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Sins of Commission And Omission (Gwen Moritz Editor’s Note)

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Dennis Smiley Jr. has “accepted responsibility,” as the federal prosecutors say, for defrauding 23 lenders who made 55 loans totaling $6.3 million, of which $5.3 million was still outstanding when he started missing payments in the spring of 2014.

Waiving his right to be indicted by a federal grand jury and pleading guilty has made Smiley’s prosecution faster and cheaper for all concerned, but it also means that there are a lot of things we’ll probably never know about his crimes.

For instance, we don’t know exactly when he started this cycle of borrowing; the earliest loan we know of was made by the Bank of Fayetteville in 2007. And we may never know exactly what he did with all that money; all his plea agreement says is that he was “living beyond his means for at least 10 years.” Living beyond one’s means is common; living beyond one’s means to the tune of a half-million dollars a year or more for a decade is not.

The public record on Dennis Smiley was thin to begin with, which puts Smiley’s crimes in the same embarrassing category as those of Kevin Lewis, the former Little Rock lawyer now in federal prison for peddling phony improvement district bonds to multiple banks as investments and collateral. Smiley and Lewis both counted on the laziness of lenders, and it worked flawlessly for years.

Of the 20 lenders who accepted Dennis Smiley’s retirement fund as security, only nine filed Uniform Commercial Code claims on the collateral with the Secretary of State’s Office. But even the ones who filed UCCs didn’t seem to notice all the other UCCs filed on the same collateral, a failure that one lawyer called both “crazy” and “reckless.”

I don’t think banks are so cavalier with all loans. I suspect they trusted Smiley because he was part of the club, one of the “good ol’ boys” you’ve heard about all your life.

Joe Edwards — who was CEO of Benefit Bank of Fort Smith until it was sold to Armstrong Bank of Muskogee, Oklahoma, in May — admitted as much when the scope of Smiley’s fraud became apparent early last year: “We all feel like we’ve all been held up and robbed by a friend. We also feel ashamed that we couldn’t figure it out.”


This isn’t business news, but it fits in with the theme of responsibility for actions and omissions.

In the past few months, we’ve learned that Josh Duggar, oldest of Jim Bob and Michelle’s 19 children, repeatedly molested his younger sisters (and another young girl) when he was a teenager, that he cheated on the devoted wife who bore him four children in seven short years and that he is now in some kind of long-term treatment.

Josh has confessed to being a hypocrite, a porn addict and an adulterer. He’s 27 now and plenty old enough to take responsibility for his actions. I doubt he’ll ever return to work for the Family Research Council, which clearly failed to research his family before he was hired.

I’ll be happy when all this is history — but I won’t be satisfied until Jim Bob and Michelle acknowledge their culpability in making their son an international laughingstock.

When the Duggars were just locally famous, I defended them against critics because there’s nothing more none-of-my-business than how many children someone else decides to have. When they decided to put their brood on TV, I thought it was risky because childhood celebrity often turns out badly. I don’t think I was alone in wondering when one of those kids was going to go rogue.

I didn’t turn on Jim Bob and Michelle until I learned that they decided to make TV stars out of their children after Josh had exhibited sexual compulsions. They knew this, and they knew that a number of other people (including a nonfamily victim) also knew it. And they still decided to put him and their victimized daughters on TV, and to hold themselves out as the ideal parents heading an ideal family.

I don’t blame Jim Bob and Michelle for Josh’s actions. I blame them for their own. Good parents sometimes have kids with serious problems, but good parents do not exploit their children — especially not children who are already damaged.

Josh Duggar was a sex offender before he was a TV star, and he might have become a porn addict and an unfaithful husband even if he had never become a celebrity. But we would never know any of it if his parents had protected their children instead of putting them in the public eye.

Gwen Moritz is editor of Arkansas Business. Email her at GMoritz@ABPG.com.
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