Dennis Smiley, as a trustee of the Jones Trust of Springdale, participated in the March 2013 groundbreaking ceremony for the Webb Memorial Children Park on the campus of the Center for Nonprofits at St. Mary's in Rogers. Smiley resigned from the trust's board last month.
First Bank of Hampton on Wednesday joined the expanding roster of banks seeking to recover money loaned to Dennis Smiley, a former Arvest Bank executive who is under federal criminal investigation for loan fraud.
In a filing in Benton County Circuit Court, the bank said it loaned Smiley a total of $180,000 in October: $130,000 on Oct. 9 and $50,000 on Oct. 31. It said Smiley pledged as collateral more than 4,200 shares of stock in an executive incentive account held by Arvest.
The bank later declared the loans in default “due to false or misleading information provided by Smiley during the loan process.” It said Smiley had paid down the balance by only about $1,000.
To date, nearly a dozen banks have filed legal actions connected to the Smiley loans, which Arkansas Business sources have said could total more than $4.5 million.
Wednesday’s filing is an answer to an interpleader filed by Arvest Bank on April 2. In the interpleader, Arvest asked the court to take control of the $552,000 account Smiley had repeatedly pledged as collateral on the loans, a request the court granted.
That led to First Bank also taking aim at Arvest. In its Wednesday filing, First Bank said Arvest’s move to turn the Smiley account over to the court violates the control agreement Arvest signed allowing Smiley to use the value of the account as collateral on loans.
Whether Arvest actually approved the use of the stock as collateral is a point of contention. Arvest has said Smiley wasn’t authorized to pledge his interest in the account, but documents submitted by multiple lenders purportedly show that Arvest Bank officials signed the control agreements giving lenders security interest in Smiley’s account.
Faked Signatures?
In its Wednesday filing, First Bank said an Arvest Bank official signed off on Smiley’s use of his Arvest funds as collateral.
“Jeb Mills, as executive vice president, signed the control agreement on behalf of [Arvest Bank] as the intermediary,” the filing states. “Jeb Mills was duly authorized in his official corporate capacity to execute the control agreement on behalf of [Arvest].”
Other banks have cited similar documents in their answers to Arvest’s interpleader. They cite documents signed by Chad Evans, an Arvest executive vice president, and Euva Phillips, an Arvest senior vice president.
First State Bank of De Queen, which is led by Smiley’s father, H. Dennis Smiley Sr., also says Arvest officials signed off on Smiley’s use of the Arvest account as collateral.
It was Smiley Sr., in his answer to lawsuits by Bank of Fayetteville and Delta Trust & Bank of Little Rock, who first raised the possibility that signatures on some of Smiley loan documents might be phony. Smiley Sr. denied signing any documents associated with loans at the two banks, countering allegations that he was financially liable.
Smiley Jr. echoed his father’s statements in his only answer so far to the mounting lawsuits, filed last week. In response to Delta Trust’s lawsuit, Smiley Jr. denied most of the banks claims against him and acknowledged that his father’s signature on a promissory note “may not be the signature of Smiley Sr.”
The possibility of faked signatures isn’t the only hint of possible fraud. In its lawsuit, First State Bank of Lonoke claims Smiley Jr. submitted fraudulent financial statements for 2011, 2012 and 2013 when applying for loans.
Smiley was the CEO of Arvest Bank’s operations in Benton County. He resigned in March.
The court hasn’t set a date for a hearing in the case. Smiley Jr. has not been charged with any crime.
Also, Arvest on Thursday named Rodney Shepard as CEO of its Fort Smith operations. Shepard replaces former CEO Craig Rivaldo, who took Smiley’s place as CEO in Benton County.
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