AP NEWS

Man accused in $9M embezzlement pleads guilty to bank fraud

January 8, 2020 GMT

LITTLE ROCK, Ark. (AP) — A retired Arkansas accountant has pleaded guilty to federal bank fraud just months after being hit with a $9.2 million civil judgment for embezzling funds from a manufacturing company over two years.

Edward M. Cooper Jr., 71, on Tuesday admitted to writing 138 unauthorized checks to himself on Roach Manufacturing Corp.’s account and forging the signatures of company officials on the checks and then depositing them into his bank account.

Cooper could face up to 30 years in prison and up to five years on supervised release, as well as a fine of up to $1 million, the Arkansas Democrat-Gazette reported. He was employed by Osborn & Osborn to perform accounting work for Roach.

Cooper told Chief U.S. District Judge D. Price Marshall that the withdrawals appeared on the company’s bank statements, but he provided summaries of the statements to the company, rather than the actual statements.

Bill Stanley, Cooper’s attorney, noted that all the statements were mailed to the company and not to Cooper.

During the civil lawsuit Roach filed in 2018, Stanley told the judge: “We discovered that Roach had never, at any point, opened a bank statement. They just put them in a box.”

Roach hired a financial manager, Katelyn Furnish, in 2017, who uncovered the fraud scheme. Documents in the civil case show she discovered irregularities in the company’s bookkeeping and asked for bank statements, which Cooper never produced.

Furnish then reviewed online statements and discovered an April 2016 check payable to Cooper for $39,947, according to the lawsuit. It said the signatures of the company’s president and secretary/treasurer appeared to have been forged. They both acknowledged they hadn’t signed it.

An initial audit uncovered 70 checks payable to Cooper totaling more than $4.5 million. After receiving more financial records, the number of unauthorized checks increased to 138.

Assistant U.S. Attorney Jana Harris said the single count of bank fraud is based on a Dec. 12, 2017, check for $87,433.15.

Cooper and his now former wife, LaNita, used the stolen funds to maintain a lavish lifestyle that included regular travel, buying jewelry and furs, and spending more than $2 million to build a cabin, according to the lawsuit. In September, Circuit Judge John Fogelman of Marion signed off on the final civil judgment holding Cooper accountable for $9,009,879.34 plus 5% annual interest.