Posted 4/2/2014 12:08 pm
Updated 9 months ago
Henry Dennis Smiley Jr, a former regional CEO of Arvest Bank, and his father have been sued for for defaulting on a $245,126 loan.
The loan made through the Bella Vista branch of Delta Trust & Bank is part of a criminal bank fraud investigation looking at a string of suspect loans obtained by the younger Smiley.
The loan to HDS Holdings LLC was personally guaranteed by Dennis Smiley Jr. and his father, according to Delta's complaint filed March 25 in Benton County Circuit Court.
Henry Dennis Smiley Sr. is chairman of First State Bank of De Queen, which also made a loan to his son that is linked with the federal probe.
"His mother and I are brokenhearted about it," the elder Smiley told Arkansas Business regarding his son's financial and legal problems. "I don't know everything that's happened, and I'm not sure if I could talk about it if I did."
"That's about all I can say," he said.
The Delta Trust loan was made on Feb. 20, and the Smileys failed to make the first payment due on March 20 — a week after the younger Smiley resigned as CEO of Arvest's Benton County market.
"Defendants have confessed that they are either unable or unwilling to pay the obligations owed," according to the complaint.
The debt is among a roster of similar loans secured by HDS Holdings and Dennis Smiley Jr.'s stake in an executive compensation account tied to the value of Arvest Bank stock.
Uniform Commercial Code financing documents show that the same stock has been pledged in similar loan agreements with eight other lenders, and sources familiar with the case have told Arkansas Business that Smiley's loan fraud scheme touched a total of 18 lenders, including banks that did not file UCCs and banks that made unsecured loans.
Dennis Smiley allegedly used the same collateral over and over to secure loans, and his total debt including unsecured loans is believed to be $4.5 million or more.