A Springdale skin care company has accused its former general manager of taking advantage of its ailing founder and CEO by spending the company’s money on lavish trips and bonuses for herself without authorization.
Therapon Skin Health has sued Darla Smith, its general manager for seven years, for fraud and breach of contract for allegedly misappropriating at least $800,000.
Therapon’s CEO and founder, Dr. James Beckman, was diagnosed in 2021 with amnestic mild cognitive impairment, a condition that affects the memory, said the lawsuit, which was filed last month in Washington County Circuit Court. The lawsuit said Beckman is 81.
Smith “exploited this position of trust and the access she had to these accounts to misuse and to misappropriate Therapon’s funds for her own personal use and for the benefit of herself and others,” according to the lawsuit, filed by Katherine Campbell of Friday Eldredge & Clark’s Rogers office.
Therapon also accused Smith of forming a competing company called Simple Southern Skincare LLC in October 2022, when she still worked for Therapon. “Ms. Smith took this action while still employed with Therapon in preparation for competing with Therapon,” the lawsuit said.
She was placed on leave on Dec. 27, 2023, and told not to access Therapon’s systems or conduct any business for the company. She was fired on Jan. 3, and told to repay more than $443,000, which was the amount the company then believed had been misappropriated.
Smith’s attorney, Stevan Vowell of Taylor Law Partners of Fayetteville, told Arkansas Business that Smith denies all of the accusations in the lawsuit, “and they’re slanderous. We’re waiting for our day in court to show her innocence.”
Smith has not been charged with any crimes in connection with the allegations.
Vowell said that Smith started the new LLC because “at one point in time, she was negotiating to buy Therapon.” But the purchase fell through, he said. “So the LLC is just sitting there. It’s inactive. Nothing’s going on,” he said.
Therapon made the allegations against Smith because Beckman’s daughter allegedly wanted “to take over the company and run Darla out,” Vowell said.
Therapon declined to comment on the case because of the pending litigation.
Founding of Therapon
The beginnings of Therapon can be traced to 1977, when Beckman started his private practice in Mountain Home, specializing in plastic and reconstructive surgery, according to the company’s website.
“Therapon evolved as a name for some products that I developed for my patients in my practice that got fantastic results in restoring healthy skin,” Beckman said in a video posted on the company’s website.
Beckman received his medical degree from the University of Arkansas for Medical Sciences in 1970.
“We didn’t set out to build a skin care products company,” he said. “We decided we’re not going to add another item, another product to the line, unless there was a proven need.
“Every person should have the opportunity to look as refreshed, young, healthy as absolutely possible.”
Smith started working at the company in December 2005, according to her LinkedIn profile, but it didn’t say what her position was when she began. She said that her “ability to focus on overarching business strategy has led to increased topline revenue, stronger brand presence, and elevated customer satisfaction year after year.”
$800K Allegedly Taken
In late 2023, Therapon began noticing “irregularities” in the company’s books, according to the lawsuit. The company investigated and concluded that Smith had misappropriated hundreds of thousands of dollars since 2019, behavior that continued through December 2023.
The lawsuit, filed April 16, said the investigation is continuing, but so far from 2021 through December 2023, it alleges that Smith misappropriated at least $800,000.
The lawsuit said that Smith allegedly charged personal items to the company’s credit cards and issued checks to herself from the company’s account. Her alleged unauthorized charges included dental visits, gas, nail appointments, gifts to her son and flights, the lawsuit said.
In 2021, Smith also allegedly used the company credit cards for purchases at places such as Oaklawn Racing Casino Resort in Hot Springs and the Hard Rock Hotel & Casino in Tulsa.
“She also charged a vacation to Las Vegas, which included $1,642.27 for Miranda Lambert concert tickets and $1,664.74 in personal shopping at luxury fashion brand Michael Kors,” the lawsuit said. “All these purchases were charged to Therapon’s credit card.”
As general manager, she was able to cover up the unauthorized payments, the suit said.
The lawsuit also said that Smith hired her adult son, Eric Scism of Kentucky, in 2017. In 2020, he was moved from a consulting role with intermittent monthly pay of $2,000 to a part-time employee working remotely from Tennessee and Kentucky, the lawsuit said. In 2023, Scism had an annual salary of $60,000 and a bonus of $40,000, but he did “little or no work” for the company, the lawsuit said. The lawsuit alleged that since 2020, Smith had misappropriated about $260,000 in Therapon funds to give to Scism for salary and bonuses.
Scism also has been named as a defendant in the suit, and Therapon has alleged he was in a conspiracy to take the company’s money.
In a court filing, Scism asked that the case be dismissed. “A claim for civil conspiracy and conversion must fail as a matter of law when the Plaintiff relies merely upon conclusory statements,” according to the filing by one of Scism’s attorneys, Christopher Brown of Matthews Campbell Rhoads McClure of Rogers.
“Mr. Scism received his payment which was due and owing through the permission of Plaintiff’s management,” the filing said. Brown also noted in a footnote in Scism’s filing that he was never paid “anywhere close to” the $260,000 alleged.
Vowell, Smith’s attorney, said Scism was working for Therapon and received a fair wage for it. “You can’t believe everything they put in those complaints,” he said.
The case is pending in front of Circuit Court Judge Doug Martin.
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