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25 Outlaws scoundrels posers.

- Free Online Library

ARKANSAS BUSINESS HAS COVERED its share of characters during the
past 25 years. Some were outright criminals, while others pushed the
boundaries but were never convicted of stepping over the line.
Here's a roster of memorable names that drew our attention, in
something approaching chronological order
1 Paul L. Simmons
Paul L. Simmons came to Arkansas in 1984 with grand plans for
BioPlex International, the state's first high-tech industrial park
in Maumelle. Simmons touted himself as a nationally known consultant to
major pharmaceutical and biotechnology firms.
However, a closer look at his resume and name-dropping claims
revealed a checkered past seasoned with a heavy dose of overstatements
and outright lies.
Arkansas Business exposed Simmons in coverage that horrified
"pro-business" types at the time, but who were later relieved
his dealings didn't prove more embarrassing and costly to the
Among the phantom achievements listed among his inflated
professional credentials were not one but two bogus engineering degrees.
Though long overdue, we hereby award Simmons an honorary BS.
2 Hugh O'Neal
Arkansas Business followed its reporting on Paul Simmons with
not-so-charitable coverage of Hugh O'Neal and his Sequoia

Foundation, leading some readers to wonder if our upstart publication

was on a mission to run opportunity out of town.
O'Neal was selling his "non-profit" foundation as an
international clearinghouse for research data and for biological studies
aimed at conquering the aging process.
Yeah, we're talking high-tech fountain-of-youth stuff, a $15
million complex overlooking Lake Maumelle that included an executive
health spa. Gaping holes in his story and plans couldn't be filled
with good answers.
In 1987, O'Neal didn't have any good answers for a
Pulaski County jury that sentenced him to 10 years in prison for
swindling investors of more than $150,000 in connection with suspect oil
and gas leases in Ohio.
Coverage of O'Neal and Simmons established AB's
reputation for exploring beyond the surface and not shying away from
3 David Kane
The business affairs of David Kane were already in turmoil when
Arkansas Business hit the scene, what with bankruptcy filings for
himself and about a dozen firms he led in July 1982. His courtroom drama
continued through our early years and extended beyond bankruptcy court.
Old Worthen Banking hands remember Kane with disdain for filing a
shareholder lawsuit in 1985 alleging corporate negligence when the
Little Rock bank began enduring losses from bad investments.
Kane even sued his lawyers in 1993, claiming he was promised 10
percent of the $2.3 million settlement with Worthen. One of his lawyers,

Ted Skokos, described the unsuccessful suit as a shakedown, noting that

it was filed six years after the settlement.
But our favorite is the 1985 U.S. Tax Court ruling that disallowed
$29 million in tax breaks in western Arkansas coal mining ventures
organized by Kane. The IRS said the operation, set up in 1976, was
designed solely to generate paper losses for investors in the 50 percent
federal income tax bracket.
4 Doug Brown
It was the nearest thing to a snake oil pitch we'd ever seen
when Doug Brown and his Superior Marketing Research Corp. medicine show
rolled into North Little Rock's Riverfront Hilton on Feb. 5, 1986.
Brown was hawking a self-cooling beverage can, a gas-filled
apparatus that instantly chills a drink by releasing carbon dioxide when
the top is popped. Shares in the penny-stock venture soared from $2.75
to more than $7 in the days following his dog and pony show.
Problem was the cool-can wasn't the next sliced bread, and
Brown's claims that firms like U.S. Steel, Alcoa and Pepsico loved
the innovative product were so much fizz.
Oh, the cool can worked. But the prototypes cost $100 to produce by
hand and $20 to refill. Corporate America had rejected the concept as
impractical as early as 1946, but Brown conveniently left that history
out of his presentation.
5 Ray McClain
Were not sure what it is about Arkansas, and the Ozarks in
particular, that has given rise to dreams of Disneyesque theme parks.
Ray McClain was one of the first dreamers.

McClain was attempting to raise $35 million for the purported

launch of his 650-acre White Winds project near Gateway (Benton County).
One of its five themed areas was the Wizard of Oz.
"White Winds will be a brand new world ... a pristine, magical
city 'way up high,' beyond all space and time ... It is not
without significance that L. Frank Baum's Oz is also the first two
letters of Ozark, an enchanted area rich in folktales, magic, and
It also is not without significance that Baum advised us to pay no
attention to that man behind the curtain and watch out for winged
monkeys. Arkansas Business busted out McClain on his unrealistic
financial statements and false claims of support from legitimate
consultants and more in our Aug. 4, 1986, issue that pondered:
"$400-million theme park for Ozarks? Not likely."
6 Collins Locke & Lasater
The Little Rock investment firm of Collins Locke & Lasater (aka
Cocaine Ludes & Ladies) was a poster child for the go-go '80s
in Arkansas.
The firm was blown apart during a four-year cocaine investigation
that produced jail sentences for its namesake partners: David Collins,
24 months; George "Butch" Locke, 15 months; and Dan Lasater,
30 months.
They were part of a line of about 25 people who were prosecuted in
connection with the firm, known as Lasater & Co. when indictments
began flowing in October 1986.
The high-profile case is as much remembered for speculation over

who didn't get named and who received immunity from prosecution as
those who did jail time.
Locke also was fighting allegations of bankruptcy fraud, and
Collins was getting sanctioned by securities regulators.
Lasater, who had bought out Collins and Locke, sold the firm a few
weeks ahead of the indictments for $15.5 million to William
"Billy" McCord and Richard Gene Smith. The venture was renamed
United Capital Corp.
7 Roxanne and David Hamilton
Young and smart, Roxanne and David Hamilton were cutting a swath
through the Little Rock investment community on their way to the top. He
made senior vice president at Dean Witter Reynolds in four years. She
was a vice president in charge of trading hundreds of millions of
dollars in securities at First Commercial Bank.
But the party was over in June 1986, when First Commercial Bank
stumbled across a problem with a client's account. That began the
unraveling of a complicated fraud scheme by the couple, who were using
bank assets for their own trading activities.
How complicated? First Commercial claimed a $4 million loss at the
time, but the Hamiltons' activities also generated lots of profit
for the bank along the way as well. A final reckoning was an
accountant's nightmare.
Roxanne Hamilton, 27 and destined to give birth to her first child
in prison, was sentenced to 50 months, and David Hamilton, 29, was
sentenced to 40 months for bank and wire fraud.
8 Lynn Lloyd

High-flying CPA Lynn Lloyd set a new Arkansas record for personal
bankruptcy when he listed debts of $24 million in his Chapter 11 filing
in November 1986. His money troubles were compounded when perjury and
bankruptcy fraud crept aboard, for which he was convicted in December
1990 and sentenced to 41 months in prison.
At the time of his financial crash, Lloyd was majority owner of
Little Rock's Savers Federal Savings & Loan when it became
insolvent. His Lynxx Banking Corp., which secured loans to Pine
Bluff's FirstSouth and was taken over by federal regulators, owned
the $80 million Farmers & Merchants Bank of Rogers and the $60
million First National Bank of Bentonville.
Lloyd's Lambda International owned Little Rock Air Center,
which was sold to Midcoast Aviation for $3.5 million. Lloyd Arms Inc.
and Iver Johnson Arms of Jacksonville were two other Lloyd investments
that were liquidated.
His storyline of lawyers, guns and money reminded us that life
really does imitate art.
9 Reed, Weichern and Cox
The wheels of criminal justice were put in motion when federal
regulators declared FirstSouth of Pine Bluff insolvent in December 1986.
The crash of the $1.68 billion-asset public company was the
nation's largest savings and loan failure to date.
The case against Roderick Reed, FirstSouth's president, was
the first to reach resolution when he pied guilty to bank fraud in
October 1989 and was sentenced to 30 months in prison.
Howard Weichern, FirstSouth's chief executive officer, was

convicted of one count of bank fraud and conspiracy in October 1990 and
sentenced to four years in prison.
Harley Cox, general counsel for FirstSouth and a board member, was
convicted on 15 counts of making false statements and taking other
action to conceal the true financial condition of the thrift from its
board and from regulators.
Cox was sentenced to four years in prison in August 1991 but
received a pardon in January 2001, part of the roster signed the day
before President Bill Clinton left office.
Much of the investigation centered on FirstSouth's Texas real
estate investments that were listed as loans.
10 Karl Bernhardt
Ford-New Holland Inc. landed a $1.2 million judgment against Karl
Bernhardt in January 1990, but tracking down the globe-trotting
Bernhardt and collecting the judgment was another matter.
Bernhardt turned Twin City Ford Tractor Inc., with lots in North
Little Rock and Alexander, into the largest dealership in North America
through creative use of price breaks from Ford. Example: Bid on state
contracts with volume discount prices, agree to buy back the equipment
at the original cost after one year and resell it at a higher but still
below-market price for good used equipment.
Ford decided Bernhardt was breaking the rules. Bernhardt responded
by abandoning the dealership in June 1987, taking $605,000 of his
"cash equity" when he returned to his native Germany. When
Ford finally tracked him down there to serve court papers, Bernhardt
relocated to Costa Rica.

11 W.A. "Tony" Rand "Tony"

Little Rock businessman W.A. Rand thought he had a happy-ending
script for building a lucrative regional move theater chain. However,
federal authorities rewrote Rand's story in March 1991 with a
26-count indictment on interstate transportation of money taken by
fraud, money laundering and bank fraud.

Uncovering false statements to lenders and

the tax man provided the
plot twist, with Rand receiving about $17
million in financing through a
pattern of deceit that dated back to 1987.
Rand was filing tax returns
showing no profit at the same time he was
telling creditors that his
business was very profitable indeed.
In February 1992, Rand was convicted and sentenced to seven years
in prison for his misdeeds. His holdings in Arkansas, Texas and
Tennessee were sold to pay taxes and creditors.
The tale began taking a felonious turn in December 1990 when Rand
was convicted and sentenced to three years of probation for passing bad
12 John McClellan
Mercy was mixed with less admirable qualities when John McClellan
was sentenced to four years of probation, 40 days of weekend detention
and a $10,000 fine for bank fraud on May 14, 1993.
The grandson of the late U.S. Sen. John L. McClellan received loads

of letters of support from family friends. The same couldn't be

said of well wishes from business associates and partners.
If the truth, the whole truth and nothing but the truth is supposed
to be an accurate depiction of reality, there were two realities
portrayed under oath in Little Rock District Court that day. Was
McClellan an angelic and sorrowful developer who made a mistake, or a
sociopath who slipped in and out of the truth as easily as drawing a
McClellan was indicted on 10 counts of defrauding Richardson
Savings & Loan of Dallas in connection with a $519,819 kickback
scheme on the construction of west Little Rock's Market Street
Plaza. He and his McClellan Development had been the subjects of an FBI
investigation since 1987.
13 Ronald Whitlow
The tiny town of Alicia made the map of global commerce when Ronald
Whitlow popped up on our radar screen in July 1993.
Whitlow claimed the Lawrence County community as the home of his
one-man headquarters for CrossParex International, a private company

that seemed to come out of nowhere with reported sales of $648 million
in 1992.
Except for his home office, CrossParex operations were said to be
based in Panama on 2,000 acres Whitlow owned and on which he harvested
cut flowers sold in Europe, Central America, South America, Mexico,

Canada and the United States.

There was a good reason no one had ever heard of CrossParex, too.
Whitlow's tale of being a flower plantation owner and greenery
exporter extraordinaire was so much barnyard fertilizer.
But it was a tale that for a couple years fooled Dun &
Bradstreet Information Services, which dutifully published information
on his phantom enterprise. His related would-be venture to set up
hundreds of retail outlets for his Panamanian flower farm withered and
14 John W. "Jay" DeHaven
If controversy were a drink, then Jay DeHaven qualifies as a straw
that stirred it during Arkansas Business' 25 years.
And controversy was never swirling more for DeHaven than when he
was hit in August 1993 with a 32-count indictment in connection with
Maumelle's Dogwood development.
But a year later, DeHaven emerged from Little Rock's U.S.
District Court a free man, acquitted of all charges of alleged
conspiracy, bank fraud and illegal monetary transactions.
No stranger to legal action, DeHaven hasn't kept count of the
times his business adventures have taken him to the edge while battling
with lenders, buyers, bond trustees, partners, bank regulators and
Much of that courtroom drama revolved around 3,250 acres in
Maumelle that he and partner Michael Todd bought in 1988 for $11..I
million. Residential lots were sold like hot stocks, and the Maumelle

Co. office at times resembled a frenzied trading floor.

15 L.J. Davis
You can't let the facts get in the way of a good story, and
freelance writer L.J. Davis had a whopper of a story to tell. Davis
delved into the world of Arkansas' political and business elite and
penned "The Poisoned Rose," published in April 1994 by The New
Some found the factually challenged piece, which played off real
and imagined connections to Little Rock's Rose Law Firm, an
entertaining read. Unfortunately, some took it as legitimate reporting,
which it wasn't. One Arkansas scribe noted his work "might be
the single most inaccurate piece of reporting to be published in a
serious journal in a generation."
Davis claimed someone conked him on the noggin while lie was
staying in Little Rock's Legacy Hotel and implied the unknown
assailant made his move because he was getting too close to the truth.
It was later reported that Davis had knocked back way too many
Valentine's Day martinis, offering an alternative explanation for
the knot on his head.
16 Nick Wilson
The transition from the most powerful state senator in Arkansas to
federal inmate in Florida began with questions about awarding state
contracts without competitive bids. Along the way, there were
allegations of kickbacks portrayed as real estate finder's
fees--illegal commissions, as it were, since Nick Wilson didn't
have a real estate license.

When investigators finished, Wilson was at the center of a

133-count federal grand jury racketeering indictment in April 1999. The
Pocahontas legislator resigned from office five months later and
received a 70-month sentence for racketeering that overlapped with an
earlier 18-month sentence for tax transgressions.
Wilson abandoned efforts to reduce his sentence when prosecutors
revealed that he attempted to hide assets and was not truthful.
Joining Wilson in defrauding the state was Mike Todd, Paragould
lawyer and former state senator. Todd was sentenced in 2000 to 46 months
in prison on two counts of mail fraud and two counts of money laundering
and disbarred.
17 Newton Don Jenkins Sr.
Newton Don Jenkins Sr. of Jonesboro was a fraud conviction waiting
to happen when we first reported on his questionable business activities
in April 1988.
Eleven years later, a jury made it official by convicting Jenkins
of one count of fraud and 25 counts of making false statements to a
lending institution. It took the jury less than an hour to return the
verdict. Jenkins chose not to testify.
These days, Jenkins is back in federal court after choosing not to
respond to an Internal Revenue Service summons. The IRS is investigating
him for the tax years 2005 forward.
Jenkins came to our attention way back when investors across
Arkansas began accusing him of defrauding them of hundreds of thousands
of dollars in elaborate investment schemes. Those civil lawsuits by
angry investors drew the attention of criminal investigators, which

culminated in Jenkins receiving a 27-month prison sentence following his

August 1999 conviction.
18 Mike McNew and Joe O'Banion
Allegations that Funding Support Services Inc. and Southwest
Financial Inc. bilked investors of $12 million resulted in a 75-count
indictment against Joe O'Banion in February 2001.
The Maumelle businessman was charged with wire fraud, bank fraud,
mail fraud, conspiracy and making a false statement. O'Banion was
sentenced to 15 months in prison in October 2002 after pleading guilty
to one count of failing to notify authorities after learning of illegal
Prosecutors backed off on the charges against O'Banion,
convinced that his partner, Mike McNew, was the driving force behind the
scheme. McNew pleaded guilty to conspiracy and eight counts of fraud in
December 2000, which led to a 20-month prison sentence.
The Arkansas Supreme Court in 2002 reversed a $50 million ruling
that P.O. Marketing Inc., another O'Banion enterprise, landed
against Wal-Mart Stores Inc.
The duo's criminal activity involved fabricating and selling
bogus invoices to investors in the factoring business they operated
during 1992-99.
19 George Hardy
George Hardy traveled a memorable career path at the nation's
largest retailer. Hardy sailed from loss prevention division staffer at
Wal-Mart Stores Inc. in May 1992 to assistant director of the executive
security detail, the company's equivalent of the Secret Service.

Wal-Mart thought it had a former U.S. Navy SEAL helping manage

security for its top executives and members of the Walton family. And
who wouldn't want the lethal protection of a man who killed 16 men
when he was a SEAL, including the dispatch of one with a rolled-up
Unfortunately, Hardy never was a SEAL (although he may have stayed
at a Holiday Inn Express). In fact, he didn't even have a concealed
handgun permit--at least not in Arkansas.
Hardy didn't list having been a SEAL on his resume when he was
hired, but he boasted of his SEAL service during his employment. Hardy
had served in the Navy, and it was fellow sea-faring veterans who
torpedoed his phony SEAL claims in 2001.
20 H.G. "Jack" Frost
His legacy lived on after H.G. "Jack" Frost left his
namesake Little Rock accounting firm. His professional reputation was
hammered When the courtroom gavel fell on the 70-year-old businessman in
December 2001.
Frost was convicted of stealing more than $1.8 million during
1993-97 from Springdale's Harvey & Bernice Jones Charitable
Trust. He was paid $1.1 million for managing the trust finances during
that time.
Irregularities in his handling of the trust led to his dismissal
and a civil suit in March 1997 followed by a criminal indictment two
years later.
Frost was found guilty of one count of mail fraud, two counts of

wire fraud, 61 counts of money laundering, three counts of filing a

false tax return and one count each for making a false declaration
before a grand jury and obstructing a grand jury investigation.
Frost was a long-time friend of Jones Truck line founder Harvey
Jones, who died in 1989. He had served as a co-trustee of the
couple's namesake trust since its founding-in 1988.
21 Jim Bolt, Melvin Robinson, John Dodge & Juan Gomez
For varied investment opportunities backed by litigious zeal, it
would be tough to beat the team of Jim Bolt, Melvin Robinson and their
energetic lawyer, John Dodge.
They have sued the FBI, the Arkansas Securities Department, the
National Association of Securities Dealers--and Arkansas Business
Publishing Group, after we put their business ventures under the
microscope in 2002.
Bolt, Robinson and Dodge drew the scrutiny of the FBI when they
attempted to line up investors in a company that claimed a breakthrough
in cancer treatment, but a Fayetteville jury acquitted them of
securities fraud in 2007.
The NASD said Bolt had "been convicted of a string of crimes
that evidence a fundamental dishonesty running back 30 years."
Robinson, also a convicted fraudster, served federal prison time with
Bolt during the 1990s.
And Juan Gomez? Arkansas Business Publishing Group sued him, along
with Bolt and Dodge, for infringing on our trademark by incorporating
something called Arkansas Business Publishing Group Inc., but we

honestly don't know whether he ever existed.

22 Keith Moser
Somewhere between Little Rock and Detroit, Keith Moser took a wrong
turn at Albuquerque and ended up in Madagascar. In February 2004, the
Little Rock tax lawyer was scheduled to plead guilty in federal court in
Michigan to tax evasion, money laundering and obstruction of justice.
Instead, Moser fled to the African island nation famed for its
lemurs, where he was captured a month later. His flight only served to
delay judgment and add to his charges.
Moser was sentenced to 188 months in prison on May 6, 2005, after
pleading guilty to 13 felony counts. He also was ordered to pay $2.25
million in restitution to make amends for his fraudulent schemes during
1996-2004. His crimes included tax evasion, attempted extortion and
stealing money from client trust accounts to help support a lavish
lifestyle that included gambling, a new house and a pretty, young wife.
His misdeeds brought unwelcomed attention for his former law
partner, Barry Jewell, who was convicted of tax evasion in September
23 Nelson Miller
Known for his late-night TV ads, Nelson Miller and his Freedom
Financial built up a profitable book of business offering to help good
people with bad credit get loans.
Nelson and his Little Rock financing firm became a candidate for
Court TV in December 2004 when a grand jury indicted him and three of
his minions each on one count of conspiracy to make false statements to
a financial institution and 15 counts of wire fraud. In a plot that

foreshadowed the mortgage meltdown of 2008, they airbrushed loan

applications to make borrowers appear more creditworthy than they really
Miller's first go-round in federal court ended in a mistrial,
but he was convicted at his second trial and sentenced last August to
one year in prison, a punishment prosecutors have appealed as too
Along the way, seven employees pleaded guilty, and an eighth was
convicted in a separate trial.
24 Sweet Goods Guys
Three California bakery executives were embraced in 2001 as white
knights to rescue the failing Koehler Bakery in Sherwood. But Robert
Statman, Joel Rund and Gary Kleinman of Sweet Goods Inc. were nothing
more than rogues intent on spoil.
The trio obtained a $1.7 million loan from the Arkansas Development
Finance Authority to help save Koehler. instead of buying new equipment
to turn the business around, they doled out the money to family members
and associates and paid personal expenses.
The three were indicted in March 2005 on charges of conspiracy,
wire fraud and money laundering. Robert Statman, 69, was sentenced to 33
months in prison last month for defrauding the ADFA. Kleinman, 55, was
given three years' probation in recognition for helping
prosecutors. Rund's sentencing was still pending, after the
75-year-old couldn't make a hearing for "medical
After looting Koehler Bakery, Statman visited Iowa where he

allegedly left two sacked and pillaged bakery projects in his wake.
25 Frank Whitbeck Jr.
Financial cracks began showing in Frank Whitbeck Jr.'s world
in 2002 when we noted a growing line of disgruntled creditors, from
bankers holding past-due loans totaling tens of thousands of dollars to
retailers owed a few hundred dollars.
The money woes escalated to seven digits in September 2003 when
Metropolitan National Bank of Little Rock filed a $4.5 million
foreclosure suit against the Little Rock businessman and his Winrock
Grass Farm.
Events turned toward the criminal after the state Insurance
Department seized Whitbeck's Signature Life Insurance Co. of
America. Ensuing actions revealed that he managed Signature Life to the
point of insolvency through a bookkeeping charade of unsecured IOUs
masquerading as real estate loans.
Whitbeck began serving a six-year sentence in December after
pleading guilty to one count of mail fraud. The sale of his country club
home helped bring him current on his delinquent $3.7 million settlement
with insurance regulators.