Former Craighead County Clerk Jacob “Kade” Holliday repeatedly cited his Fifth Amendment right against self-incrimination during a bankruptcy proceeding on Friday when creditors asked him what happened to hundreds of thousands of dollars.
In June, Holliday, 32, resigned from office after allegations surfaced that he had embezzled more than $1.6 million from taxpayers. Earlier this month, Holliday was indicted on 11 counts of federal wire fraud for allegedly taking more than $1.4 million in county money for his personal use.
Holliday also filed for Chapter 7 bankruptcy liquidation in October, listing $3.8 million in debts and $1.6 million in assets.
During Friday's telephone conference, Holliday’s creditors were able to question him under oath.
In the bankruptcy petition, Holliday listed that he received $82,000 from a Paycheck Protection Program loan for Total Healthcare LLC, which operates as Twisted Foods of Jonesboro, a meal preparation company. Holliday listed he owned 35% of the company.
An attorney for Twisted Foods, Harry Hurst Jr. of Parker Hurst & Burnett PLC of Jonesboro, asked Holliday what happened to that money.
“At the advice of my attorneys, I’m choosing to invoke my Fifth Amendment rights,” Holliday said.
If the money wasn’t used to help keep Twisted Foods afloat during COVID-related shutdowns, it could be considered fraud.
Holliday’s attorney, Dustin McDaniel of the law firm McDaniel Wolff & Benca PLLC of Little Rock, declined on Tuesday to speculate on how the PPP loan may ultimately affect the outcome of Holliday’s criminal case.
“But Mr. Holliday has been forthcoming with the government on that issue as well as many others,” McDaniel told Arkansas Business.
Total Healthcare also has a lawsuit against Holliday pending in Craighead County Circuit. That lawsuit is on hold while Holliday is in bankruptcy. In the complaint, Total Healthcare alleges that Holliday or his company received $154,500 from Total Healthcare’s bank accounts in May and June.
“I’ve got a number of questions about those payments and withdrawals,” Hurst said during the proceeding on Friday. “First of all, what happened to those funds?”
After citing his Fifth Amendment right, Holliday said he would do the same for any question asked about Total Healthcare’s claims.
In bankruptcy, if a debtor can’t explain what happened to his assets, it could prevent him from getting a discharge, Hurst told Holliday.
“So my question for you is even if you don’t want to testify, which is your right, can you point me to any information which may counter my client’s allegations that you received the sums of money that I have identified?” Hurst said. Holliday again invoked the Fifth Amendment.
Another creditor, Kapitus Servicing Inc., which provides small business loans, also quizzed Holliday about a $124,300 loan to Total Healthcare that Holliday personally guaranteed in July 2019.
“In the application for that funding, you said you were the 100% owner of Total Healthcare, … is that right?” said Kapitus’ attorney, James Gramling of Jonesboro.
Holliday invoked his Fifth Amendment right.
Meanwhile Holliday’s criminal charges are pending.
The maximum penalty for wire fraud is up to 20 years in federal prison, a fine of up to $250,000 and up to three years of supervised release. And, if convicted on any of the 11 counts, Holliday has to forfeit all property traced to the crime.
