Berry Bishop’s defunct Alliance Insurance Group of Arkadelphia reported $2.9 million in gross revenue in 2017. It filed for Chapter 7 bankruptcy in May 2018.
Supportive family members cried in a Hot Springs courtroom Friday morning as Berry R. Bishop, the Hot Springs insurance agent who also had offices in Prescott and Arkadelphia, was sentenced to five years in federal prison for bank fraud totaling more than $4.3 million.
Bishop, 68, who waived his right to a grand jury indictment and pleaded guilty to a single count of bank fraud last December, told U.S. District Judge Susan Hickey that he wanted to be a model of accountability. He apologized to his victims, including bankers he considered longtime friends; clients whose trust he betrayed by forging loans in their names and stealing their premiums; employees he let down; and the family he said had been “ripped … to shreds.”
The 60-month sentence was the minimum requested by federal prosecutors for the Western District of Arkansas, who noted the “lavish” lifestyle that Bishop had maintained with fraudulent loans — two homes, expensive vehicles, a boat and donations to the Razorback Foundation. But defense attorney Tyler Tapp of Hot Springs told the court that Bishop had actually been trapped under a snowball of debt and his lifestyle “could have been far, far better” had he not taken out his first fraudulent loan to tide over his Alliance Insurance Agency “years and years ago.”
That first criminal act, Tapp said, “led to many, many more.”
The crimes Bishop acknowledged in his plea agreement happened between February 2015 and January 2018. It’s not clear how many years before that he began supplementing his agency’s revenue through fraud; Tapp declined to answer any questions after the sentencing hearing.
“In the back of my mind I always knew and thought I would fix it,” Bishop told Judge Hickey.
Although there had at first been several disagreements over the scope and nature of Bishop’s crimes, the prosecution and defense ultimately agreed that there were 10 victims. They included Citizens Bank of Batesville; Southern Bancorp Inc. of Arkadelphia; and the Bank of Prescott.
Judge Hickey ordered Bishop to pay restitution of $250,000 to Citizens Bank for a loan made after Bishop misrepresented the value of stock in his company that he used as collateral. Bishop was also ordered to pay nearly $77,000 to United Fire & Casualty Co. of Cedar Rapids, Iowa, for premium Bishop collected but failed to forward; and $20,000 and $15,000 respectively to Supermarket Operations Inc. of Natchez, Mississippi, and Jade Inc. of Hamburg (Ashley County).
The crimes against Supermarket Operations and Jade Inc. were not specified in court or in Bishop’s plea agreement, but they seem to be insurance clients. Four unidentified clients were considered victims because Bishop use their identities to take out fraudulent loans, but they suffered no financial loss.
The exact amount of restitution due Bank of Prescott and Southern Bancorp has not been finalized because Bishop has already relinquished most of his property to them. “I lost it all and deservedly so,” Bishop told the court.
The Bank of Prescott loaned Bishop more than $2.1 million on phony applications in the names of his clients, creating a loss that helped push the $67 million-asset lender to sell to Farmers Bank & Trust of Magnolia. That sale is expected to be final Nov. 8.
Southern Bancorp paid Bishop’s agency $344,000 for a three-year insurance policy and ended up having to spend an additional $230,000 for coverage when Bishop failed to forward the premium to the carrier. Southern also lost $970,000 on defaulted loans to Alliance Insurance Agency.
Bishop’s defense agreed with prosecutors that he had abused a position of trust, but Tapp attempted to convince Hickey that Bishop’s scheme had not been especially sophisticated, a determination that could affect his sentence. Hickey disagreed, finding that the totality of Bishop’s years-long scheme was sophisticated even if the individual acts were not.
Tapp told Judge Hickey that his client has been diagnosed as bipolar and that his psychiatrist believes that contributed to his poor decisions.
Bishop was ordered to report to prison on Jan. 8. Hickey said she would recommend that he be incarcerated at the minimum security facility at Texarkana, Texas, and that he receive mental health treatment during his incarceration.
The 60-month sentence was the same that Hickey imposed on Steve Standridge of Mount Ida, an independent insurance agent who pleaded guilty to similar frauds in 2014. It was a significant variance from federal sentencing guidelines, which called for 97 to 121 months.
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