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Gary Rickenbach Gets 2 Years of Probation, 100 Service Hours

3 min read

Gary Rickenbach’s emotional request was granted: The former One Bank & Trust executive was sentenced Wednesday to two years of probation and 100 hours of community service in exchange for pleading guilty to failing to report a crime.

The sentencing by U.S. District Judge Kristine Baker concluded the prosecution of bankers who worked for the late Layton “Scooter” Stuart, who was ultimately removed from the control of the Little Rock bank he owned before his death in March 2013.

Of four bankers charged in connection with a fraudulent $1.5 million loan, only Rickenbach was convicted. Charges against former CFO Tom Whitehead were dropped in exchange for his testimony against the other two, Mike Heald and Brad Paul, who were acquitted after a three-week trial in October.

Only the borrower, a Canadian resident of Florida named Alberto Solaroli, was sent to prison. He was sentenced to a year and a day after pleading guilty to a reduced charge of money laundering.

Wednesday’s sentencing hearing was perfunctory until Rickenbach, sniffling and pausing frequently, described to Baker a “very long and tough journey” since he “made what I thought was a well-secured loan” in 2007.

He said he had been embarrassed by the “abject failure” of a loan to someone he subsequently learned was “a con man,” and he took improper steps to try to mitigate that lending error. (He did not mention the fact that he had personally invested in Solaroli’s company before shepherding the loan through the bank.)

Rickenbach said he had “asked myself a hundred times” why he didn’t take the “easy and correct” course of simply writing off the loan. Instead, he and others at the bank refinanced the loan with new loans and collateral owned by Stuart, and the bank’s loss was limited. But Rickenbach looked the other way when Stuart submitted a call report to the Federal Deposit Insurance Corp. indicating that the loan was merely past due when the bank had already sought and received a court judgment for the amount in Florida. That was the crime to which he pleaded guilty, technically called misprision of a felony.

Rickenbach apologized to his former coworkers and to Dr. Jim Pappas and Paul Berry, the outside directors of the bank who were left to clean up the mess. He also apologized to his wife and two children. 

“Every time there was another article in the paper, my family paid for it,” he said.

The probationary sentence was what Rickenbach had hoped for when he offered in November 2015 to plead guilty to misprision, but Baker rejected that conditional plea. On Wednesday, she calculated the guideline sentence for his crime at between eight and 14 months in federal prison, and the federal prosecutor, First U.S. Assistant Attorney Patrick Harris, asked her to cut it in half in exchange for Rickenbach’s testimony against Heald and Paul.

Rickenbach’s defense attorney, Bill James of Little Rock, had filed a sentencing memorandum suggesting that probation — which the prosecution had agreed to in the original plea deal — was still appropriate, and Harris took no position on that request.

In granting the probationary sentence, Judge Baker pointed out that she had “sat through a lengthy trial” — that of Heald and Paul — since rejecting the original plea deal and now considered it to be an appropriate sentence in Rickenbach’s case.

Heald’s attorney, Gary Corum of Little Rock, filed a motion last week seeking to have the federal government pay his attorney’s fees on the grounds that the prosecution of Heald was frivolous.

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