Sharp-eyed lawyering resulted in a shorter prison term for the last of the defendants to be sentenced for stealing almost $4 million from First National Bank of Lawrence County, and it could bode well for her co-defendants.
Peggy Sutton, 61, received a 51-month sentence from U.S. District Judge Kristine Baker on Friday afternoon, six months shorter than the sentences Baker gave Brenda Montgomery on Thursday and Cindy Tate on Friday morning.
Sutton was the only one of the three who had promptly confessed to the 10-year conspiracy to steal cash from the bank vault, and she reportedly attempted suicide when the theft was discovered in April 2015. Her lawyer, Tim Dudley of Little Rock, was the first to contact federal prosecutors with an offer to plead guilty.
Unlike her co-conspirators, she sobbed as she addressed Baker and thanked the court for ordering mental health counseling that had helped her understand what she caused her "inexcusable" crime.
But her early acceptance of responsibility and cooperation with the investigation wasn't what persuaded Baker to give Sutton a shorter sentence. Instead, it was Dudley's questioning of a discrepancy between the calculation of the numeric offense level in the plea agreement hammered out in the spring and the calculation included in the pre-sentencing report by the federal probation officer.
The discrepancy had not been noted by Bill James, the Little Rock attorney who represented Montgomery, or by Tate's attorney, Jeff Rosenzweig of Little Rock. But Assistant U.S. Attorney Angela Jegley agreed with Dudley's interpretation, and Judge Baker said she would give "the benefit of the bargain" to the defendant.
Jegley told the court that she would contact the attorneys for Montgomery and Tate, and Dudley suggested that the first two defendants would likely be resentenced to 51 months because the negotiations with federal prosecutors always contemplated identical deals.
All three were sentenced to three years of supervised release following their prison sentences, and each had agreed to be responsible for repaying a third of the $3.95 million that was stolen — almost $1.32 million each.
Even the longer sentences imposed on Montgomery and Tate were a disappointment to the family that controls First National Bank. In the three separate sentencing hearings, Virginia Smith Fields used strong language to describe the women who victimized the small-town bank that her grandfather, father and brother worked to build and preserve.
Her brother, Milton Smith, has been CEO of the bank since their father died unexpectedly in 1994. Now 49, he said he had known the three defendants since he was a child; each had worked at the bank at least 30 years.
But the Smith family dropped its request that Baker reject the conditional plea agreement after she accepted it in Montgomery's case on Thursday. The 57-month sentences that Baker gave Montgomery and Tate were the high end of the range that was contemplated by the plea deal, but Dudley argued that the range should have been 41-51 months after his client was given maximum credit for accepting responsibility.
Jegley said the negotiation was the same for all three.
It's not clear what became of the money, which was stolen in cash from the bank's main vault, although Fields suggested to the judge that Sutton had gambled away her ill-gotten gains.
The theft has shaken Walnut Ridge, other employees told the judge when she asked for oral impact statements from victims. Tammy Franks, senior vice president and head cashier, said the bank's approximately 60 employees were "a family that has been devastated" by the crime perpetrated by three women who were part of that family-like organization.
Another SVP, Lorra Whitmire, said she had bought stock in the bank that had offered excellent salaries and benefits, especially to women. "The price we have paid for credibility in our small community cannot be measured," she said.
Whitmire also told Judge Baker that the forensic audit that identified the $4 million theft had also uncovered sexual misconduct by Tate that resulted in the resignation of another bank officer. He was not named in court, and Milton Smith declined to identify him.
Another bank employee, Vicki Boothe, complained to Baker that Sutton had bullied, belittled and embarrassed her from the day she was hired as a teller in 2001, and the fallout from the theft had left her emotionally and physically exhausted and caused her home life to suffer.
The bank recovered $2.7 million from a private insurance policy, but Milton Smith pointed out to the court that the financial damage was not limited to the money stolen. The bank is bearing the expense of parallel civil litigation, and the loss has reduced shareholder dividends and bonuses and raises for employees.
Montgomery's request to report to prison at the start of 2017, after the Christmas holidays, was denied, and she and Tate were both given 45 days to report. But Sutton asked to start her sentence as soon as possible, so she was ordered to report in 30 days if the federal Bureau of Prisons is ready for her that soon.