Arkansas State Senator Guilty of Wire Fraud & Money Laundering

LITTLE ROCK (CN) — Arkansas state Senator Jake Files agreed Monday to plead guilty to fraud and money laundering, for using his office to steer $46,500 in state money to his personal bank account.

Files, 45, a two-term Republican from Fort Smith, told Gov. Asa Hutchinson he would submit a resignation letter this week. Files represents District No. 8 and chairs the state Senate Revenue and Taxation Committee.

U.S. District Judge P.K. Holmes III accepted Files’ guilty plea to wire fraud, money laundering and bank fraud on Monday. Files was released on a $5,000 bond.

In his agreement with prosecutors, Files admitted using his senate office between August and December 2016 to obtain government money through fraudulent means and for personal gain.

Files directed the Western Arkansas Economic Development District to award $46,500 in General Improvement Funds to Fort Smith.

Files, a real estate developer and owner of a general construction firm, then prepared and submitted three fraudulent bids to the development district, federal prosecutors said. He attempted to hide his identity as the beneficiary of the funds by instructing an associate to open a bank account using that person’s own name.

When the city deposited a first installment of $25,900, the associate withdrew $11,900 in a cashier’s check payable to Files’ construction company, and the rest in cash.

Files deposited the money into his personal bank account.

He also admitted submitting a false loan application in November 2016, in a scheme to collect $56,700 from First Western Bank.

Files announced in May last year that he would not seek re-election. In August, FBI agents searched his company, FFH Construction, and seized several hard drives and disks.

Gov. Hutchinson, also Republican, said in a statement that Files’ decision to resign was “the appropriate decision.”

“While I’ve known and respected the Files family for many years, it’s essential that voters are able to trust elected officials to have the public’s interest free from criminal conduct. Given today’s news it’s clear he will not be able to fulfill his obligations to his constituents,” Hutchinson said.

Files served four years in the Arkansas House of Representatives, from 1998 to 2002, before his election to the state Senate in 2010.

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