Accountant accused of $4.5M theft

Posted: June 2, 2018 at 1:56 a.m.

A lawsuit filed this week claims a Jonesboro accountant, who worked for Roach Manufacturing Corp. and became a trusted financial adviser to the Trumann-based company, embezzled more than $4.5 million.

Roach, which makes heavy-duty conveyor systems, sued Edward M. Cooper Jr. and the accounting firm of Osborn & Osborn on Thursday in Craighead County Circuit Court, seeking, at a minimum, the return of the money.

The company, through its attorney, David D. Wilson of Little Rock, also won a temporary restraining order from Circuit Judge John Fogleman of Marion meant to protect the company.

Fogleman issued the order Thursday and set a hearing for 9:30 a.m. next Thursday in Jonesboro.

"This court agrees that given the significance of the allegations against Cooper and [Osborn & Osborn], as well as the risk of criminal exposure of Cooper if the allegations are proven, there is a likelihood that Cooper may immediately attempt to abscond with the converted funds of Roach and/or destroy or alter records that show where the Roach money was directed, where it is located, or may evidence other alleged embezzlement of Cooper which Roach has not yet discovered," Fogleman wrote. "This court find that if such actions were to occur, Roach would suffer irreparable harm."

Fogleman ordered that Cooper preserve all of his personal financial records, all financial records related to Roach and any and all computers and electronic storage devices, including smartphones to which he has access.

The judge also prohibited Cooper from withdrawing or transferring funds in excess of $150 daily from any and all bank, investment, retirement or other financial accounts in which he has any interest or "transferring, gifting, selling, hiding, relocating, changing ownership or otherwise disposing of any tangible or intangible asset, investment, real property, personal property, chattel or any interest of any kind.".

Fogleman also ordered Osborn & Osborn to preserve all its financial records related to Roach and any computers and electronic storage devices to which Cooper had access.

The lawsuit was filed the same day representatives of Roach confronted Cooper with the evidence of his role in the missing money.

Asked if Cooper offered to return the money, Wilson said in an interview, "He says it's been spent."

Wilson said company officials have contacted northeast Arkansas police and the FBI.

No one at Osborn & Osborn was willing to discuss the lawsuit, according to a woman who answered the telephone at the firm's offices Friday afternoon.

According to Katelyn Furnish, the financial manager for Roach, the company's loss could well exceed the $4.5 million documented.

Bank records so far only go back to 2007. Attached to an affidavit Furnish provided was a list of 70 checks from April 12, 2007, through April 16 of this year drawn on the Roach account at Simmons Bank payable to "Ed Cooper." The checks collectively total $4,539,080.36.

All appear to have been deposited into Cooper's personal account, also at Simmons, Furnish said in the affidavit.

Roach's relationship with Osborn & Osborn dates to the founding of the company by Furnish's grandfather, G.W. Roach Jr., in 1969. Cooper was hired in the late 1970s or early 1980s and eventually was given the "fiduciary relationship" with Roach.

"Cooper's trust and relationship with Roach even reached the level that he began providing tax and accounting services to the individual family shareholders of Roach over the years," according to Furnish.

At some point before 2007, Cooper began requesting "a few checks more than he actually needed to complete his duties," she said.

Given the trust Cooper enjoyed, employees never questioned the number of checks he requested, Furnish said.

Furnish was hired as financial manager in October to begin doing some of the day-to-day bookkeeping and accounting duties Cooper previously performed, according to the affidavit.

At that time, she asked Cooper to provide bank statements to allow her to reconcile the statements in-house. Cooper had been providing a summary of the bank statements in the monthly financial reports.

"Cooper was evasive in response to the request," she said. "He never delivered the requested statements, although he continually promised to do so."

Furnish said she began reviewing the monthly statements online from Simmons. She said that last month, while attempting to identify an imbalance, she noticed an April 16 check payable to Cooper for $39,947.59.

"It appeared to have been signed by Roach's secretary/treasurer and Roach's president; however, the signatures did not seem to quite match the signatures of those officers," she said.

The company secretary and treasurer is Furnish's mother, and the president is her uncle, according to the affidavit. Neither had signed the check, nor had they authorized anyone to "sign their names to a check made payable to Cooper in any amount," according to the affidavit.

Business on 06/02/2018