Update: Martha Shoffner Indicted On 10 Counts of Mail Fraud

Former Arkansas Treasurer Martha Shoffner, already set for trial next month on the bribery and extortion charges that prompted her resignation last year, was indicted Thursday on 10 new counts of mail fraud.

The indictment by a federal grand jury in Little Rock alleges that Shoffner used $9,800 in campaign funds from her treasurer re-election campaign for personal expenses, including clothing, cosmetics and other personal expenses, according to an announcement from U.S. Attorney Chris Thyer. The actual indictment was not immediately available.

Read the Indictment: Click here (PDF) to download the indictment.

According to the indictment, campaign checks were mailed for payments to a personal Wells Fargo credit card from Nov. 5, 2010, through Oct. 9, 2011. Individual checks ranged from $200 to $5,000.

Shoffner's defense attorney, Chuck Banks of Little Rock, told Arkansas Business late Thursday that he hadn't seen the new indictment but that he expects Shoffner to plead not guilty. Shoffner is scheduled to be arraigned on the new charges at 10 a.m. Feb. 27.

The U.S. Attorney's office said mail fraud carries a possible sentence of not more than 20 years' imprisonment, not more than a $250,000 fine and not more than three years of supervised release.

The new counts, announced by Eastern District U.S. Attorney Christopher Thyer and the FBI, are in addition to the 14 other counts of extortion and receiving a bribe that Shoffner faces. 

Trial for those charges was already set for March 3 before U.S. District Judge J. Leon Holmes, and Banks has indicated that the trial will go forward as scheduled.

Gathering Evidence

In the hours before the superseding indictment was announced, Banks and federal prosecutors traded court filings.

In January, Banks filed a motion asking for evidence favorable to the defense, and on Thursday, prosecutors filed a response saying they had turned over everything they had. They said Banks should use his own subpoena power to get documents from state agencies like the Arkansas Securities Department and the Division of Legislative Audit, which had investigated bond trades in Shoffner's office.

Meanwhile, Banks amended his motion to specifically ask that the government be required to transcribe a recording that prosecutors had turned over to him on Wednesday.

The disc contains a one-hour conversation between an employee of the treasurer's office, identified only as "John Doe," and the unindicted broker-dealer who allegedly bribed Shoffner, the one called "Confidential Human Source 1." The recording "contained unintelligible portions," according to Banks' motion.

"Listening to the understandable portion of this conversation, it readily appears that exculpatory information is contained in it and will be important to the Defendant's preparation of her defense," Banks wrote. "The recording clearly suggests that John Doe and CHS1 discussed Defendant's lack of understanding or knowledge of bond transactions and this counsel believes it will be extremely material to guilt or punishment."

Banks asked Judge Holmes to order the government to transcribe the recording "in full and in a reasonably prompt time so as to be of proper use by Defendant."

"This timeliness becomes more important in having just been told that the United States Attorney's Office has superseded the Indictment and added additional accusations of mail fraud, for which the Defendant will not seek a continuance of the scheduled trial date."

Shoffner was arrested at her Newport home May 18 after the FBI said it caught her on tape accepting a $6,000 payment from a broker who had done business with her office. Prosecutors allege Shoffner received at least $36,000 in bribes from the unnamed broker so Shoffner's office would do business with that broker.

The original, 14-count indictment, handed down June 5, came less than a week after Shoffner's plan to plead guilty to a single charge of extortion broke down when she admitted in court that she accepted the cash payments from the bond broker, but denied that it influenced her official decisions.

U.S. Attorney's News Release on New Charges

From Thursday's news release:

Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas; and David T. Resch, Special Agent in Charge of the Little Rock Field Office of the Federal Bureau of Investigation announced that new charges were handed down by a federal grand jury charging Martha Anne Shoffner, age 69, of Newport with ten counts of mail fraud. 

The Second Superseding Indictment alleges that Shoffner used $9,800 of campaign funds from her re-election campaign for Treasurer of the State of Arkansas for personal expenses.  According to the Indictment, campaign checks were mailed for payments to a personal Wells Fargo credit card from November 5, 2010 through October 9, 2011.  Individual checks ranged from $200 to $5,000.  The charges to the credit card included clothing, cosmetics and other personal expenses. 

The new counts of mail fraud against Shoffner are in addition to the previous six counts of extortion under color of official right, one count of attempted extortion and seven counts of receipt of a bribe by an agent of a state government receiving federal funds.  Trial is set for March 3, 2014, before United States District Judge J. Leon Holmes.

The charges stem from an investigation by the Federal Bureau of Investigation’s ArkTrust Public Corruption Task Force.  The ArkTrust Public Corruption Task Force is comprised of FBI Agents, and Task Force Officers from the Arkansas State Police Department, Pulaski County Sheriff’s Office, and the Little Rock Police Department. If you think you see public corruption contact the public corruption hotline at (501)221-8200.

Mail fraud carries a possible sentence of not more than 20 years’ imprisonment and/or not more than a $250,000 fine with not more than three years of supervised release.

An indictment contains only allegations. A defendant is presumed innocent unless and until proven guilty.