John Stacks: Federal Charges 'Without Merit' But Not Surprising

Banker and business owner John Stacks has issued a statement denying any wrongdoing in his dealings with a Small Business Administration loan while complaining that a recent federal indictment was so vague that "we're not exactly sure what it is alleging."

Stacks, CEO and principal owner of HomeBank of Arkansas and owner of water bottler Mountain Pure LLC, was indicted last week by a federal grand jury in Little Rock on 11 counts related to the SBA disaster-related loan, which he received in 2009 after a tornado damaged his property at Damascus (Van Buren County).

Stacks is charged with three counts of wire fraud, three counts of money laundering, one count of submitting a false claim to the SBA and four counts of making false statements. The indictment (PDF) includes few details, but the government has accused Stacks of submitting false information about equipment that was supposedly damaged in the tornado and about Mountain Pure's financial condition at the time the loan was made.

In his statement (PDF), Stacks said he "wasn't entirely surprised" by the charges, which came nearly two years after a January 2012 raid on the Mountain Pure plant in southwest Little Rock. That raid is the subject of a federal civil lawsuit filed by Mountain Pure, Stack's son and other employees who were present when federal agents sealed and searched the premises, and it was also the subject of a video reenactment that's been posted online.

"I’m writing today because neither I nor my employees have done anything wrong," Stack wrote in the statement. "We have complied with instructions and requests of the [Federal Emergency Management Agency] and the SBA at every turn, and we have a great amount of paperwork documenting our efforts to resolve this matter."

The statement continued:

"The indictment filed this week is very vague, and to be perfectly honest, we’re not exactly sure what it is alleging. If it's attempting to claim that I unfairly profited from the tornado, nothing could be further from the truth. I am a principal owner of a financial institution, and I know that bankers are under tremendous scrutiny, and bankers who also own other businesses even more so.  All of my payments on this loan have been made on time, and after an IRS special audit following the raid last year, it was acknowledged in writing that my tax returns are complete and correct."

Saying that he knew that it would be hard to "trust in someone when the government comes after him in such an outrageous manner," Stacks said he would be happy to discuss the matter with "any of my neighbors who may be concerned."

No trial date has been set for Stacks.