It looks like the federal government is taking an interest in the former Jonesboro accountant Edward M. Cooper Jr., who allegedly embezzled $8.9 million from his former client — double what was initially revealed.
As of Wednesday, Cooper hadn’t been charged with any crime. But he is being investigated by the feds, according to Scott Ellington, prosecuting attorney for the 2nd Judicial District, which covers Jonesboro.
“Federal authorities have called dibs on that case,” Ellington said. “We stand ready to assist, if necessary, but right now, we’re staying out of their way.”
The U.S. Attorney’s Office for the Eastern District of Arkansas doesn’t comment on investigations or acknowledge if it’s leading one.
If you recall, Roach Manufacturing Corp. in Trumann sued Cooper back in May in Craighead County Circuit Court, accusing him of embezzling $4.5 million between 2007 and April 2018.
But since that filing, the conveyor system manufacturer has been poring over bank records and determined that Cooper’s alleged theft dates back to the 1990s.
Cooper, in his answer to the amended complaint, denied any theft or embezzlement, but he admitted that he “misappropriated monies from Roach.” He didn’t provide additional details on what he meant, and his attorney, Bill Stanley of Jonesboro, didn’t return a call. Cooper relied on his Fifth Amendment right against self-incrimination in his answer to the original complaint.
The day after Christmas, Roach filed the amended complaint through its attorney, David Wilson of Friday Eldredge & Clark of Little Rock. The new filing lists more details about the alleged crime and added Cooper’s wife, LaNita Cooper, as a defendant.
Ed Cooper said in his answer that she had “no knowledge, input, consent, participation or any other type involvement in this matter.”
Roach Manufacturing disagrees.
More Details
Roach’s amended complaint provides some insight as to where the alleged stolen money went.
“The Coopers lived a lifestyle of spending more than 10 times their earnings, year after year, for the past 20 years,” the lawsuit said.
Cooper began working for Osborn & Osborn CPAs PLLC of Jonesboro in the 1980s, and one of its clients was Roach. In the 1990s, Cooper was handed the accounting services for the family-owned company.
“Given the liberal access to all things financial at Roach enjoyed by Ed Cooper, the actual extent and duration of the fraud and theft is unknown at this time,” the lawsuit said.
Cooper allegedly used extra checks from the family-owned company to embezzle the money. Between March 1996 and April 16, 2018, 135 checks were made payable to “Ed Cooper” on Roach’s account, totaling $8.9 million, the lawsuit said. Those checks were signed “with various forged signatures of officers of Roach,” the suit said.
As an example, in 2013, the Coopers’ net take-home pay was less than $40,000, yet the couple deposited more than $900,000 in their joint checking account that year, the lawsuit said. They withdrew more than $40,000 in cash from the ATM from that account, paid more than $250,000 on their credit cards and gave $30,000 to one of their sons.
The couple also paid a construction company more than $250,000 to work on their “river cabin” property in Fulton County. They bought 0.43 acres on the Spring River in 2000 and built two homes on the property. One built in 2006 is about 2,800 SF, and the other, built in 2014, is 3,250 SF. The lawsuit alleged the couple spent more than $2 million at the location.
They also regularly traveled and spent money on jewelry and furs.
“They exercised no restraint over a period exceeding 20 years living and spending like millionaires, using the money stolen from Roach,” the lawsuit said.
Roach wants a “complete accounting of every dollar of the” $8.9 million that Cooper allegedly took from Roach. The company also is seeking a judgment of at least $8.9 million against the Coopers and an unspecified amount for punitive damages.
Ed Cooper asked that the case be dismissed. When Roach filed its lawsuit in May, Osborn & Osborn, the accounting firm where Cooper worked, was named as a defendant. The complaint alleges breach of fiduciary duties and negligent supervision of Cooper.
Osborn and Roach reached a confidential settlement, and Osborn was dismissed from the case earlier this month.
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