State Sen. Jake C. Files, R-Fort Smith, pleaded guilty Monday to three federal crimes: wire fraud and money laundering in connection with money routed to him from the state General Improvement Fund and an unrelated charge of bank fraud, U.S. Attorney Duane “Dak” Kees announced.
Gov. Asa Hutchinson tweeted that he expects to receive Files’ resignation from the state Senate within a few days. State Senate President Jonathan Dismang, R-Beebe, said Files was doing the right thing with his plea agreement.
“I understand the severity of Senator Files’ actions and that he has taken appropriate responsibility for those actions with today’s plea agreement,” Dismang said in a statement. I consider Jake a friend and I’ll be praying for him and his family. Regarding his resignation, it is my understanding that Senator Files will resign and I’ll be working with staff to make sure that the proper process is followed.”
Files, 45, waived his right to be indicted by a grand jury and instead pleaded guilty to the three-count information (PDF) filed directly by federal prosecutors in the Western District of Arkansas. Chief U.S. District Judge P.K. Holmes III accepted his plea at the federal court in Fort Smith.
Bank fraud carries a maximum sentence of 30 years, wire fraud 20 years and money laundering 10 years. His plea agreement (PDF) does not suggest what his sentence is likely to be, although his decision to waive indictment and plead guilty will work in his favor. The plea deal includes Files’ agreement to cooperate with investigators looking into his case or other criminal activity.
Between August and December 2016, according to Kees’ announcement, Files used his position as a state senator to obtain money from the GIF “through fraudulent means and for personal gain.” Abuse of the GIF has already resulted in a guilty plea by former state Rep. Micah Neal, R-Springdale, and a pending indictment against former state Sen. Jon Woods, R-Springdale.
“Specifically,” Kees’ press release said, “Files authorized and directed the Western Arkansas Economic Development District, which was responsible for administrating the GIF in Files’s legislative district, to award a total of $46,500 in GIF money to the City of Fort Smith. To secure the release of the GIF money, Files prepared and submitted three fraudulent bids to the Western Arkansas Economic Development District. Files then instructed an associate to open a bank account under her name to conceal his role as the ultimate beneficiary of the GIF award.
“When a first installment of approximately $26,900 was wire transferred from the City of Fort Smith to the associate’s bank account, the associate withdrew approximately $11,900 of the funds in a cashier’s check made payable to FFH Construction, Files’s construction company, and the rest in cash. The associate then hand-delivered the check and the cash to Files who, in turn, deposited the check into his personal bank account.”
Files also admitted that a loan application he submitted to First Western Bank in November 2016 was “materially false.”
This case was investigated by the FBI and prosecuted by Assistant U.S. Attorney Kyra Jenner from the Western District of Arkansas and by Victor R. Salgado of the U.S. Department of Justice’s Public Integrity Section. Files was represented by James B. Pierce, a federal public defender.