Brandon Barber, 37, New York, and his four co-defendants, appeared in United States District Court for arraignment on various charges of bank fraud, bankruptcy fraud, wire fraud, and money laundering stemming from schemes to defraud involving several Northwest Arkansas real estate transactions and Barber’s bankruptcy case.
They appeared before United States Magistrate Judge Erin L. Setser in Fayetteville, Arkansas, and pleaded not guilty to all charges. Barber and co-defendants K. Vaughn Knight, 46, Fayetteville, Arkansas; James Van Doren, 37, New York; Jeff Whorton, 45, Johnson, Arkansas; and Brandon Rains, 32, Springdale, Arkansas, were indicted on January 16, 2013 and March 6, 2013, in two separate indictments. The defendants are scheduled for trial on June 17, 2013, before Chief United States District Judge P.K. Holmes, III.
The defendants have been released on bond pursuant to standard pre-trial conditions of release subject to a special condition prohibiting them from incurring any new financial debt. In addition, Barber is confined to home detention and subject to GPS monitoring.
The indictments allege several schemes to defraud banks, creditors, and the Federal Bankruptcy Court beginning in 2005 to 2009. Those schemes include:
(1) Barber provided false and fraudulent financial information and statements to Legacy National Bank of Springdale in connection with loans to finance the Legacy Condominium building and project in Fayetteville;
(2) Barber provided false and fraudulent financial information and statements to Metropolitan National Bank of Little Rock and Enterprise Bank, St. Louis, Missouri, in connection with loans to finance the Bellafont project in Fayetteville;
(3) Barber, Van Doren, and Knight concealed assets and income from creditors and the bankruptcy court by transferring Barber’s funds to Van Doren and Knight or accounts controlled by them and using those funds for Barber’s personal benefit and expenses; and
(4) Barber, Whorton, and Rains falsely and fraudulently represented purchase prices for real estate to First Federal Bank, Harrison, Arkansas, to obtain loan amounts exceeding the actual purchase prices and thereby generating excess cash without the Bank’s knowledge or approval.
Conner Eldridge, United States Attorney for the Western District of Arkansas, announced the charges.
This case is being investigated by the Internal Revenue Service-Criminal Investigation Division and the Federal Bureau of Investigation. United States Attorney Conner Eldridge, First Assistant United States Attorney Wendy Johnson, and Assistant United States Attorneys Glen Hines and Benjamin Wulff are prosecuting the case for the United States.
Unfortunately, these is much fraud out there and this seems to be a common way it is done: real estate financing and bankruptcy.