Thursday, July 12, 2018
FAYETTEVILLE -- A former Farmington district court clerk who stole more than more than $1 million from the city was sentenced to federal prison Wednesday and ordered to pay restitution.
James Lewis Story, 58, pleaded guilty in November to one count of theft concerning programs receiving federal money and one count of filing a false income tax return.
U.S. District Judge Timothy Brooks sentenced Story to three years and 10 months on the theft charge and three years on the income tax charge, to run concurrently. Brooks ordered Story to pay $1,283,966 restitution to the city and $371,956 to the Internal Revenue Service.
Story agreed to pay $39,000 immediately and 65 percent of his monthly pension in the future. That amount should be about $550 per month.
Brooks ordered Story not to incur any debt or open any bank account without permission.
Story was allowed to remain free on bond until he reports to prison Aug. 22.
Brooks followed federal sentencing guidelines but said he didn't feel they accurately reflect the seriousness of the damage Story has done to public trust in the city and judicial system.
Story used a pen, paper and account ledgers to steal rather than a gun but that shouldn't diminish the seriousness of the offenses, Brooks said.
"Don't mistake that for saying you're not a thief, because you are," Brooks said. "Sir, what you did was not a mistake. You, sir, made an intentional decision day after day, week after week."
Brooks said Story stole to support an extravagant lifestyle, not because he needed the money.
Story resigned Dec. 5, 2016. He had worked for the city since 1995.
City employees found discrepancies in money paid to the city but not deposited into the general fund. The information was given to the Washington County Prosecutor's Office, the FBI and Arkansas Legislative Audit.
Story was the sole person responsible for receiving and depositing city revenue, reconciling bank statements, and entering and editing information in the district court system, city officials said.
"The money never really came into the city's accounts," said Ernie Penn, mayor of Farmington. "It's basically money he should have collected for the city."
Penn said the city has taken steps to make sure it doesn't happen again.
"We put in safeguards based on Legislative Audit recommendations," Penn said.
Penn, Judge Graham Nations and the district court clerk now sign off on collections each month.
The missing money was from court fines, costs and fees, and city general fund revenue that wasn't deposited between 2009 and December 2016, state auditors said. Farmington, a city of about 6,800, was audited by Arkansas Legislative Audit until 2007. Then the city was audited by a private accounting firm from 2007-15 and received a "clean" opinion from the firm, city officials said.
The accounting firm issued a report in February disclosing about $34,000 to $70,000 in cash wasn't deposited in the general fund bank account between December 2010 and November 2016.
Legislative auditors found payments made by some defendants weren't entered into the court system when they were collected and not reconciled to city deposits. Instead, defendants were issued handwritten receipts and the payments were given to Story for entry into the system and deposit into the city's bank account.
That gave Story the chance to keep the cash and create adjustments to reduce the balance due from the defendants, auditors said.
Story used more than 14,000 unauthorized adjustments to fabricate reasons that fines, costs and fees weren't entered into the system and weren't deposited, auditors said.
NW News on 07/12/2018
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