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Steele Stephens Could Still Face Fines over Shoffner Bribes

3 min read

Federal prosecutors gave Steele Stephens immunity from prosecution and let him keep the millions in bond sales commissions he received from the business relationship that resulted in the criminal conviction of former state Treasurer Martha Shoffner.

But the Arkansas Securities Department is not so forgiving.

A staff attorney there is pursuing an administrative case that could revoke Stephens’ registration as an agent and fine him up to $10,000 per violation for bribes paid to Shoffner and for other bad acts.

While Stephens is registered with the state, he cannot currently work as an agent because he is not registered with a firm.

Depending on the findings of the hearing officer, the total fine could be in the neighborhood of $150,000, staff attorney Scott Freydl told us.

The ASD complaint filed on Nov. 5 outlines six cash payments to Shoffner of $6,000 each, at least six unsuitable trades and multiple occasions in which he provided incorrect and misleading information to the treasurer’s office.

“In fact, in many instances, the bond trades offered by Stephens caused significant losses for the Arkansas treasurer’s office while greatly benefiting Stephens with excessive commissions,” the complaint says.

The administrative case follows failed settlement negotiations with Stephens’ attorney, Freydl said.

“From the staff’s perspective, we’d like to see this move along quite quickly,” he said.

No Reply

Stephens had not responded to the complaint as of last Thursday, and a hearing officer has not been appointed by Arkansas Securities Commissioner Heath Abshure.

Stephens’ attorney, Peter Kumpe, declined to comment.

Abshure said the department postponed filing a complaint against Stephens at the request of the FBI, which led the investigation of Shoffner. Abshure said he was working to find a qualified candidate to serve as the hearing officer.

The department’s complaint lays out the allegations against Stephens, most of which were made public in March during Shoffner’s trial on charges of bribery and extortion.

According to the complaint, Stephens began providing cash payments to Shoffner in exchange for directing more business to the firm that employed him, St. Bernard Financial Services Inc. of Russellville.

He bought or sold bonds for the treasurer’s office some 85 times between July 2009 and December 2012. Stephens estimated his commissions on the trades at $2.5 million.

The Financial Industry Regulatory Authority permanently barred Stephens from acting as a broker in November 2013 after he failed to respond to requests for information.

The organization opened the investigation in August of that year, two months after Shoffner was indicted.

Shoffner was convicted of 14 counts of bribery and extortion. She is scheduled for trial starting Feb. 2 on 10 counts of mail fraud related to alleged misuse of campaign funds.

More Stephens News

Steele Stephens also is the defendant in a $56,953 collection lawsuit filed by Centennial Bank of Conway.

The debt represents the outstanding balance owed on a 2012 loan of $150,000 that Stephens personally guaranteed.

The loan was made to Material Transport Solutions LLC, led by David Crews.

You might recall that Crews and his wife, Samantha, filed for Chapter 7 bankruptcy in July, listing $7.4 million in liabilities and $1.1 million in individual assets.

Centennial’s collection suit was filed in Pulaski County Circuit Court on Oct. 29.

From what we could find, Material Transport owned and operated one freight truck. The venture was tied to Crews when he lived in St. Johns, Florida.

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