleaded guilty to conspiracy to commit bankruptcy fraud, conspiracy to commit bank fraud and money laundering.

Jeff Whorton pleaded guilty in August to conspiring with Barber and Brandon Rains to inflate the value of real estate transactions in order to get bigger loans from First Federal Bank of Harrison. Rains pleaded guilty on Oct. 17 to a single count of making a fraudulent representation to the FBI.

Another co-defendant, James Van Doren, Barber's business associate, pleaded guilty in August to a single count of money laundering for helping Barber hide money from his creditors in Barber's bankruptcy case.

And David Fisher, a Rogers attorney accused of conspiring with Barber, Rains and Whorton, was acquitted last month at his jury trial.

Neither Barber nor the rest of the felons have been sentenced.

Update: In June 2014, U.S. District Judge P.K. Holmes III made the rare move of tossing out a jury’s guilty verdict against K. Vaughn Knight on eight counts including bankruptcy fraud and money laundering. Holmes ordered a new trial on seven of the counts and acquitted Knight of a count involving making false statements related to a bankruptcy case, of which the jury had found him guilty in November.