Ex-Arvest exec gets prison stint

Smiley sentenced to federal prison for bank fraud

Dennis Smiley Jr.
Dennis Smiley Jr.

FAYETTEVILLE -- Dennis Smiley Jr. began getting into financial trouble early in his marriage by running up credit card debt, he told a judge at his sentencing Thursday.

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His salary as a bank executive was never enough to pay what he owed, he said.

"I was taking loans to get by one day at a time," Smiley said. "There was always an unrealistic hope things would work out. The last few years, I knew there wasn't going to be a solution."

U.S. District Judge P.K. Holmes III sentenced Smiley, a former president of Arvest Bank of Benton County, to eight years in prison on a charge of federal bank fraud. He also ordered Smiley to pay more than $4.9 million in restitution.

Smiley, 52, of Rogers admitted to federal investigators that he had been living an extravagant lifestyle that was well beyond his means for at least a decade, leading him to borrow more than $4 million from 20 banks.

"When I look back at the harm I have caused to people, it's just unforgivable," Smiley told the judge Thursday. "What I did to them was truly wrong. I take full responsibility for what I did wrong."

Holmes called the amount of money Smiley took "staggering" and added that each of the 40 loans could have resulted in at least three felony charges. The scheme only stopped when Smiley got caught, and even then he tried to negotiate his way out of the situation at 30 cents on the dollar, Holmes said.

An FBI investigation showed that Smiley pledged proceeds from his Arvest stock, worth less than $500,000, to secure the loans.

Smiley pleaded guilty to one count of bank fraud in federal court in August. He agreed to pay restitution to all of the banks he borrowed from, and the government agreed not to pursue additional charges in the case as part of the plea deal.

Bank fraud carries a maximum penalty of 30 years in prison and a fine of up to $1 million.

Smiley's financial troubles started showing up publicly after he resigned from Arvest on March 13, 2014, about the same time the FBI began its investigation and several banks began filing civil lawsuits in circuit court claiming he had defaulted on loan payments.

Smiley also admitted that he forged his wife's and his father's signatures on loan documents, had subordinates and other Arvest executives sign documents falsely showing that the stock collateral was unencumbered and used false financial statements to secure loans.

Banks dismissed lawsuits against Smiley Sr. and Cynthia Smiley after they filed for Chapter 7 bankruptcy.

"I have let so many people down, my wife, my kids, my parents and my community," Smiley said before he was sentenced. "I hope to get back quickly and try to make it right."

Smiley said coming clean about his debt would have destroyed his career.

"As a successful banker, the worst thing you can do is to let people know you can't handle your own finances," he said.

In addition to more than eight years in federal prison and the restitution, Smiley will serve two years of supervised release after he gets out of prison. Holmes did not order Smiley to pay a fine or interest, saying it was more important that he pay the outstanding restitution, if possible.

Holmes agreed to allow Smiley to self-report to prison when a bed becomes available, sometime within the next 45 days. Smiley hugged family members and cried while leaving the courtroom after his sentencing.

Smiley was active in many community organizations, including stints as chairman of Northwest Arkansas Community College's foundation board in 2013 and the Jones Center board of directors in 2006. Smiley said he took no money from the nonprofit organizations.

Smiley started his Arvest career in 1989 as a commercial loan officer at McIlroy Bank in Fayetteville. He served as president of Arvest Bank of Springdale from 2001 until April 2012, when he was named to the top Benton County post.

Arvest settled its case against Smiley on Aug. 14 when Benton County Circuit Judge John Scott issued a judgment of $423,198 against HDS Holdings.

W.H. Taylor, Smiley's attorney, lobbied unsuccessfully for two years in prison for Smiley.

"Sometimes, really good people do really bad things," Taylor told the judge before the sentence was pronounced. "That's what we have here, a really good man who did some terrible things."

State Desk on 01/29/2016

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