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Steve Clary Sentenced to 30 Months in Federal Prison

3 min read

After delivering a long statement that even his prosecutor called “one of the gutsiest apologies I’ve heard,” bankrupt developer Roger S. “Steve” Clary of Little Rock was sentenced Wednesday afternoon to 30 months in federal prison to be followed by two years of supervised release.

Clary, 61, had pleaded guilty in February to a single count of mail fraud, admitting that he misused almost $1.6 million of a $4.5 million loan that he received from Bank of America Leasing Capital in 2008. He was ordered to pay that amount in restitution but was not otherwise fined by U.S. District Judge J. Leon Holmes.

He was originally ordered to report to prison on Jan. 6, but Holmes granted his request for a delay, until March 10, in order to complete some transactions in hopes of reducing the outstanding debt on his bankruptcy case, which he said had already been reduced from more than $168 million to less than $50 million.

Holmes imposed a prison sentence that was slightly below the lower end of the guideline sentencing range for Clary’s crime, which was 33-41 months. Afterward, Clary comforted approximately three dozen supporters who attended the hearing by telling them, “Don’t cry. This is what I expected. We’re OK. It’s better than I expected.”

Holmes said Clary’s story — of an upstanding member of society who, when facing a desperate need for money, accessed someone else’s money with the intention of paying it back later — is “not as unusual as you think.” The result was a “very large loss of money” for the victim lender that “does require jail time,” something that Clary and his federal public defender, Lisa Peters, had hoped to avoid.

“That’s probably one of the gutsiest apologies I’ve heard,” Assistant U.S. Attorney Angela Jegley said after Clary spoke. But she argued that being “talented and believable” is what gave someone like Clary the opportunity to commit a white-collar crime. A sentence that didn’t include prison time, she said, would send a “horrible” message that having those qualities is “a get-out-of-jail-free card.”

Holmes ultimately agreed, saying that Clary’s sentence needed to serve as a deterrent because “there are plenty of people out there who have access to other people’s money.”

Clary had originally been indicted on four additional counts of wire fraud in July 2010, but those counts were dismissed as part of his plea deal. Shortly after his indictment, he and his wife, Cindy, filed for bankruptcy, listing debts of $168.6 million against $1.4 million in assets. The bankruptcy case is still pending.

In a written statement that he read to the court, Clary apologized to the judge, to his family and friends and to Bank of America Capital Leasing. “Simply put, I betrayed their trust,” he said of the lenders at BOALC with whom he had had a long business relationship.

He also apologized to three organizations in which he had had leadership roles: Pleasant Valley Church of Christ, Harding University and Central Arkansas Christian Schools. “My actions,” he said, referring to the crime that he admitted, “could not be further from what these institutions stand for.”

Making no excuses for diverting money borrowed from BOALC in order to repay other debts, Clary said he “clearly knew better” than to misappropriate the bank loan.

He said the loss of his reputation had been particularly painful. “I”m not talking about social standing here, because that has never been particularly important to me,” he said.

He said he and his wife, who will celebrate their 40th wedding anniversary in December, felt a “moral obligation” to repay as much of their debts as possible, even if they are not legally obligated after the bankruptcy case is discharged.

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