Bank of Little Rock’s position among creditors battered by the financial wheeling and dealing of John Rogers is uncertain. But the $203 million-asset lender was first in line to accuse Rogers of fraud among the growing crowd of litigants pursuing him in Pulaski County Circuit Court.
The bank’s $590,833 claim against the embattled 42-year-old photo and sports memorabilia dealer outlines a case of loan fraud.
That allegation also triggered a suspicious activity report with federal authorities, a private filing that leads to criminal scrutiny for the offender.
Documents obtained by Arkansas Business add more details to the legal narrative that Bank of Little Rock began six months ago with its Dec. 31 court filing against Rogers. The bank records provide a glimpse into the chaotic and curious flow of money in the world of John Rogers.
Bank of Little Rock funds that were wire transferred to Oregon to buy business equipment instead returned to Rogers through the Arkansas bank account of a high school football buddy: Earl Scott.
No criminal charges have been filed against Scott, who played on the offensive line alongside Rogers at North Little Rock and went on to play for the Arkansas Razorbacks (1992-95).
The same goes for Rogers, the subject of a criminal investigation involving a Ponzi-style investment scheme, counterfeit sports memorabilia and more.
What Scott did or didn’t know about the money that moved through his free small-business checking account at Bank of the Ozarks is unclear. Attempts to contact him were unsuccessful.
Here is what bank documents and Bank of Little Rock’s court filings indicate happened:
• On Dec. 23, 2013, Rogers closed on a two-year loan of $900,000 with the bank. The money was supposed to buy computer equipment to support digital copying operations at his Sports Cards Plus Inc., now under the care of a court-appointed receiver and now owned by his ex-wife, Angelica.
The Bank of Little Rock loan was supported by a now-suspect, two-page sales order attributed to Demos Digital Media LLC, formed in March 2013. The articles of organization list Elizabeth Kraus, a Portland, Oregon, attorney as the organizer.
However, the address on the purported sales order matches the Alberty Asset Management office in Beaverton, Oregon. Alberty is an independent registered investment advisory firm. Selling electronics isn’t listed among its fee-only services, which include retirement planning and wealth management.
• On Dec. 26, 2013, Rogers had Bank of Little Rock funds wired to Oregon; $655,230 was wired back to Arkansas from a Wells Fargo Bank account in the name of Demos Digital Media.
• Also on Dec. 26, 2013, a $650,230 check was written on the Scott account to John Rogers. Markings on the check ($5,000 less than the Demos Digital wire transfer) indicate the funds were deposited in a Centennial Bank account.
Scott had owned a house in Bryant since 2005 but lost it in January at a $162,000 foreclosure sale. Before his association with Rogers, his most recent renown was as a member of the committee of six former UA football players who brought Houston Nutt in as head coach of the Razorback program in 1998.
Sources report that Scott helped Rogers sell photos and other merchandise through eBay accounts.
Additional Rogers-related transactions that flowed through Scott’s bank account include:
• Dec. 16, 2013: $7,500 check to Crystal Sweeney, described as a girlfriend of John Rogers in an April deposition of Leo Bauby, a former business associate of Rogers.
• Dec. 17, 2013: $292,880 check to Rogers.
• And on March 7, 2014, several checks, including:
- $15,000 to George Demos (not connected with Demos Digital). Demos, of Kenosha, Wisconsin, his brother, Steve, and their Demos Enterprises LLC have a $3.5 million claim against Rogers for unpaid loans and unfulfilled revenue sharing.
- Two $10,000 checks to David Hoffman of Santa Cruz, California. Hoffman is seeking $80,000 owed on the $325,000 sale of his namesake video and photograph archive to Rogers in May 2012.
- $8,500 to Marvin Newman of Jersey City, New Jersey, a monthly payment on a $400,000 advance on sales from his sports photo archives. New-man is seeking to terminate the archive sales agreement and the return of his photo assets.
• March 8, 2014: $10,000 to Blake Hendrix of Little Rock, retained by John Rogers as his criminal defense attorney.
A month after Rogers accomplished the Bank of Little Rock-Demos Digital transaction, federal agents executed search warrants at his business and his grand home in North Little Rock on Jan. 28, 2014.
As portrayed in its complaint, the bank’s financial relationship with Rogers began with a $900,000 lie. Rogers borrowed the money for the stated purpose of buying business equipment, income-producing assets that would secure the loan.
According to the bank, that didn’t happen.
Bank of Little Rock officials later learned it essentially had an unsecured loan and scrambled to find collateral.
That produced a new financing agreement in March 2014 secured by 2.4 million photographs and 15.9 million negatives from the Salt Lake Tribune, San Jose Mercury News, Contra Costa Times and El Paso Times.
Even these assets are in dispute.
First Arkansas Bank & Trust claims a security interest tied to its $15.2 million judgment against Rogers and his former businesses.
However, that claim is in contention by the original owners of the newspaper archives, affiliates of Digital First Media of New York. The businesses say Rogers failed to provide a digital copy of their archives and therefore they still own the assets.
They maintain that position even though 13 Digital First affiliates didn’t have written agreements with Rogers yet turned over their archives to him.
(Also see: Snapshot: A Guide to John Rogers' Legal Problems)