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Press Release

Fayetteville Man Sentenced To Over 3 Years In Federal Prison For Embezzlement Of Government Funds And Tax Fraud

For Immediate Release
U.S. Attorney's Office, Western District of Arkansas

Fayetteville, Arkansas –Duane (DAK) Kees, United States Attorney for the Western District of Arkansas, announced that James Lewis Story (Jimmy), age 57 of Fayetteville, Arkansas, was sentenced today to 46 months in federal prison followed by three years of supervised release, and ordered to pay $1,282,966.00 in restitution to the City of Farmington Arkansas and $371,956.00 in restitution to the IRS on one count of Theft Concerning Programs that Receive Federal Funds and one count of Filing a False Income Tax Return. The Honorable Timothy L. Brooks presided over the sentencing hearing in the United States District Court in Fayetteville.

According to court records, Story worked for the City of Farmington as the District Court Clerk from 1995 to 2016.  Starting in at least January 2009, Story was the sole employee responsible for preparing and making deposits, reviewing bank statements and performing reconciliations, entering receipt information in the District Court’s case management system(System), and posting transactions to the financial accounting system.  District Court offenders were required to pay their fines at the Farmington Court Clerk’s Office. Fines collected by City of Farmington staff were given to Story for data entry into the System and for deposit into the District Court bank account. Beginning in or about January 2009, Story made five types of fraudulent adjustments in the System to reduce the monetary balance due from defendants and conceal the funds not deposited.  As the only employee with authorized security access to the system, Story used the fraudulent adjustments to fabricate reasons that fines, costs, and fees collected were not entered into the System.  The fraudulent adjustments performed by Story included adjustments that indicated the District Court Judge dismissed the fines, fees, and costs owed by the offenders, adjustments that community service was served in lieu of payment of fines, fees, and costs, administrative activity adjustments, deleted or voided cases, and deletion of court automation fees.  During the course of the investigation, agents identified individuals who paid their fines in cash and whose records were changed in the System to indicate that there was no court-ordered fine.  In each case, Story altered the records, stole the cash, and used it for his own personal benefit.

Story was named in a two-count information and pleaded guilty in November 2017.

The investigation was conducted by the Federal Bureau of Investigation, IRS Criminal Investigations and the Arkansas Legislative Audit.  Assistant United States Attorney’s Brice R. White and Clay Fowlkes prosecuted the case for the United States.

Updated July 11, 2018

Public Corruption