May 18, 2016 Edition

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Three plead guilty
in FNB fraud case

Three former employees of First National Bank have pleaded guilty to felony conspiracy to commit bank fraud, according to U.S. Attorney Christopher R. Thyer.

Thyer, who serves as attorney for the Eastern District of Arkansas, and Special Agent in Charge Diane Upchurch, of the Little Rock Field Office for the Federal Bureau of Investigations (FBI) announced on May 11 that Brenda Montgomery, 57, of Walnut Ridge, Peggy Sutton, 61, of Biggers, and Cindy Tate, 57, of Walnut Ridge, admitted to stealing nearly $4 million from First National Bank.

According to a press release from the U.S. Attorney's Office, Montgomery and Tate pleaded guilty on Tuesday (May 10) and Sutton on Wednesday (May 11) before United States District Judge Kristine G. Baker, who will sentence them at a later date.

Judge Baker conditionally accepted each defendant's guilty plea, and each defendant is responsible for $1,317,000 in restitution to the bank.

The felony information charged that the three conspired with each other from 2005 through around April 2015 to fraudulently obtain approximately $3,953,025 from First National Bank.

According to the facts read at the hearings, Montgomery, Sutton and Tate were long-time employees of the bank who, using their positions, acted together to conceal the theft of money from the vault of the bank's main office in Walnut Ridge.

The press release stated that Tate had advance notice of internal audits and would arrange with Montgomery or Sutton to have cash transferred temporarily to the main vault from other branches of the bank, or from other corresponding banks, so that it would appear to the auditors that the count of cash on hand in the main vault was correct. Once the auditors had completed the count, Tate, Sutton or Montgomery saw to it that cash which had been temporarily moved to the vault was then returned to the other branches or to the corresponding bank.

In April 2015, officials in management at First National became suspicious of the defendants' conduct and arranged for a surprise cash count of the vault contents, at which time a shortage became apparent. A forensic audit confirmed that the three defendants had stolen bank funds by materially over representing the amount of cash on hand in the bank by $3,953,025.

According to Thyer, the statutory penalties for conspiracy to commit bank fraud include imprisonment of not more than 30 years, a $1,000,000 fine, five years supervised release and a $100 special assessment. The defendants have been allowed to remain free on bond pending sentencing.

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