Ex-Sen. Hutchinson pleads guilty to tax fraud, felony bribery charges

FILE — Former Arkansas Sen. Jeremy Hutchinson, right, arrives at the federal courthouse in Little Rock with his attorney, Tim Dudley.
FILE — Former Arkansas Sen. Jeremy Hutchinson, right, arrives at the federal courthouse in Little Rock with his attorney, Tim Dudley.

Former state Sen. Jeremy Hutchinson pleaded guilty Tuesday in a Little Rock federal courtroom to felony bribery and tax fraud charges, and he agreed to plead guilty to a third charge in Missouri next month.

In the Eastern District of Arkansas, the 45-year-old former legislator admitted to filing a false income tax return in 2012 that underreported his income in the 2011 tax year. His plea agreement notes that he also made false statements on subsequent tax returns through 2014.

In the state's Western District, he admitted to conspiring from 2014-17 to commit bribery with the co-owner of orthodontic clinics in Arkansas to further legislation favorable to the businesses.

In the Western District of Missouri, he agreed to plead guilty July 8 to conspiring to defraud a federally funded charity.

Hutchinson faces up to five years in federal prison on each of the conspiracy charges, and up to three years on the tax charge -- for a maximum of 13 years -- in addition to fines of up to $350,000 in those two cases alone.

In return for his guilty pleas, once all are completed and accepted, 22 other charges pending against him in Little Rock and Missouri will be dropped. That includes eight counts of wire fraud and three additional counts of filing false tax returns in the Eastern District and three counts of federal funds theft, one count of bribery and seven counts of honest-services fraud in Missouri.

Hutchinson's plea hearing took place Tuesday before U.S. District Judge Kristine Baker in Little Rock, during a lunchtime gap in a civil jury trial.

Wearing a pink tie over a light blue shirt under his navy suit, the former lawmaker stood at a courtroom lectern with defense attorney Tim Dudley of Little Rock as Assistant U.S. Attorney Stephanie Mazzanti read aloud the details of the global plea agreement encompassing all three federal jurisdictions. It took Mazzanti about half an hour to read through the details behind the charges and various sentencing stipulations.

Hutchinson -- the son of former U.S. Rep. Tim Hutchinson, R-Ark., and a nephew of Gov. Asa Hutchinson -- answered Baker's questions while a team of federal prosecutors sat at a nearby table.

Sentencing won't occur until after the the U.S. Probation Office conducts a pre-sentence investigation, which is expected to take about three months. Prosecutors will use federal guidelines to recommend a sentence based on a point system that takes into account a variety of factors, such as the number of bribes involved and Jeremy Hutchinson being a public official at the time of the crime.

Federal prosecutors agreed to certain factors affecting the sentence range in each case, and Mazzanti told Baker that additional proposed stipulations may be submitted to the court for evaluation.

Prosecutors also reserve the right to seek consecutive sentences for each admitted crime.

Baker, however, isn't required to follow the guideline recommendations.

Mazzanti noted that if Hutchinson hadn't gone through with the plea agreement Tuesday, prosecutors would have been allowed to use the admissions made in the hearing against him in further proceedings.

Hutchinson was scheduled to be tried before a federal jury in Baker's court beginning July 8. A motion to dismiss the charges or suppress evidence was pending, but Baker said Tuesday that she won't rule on it because Tuesday's plea makes the issue moot.

Jeremy Hutchinson (left) leaves federal court in Little Rock on Tuesday after pleading guilty to two charges. With a related plea agreement in Missouri, the former state senator faces a possible 13-year sentence.
Jeremy Hutchinson (left) leaves federal court in Little Rock on Tuesday after pleading guilty to two charges. With a related plea agreement in Missouri, the former state senator faces a possible 13-year sentence.

In a statement Tuesday afternoon, the governor said he was "deeply saddened with this breach of the public trust" and called for a doubling of efforts "to do the right thing in public office and to restore the public trust."

"As my nephew, I hurt for him and his children. My prayers will continue for Jeremy, and I am hopeful this chapter of Arkansas political history will soon come to a close," the governor's statement added.

The tax charge that Jeremy Hutchinson pleaded guilty to in the Little Rock case pertains to his receipt of $20,000 a month from one law firm in 2011 -- presumably, from the law firm Keil & Goodson of Texarkana, according to testimony at the recent hearing on the dismissal motion.

While that would have required Hutchinson to report at least $260,000 in income for 2011, court documents say he told his accountant that his gross income for the year was $121,295.

The plea agreement notes that Hutchinson also received "other sources of income" in 2011, but doesn't identify them other than saying he took more than $10,000 worth of campaign funds for his personal use, which also should have been reported as income.

Mazzanti told the judge that the parties have agreed to litigate, at the not-yet-scheduled sentencing hearing, the amount of restitution that Hutchinson will be required to pay as a result of the 2012 income tax filing. She said prosecutors may also seek restitution in connection with the other counts that are expected to be dismissed once all three pleas are accepted.

As a state senator who was first elected in 2010 and who resigned after his Aug. 30 indictment by a Little Rock grand jury, Hutchinson represented Senate District 33, which includes portions of Pulaski and Saline counties. When he resigned, he had been chairman of the Senate Judiciary Committee for several years. He previously served as a state representative, from 2000-07.

The Western District bribery conspiracy charge to which Hutchinson pleaded guilty accuses him of accepting $157,500 from four businesses co-owned by "Individual A," a part-owner of orthodontic clinics in Arkansas, between February 2014 and November 2016.

Individual A sought Hutchinson's help in amending the Dental Practices Act, which generally prohibited any dentist licensed by the Arkansas State Board of Dental Examiners as a specialist, such as an orthodontist, from practicing outside that specialty, the charging document says.

It says the unnamed individual made payments to Hutchinson that were disguised as legal fees and retainers, but that at least partially constituted bribes for legislative actions he took to amend the law to suit the individual.

Hutchinson's plea agreement says Individual A agreed to a consent order with the licensing board in November 2013. It describes an acknowledgement in the consent order that matches an acknowledgment made in November 2013 by Benjamin Burris of Fort Smith.

Burris co-owned Braces by Burris clinics and had filed a federal lawsuit saying that the board's refusal to let him offer general teeth-cleaning services was unconstitutional. Burris dropped the suit in 2016 after giving up his orthodontist's license.

Attempts Tuesday to reach Burris, who has several listed numbers, were unsuccessful.

Hutchinson's plea agreement also describes how Individual A sent a text message to others on Feb. 11, 2014, bragging that "the chair of the Arkansas state legislature's budgetary commission just told us he will put a freeze on" the dental board's budget, then identified Hutchinson as the chairman. The agreement notes that Hutchinson, as a member of the Senate Joint Budget Committee, placed a hold on the board's budget appropriation on Feb. 11.

It also describes a text message that Individual A sent on Feb. 20, 2014, to someone identified only as Person C, stating, "The [board] has rolled over already and agreed with our guy that they need to rewrite the entire dental practice act. We own them. I'm kinda disappointed they quit so soon. Pansies."

The agreement mentions other exchanges between Individual A and Hutchinson in which they discussed Individual A's "legislative objectives." It cites a $20,000 check that Individual A wrote to the Hutchinson Law Firm on Feb. 28, 2014.

On Jan. 26, 2015, Hutchinson introduced Senate Bill 143, titled "An Act to Clarify the Laws Governing Dental Practice." On April 6, 2015, he filed the bill as an Interim Study Proposal. He spoke in support of the proposal on Sept. 25, 2015, and made a motion, which passed by voice vote, to refer the proposal to the Senate Committee on Public Health, Welfare and Labor.

Key dates in Hutchinson career and probe
Key dates in Hutchinson career and probe

The document states that Individual A began complaining to Hutchinson in April 2016 about "our arrangement," suggesting that Hutchinson wasn't doing enough to justify the pay he was receiving. It notes that in August 2016, "in an effort to conceal his role in the conspiracy," Hutchinson contacted the lobbyist supporting the interim proposal and said he no longer wanted to carry the legislation.

The orthodontist also expressed disappointment in Hutchinson's work on personal legal issues, saying in a November 2016 text: "I pay you a lot of money for 'full service'? Dude I don't think this is working out. You never get back to us you never follow through and I'm tired of it. ...

"You're a nice guy but dammit I get tired of chasing you. My wife is at her wits end. ... Get this done or we are done. Done as of October 31."

Mazzanti did not detail the conspiracy that Hutchinson has agreed to plead guilty to in Springfield, Mo. An indictment unsealed there in April accuses him, among other things, of taking bribes, including payments of $9,000 per month, from former executives of Preferred Family Healthcare Inc. to influence Arkansas laws and state agency rules.

Hutchinson was charged in that case alongside former Preferred Family executives Tom and Bontiea Goss, who have pleaded innocent. Christopher Plumlee, an attorney representing Tom Goss, said Tuesday in an email that "we have no additional comment at this time."

The global plea agreement prevents federal prosecutors in the three districts and at the U.S. Department of Justice from bringing any further charges against Hutchinson related to his "known criminal conduct."

Stark Ligon, executive director of the state committee that disciplines attorneys, sat in the back row of Baker's courtroom. Ligon said Tuesday afternoon that Hutchinson, through his attorney Dudley, has offered to surrender his law license.

Information for this article was contributed by Michael R. Wickline and Lisa Hammersly of the Arkansas Democrat-Gazette.

Metro on 06/26/2019

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