The knottiest white-collar criminal case in recent memory should finally go to trial next month, but only half of the original defendants will face the jury.
“Unless they drop the charges,” defense attorney Lloyd W. “Tré” Kitchens III said last week.
And he said there’s no reason to think federal prosecutors are preparing to dismiss the charges against Michael Heald and Kitchens’ client Brad Paul, two of the four One Bank executives who were named in a March 2015 indictment.
After accepting co-defendant Gary Rickenbach’s second attempt to plead guilty to a reduced charge in July, U.S. District Judge Kristine Baker recently set an Oct. 11 trial date for Heald and Paul.
No date has been set for sentencing Rickenbach.
Rickenbach, for those needing a scorecard, was executive vice president and then senior executive vice president of One Bank when it was under the control of its owner, the late Layton “Scooter” Stuart. He facilitated a $1.5 million loan to a Canadian resident of Florida, Alberto Solaroli, in whose automotive technology company Rickenbach had invested.
Solaroli misrepresented his net worth to the tune of $170 million and never made a single payment on the 2007 loan, and for that he is currently a guest of the federal Bureau of Prisons. Rickenbach, Stuart and the others scrambled to fix the balance sheet through a series of replacement loans that were ultimately repaid, in the fall of 2012, through the sale of real estate that Stuart owned outright.
That happy ending notwithstanding, the cover-up of the Solaroli default — which Rickenbach said he orchestrated with Stuart’s cooperation — was happening in 2008 and 2009. And that coincided with a successful application for federal TARP capital for One Bank’s holding company, One Financial Corp.
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In April 2014, 13 months after Stuart died, Rickenbach was charged with two counts, conspiracy and money laundering, in a case that the special inspector general for the TARP program described as TARP fraud. Rickenbach was eventually charged with five more felonies, including bank fraud and aiding and abetting false entries. In November — eight months after Heald, Paul and Tom Whitehead were added to the indictment — Rickenbach offered to plead guilty to a single count of misprision (that is, failing to report a crime) if he could be guaranteed a probation-only sentence.
Baker finally rejected Rickenbach’s plea offer in July but accepted a plea agreement that suggests a prison sentence of 12-18 months under federal sentencing guidelines. (The judge can “depart” from the guideline range.)
At the U.S. attorney’s request, Baker dismissed the four counts against Whitehead in December. Whitehead’s attorney, Charles D. Matthews of Hot Springs, confirmed at the time that his client had agreed to testify against Heald and Paul, and federal prosecutors have revealed that they also expect to call Rickenbach as a witness.
Heald, who is represented by Gary Corum, will be tried on four charges, one each of conspiracy and money laundering and two of aiding and abetting false entries.
Paul faces the same charges, plus one more count of abetting a false entry. And his lawyer, Kitchens, points out that bank regulators — with full knowledge of the indictment — have allowed Paul to continue working in the industry as a commercial lender for Community First Bank of Harrison (which is being acquired by publicly traded Equity Bancshares Inc. of Wichita, Kansas).