Three former employees of First National Bank of Lawrence County have pleaded guilty to a 10-year conspiracy to commit bank fraud and will share responsibility for nearly $4 million in restitution.
Brenda Montgomery and Cindy Tate, both 57 and of Walnut Ridge, pleaded guilty on Tuesday, and Peggy Sutton, 61, of Biggers, admitted guilt on Wednesday. They will be sentenced at a later date, and their plea agreements suggest a range of 41 to 57 months in federal prison. If U.S. District Judge Kristine Baker does not agree to the sentence range contemplated by the plea agreement, the defendants reserved the right to withdraw their pleas.
Arkansas Business reported in April that at least one of the three former employees was close to a plea deal.
Under a plea agreement with federal prosecutors, each waived her right to be indicted by a grand jury and agreed to be responsible for almost $1.32 million in restitution to the bank, for a total of $3.95 million.
According to a press release from U.S. Attorney Christopher Thyer's office in Little Rock, Montgomery, Sutton, and Tate were longtime employees of the bank who acted together to conceal the theft of money from the vault of the bank’s main office in Walnut Ridge.
Beginning in 2005, Tate, with advance notice of internal audits, would arrange with Montgomery or Sutton to transfer cash from other branches or banks into the main vault temporarily so the amount of cash on hand would appear to be correct. Once the auditors had completed the count, the defendants would make sure the cash was returned to the other locations.
Managers became suspicious in April 2015, the U.S. Attorney's Office said, and arranged for a surprise cash count of the vault contents. A forensic audit confirmed the theft.
First National revealed the theft in its second-quarter call report, filed in August 2015, but the names of the suspects had not been made known. In February, the bank's CEO, Milton Smith, confirmed that the bank had received an insurance settlement of almost $2.7 million.