Ex-official pleads guilty to charges

Story stole more than $1.5 million

FAYETTEVILLE — A former Farmington district court clerk pleaded guilty in federal court Monday to stealing more than $1.5 million from the city over several years.

James Lewis Story, 57, was set to be arraigned Monday in U. S. District Court on charges of theft concerning programs that receive federal money and filing a false income return. He waived arraignment and entered a guilty plea. Sentencing will come at a later time. Story is allowed to remain free on $5,000 bond while awaiting sentencing.

He faces a maximum of 10 years in prison and a fine of $250,000 on the theft charge and up to three years and a $100,000 fine on the tax charge. Story will be required to pay restitution as determined by the judge.

Story resigned Dec. 5, 2016. He had worked for the city since 1995.

City employees early this year found discrepancies in money that was paid to the city but not deposited into the general fund. The information was given to the Washington County Prosecuting Attorney’s Office, the FBI and Arkansas Legislative Audit.

Story was the sole person responsible for receiving and depositing city revenue, reconciling bank statements, and entering and editing information in the district court system, city officials said.

The missing money was from court fines, costs and fees, and city general fund revenue that wasn’t deposited between 2009 and December 2016, state auditors said. Farmington, a city of about 6,800, was audited by Arkansas Legislative Audit until 2007. Then the city was audited by a private accounting firm from 2007-15 and received a “clean” opinion from the firm, city officials said.

The accounting firm issued a report in February that disclosed about $34,000 to $70,000 in cash was not deposited in the general fund bank account between December 2010 and November 2016.

Legislative auditors reviewed court fines, costs and fees, and they found payments made by some defendants were not entered into the court system when they were collected and not reconciled to city deposits. Instead, defendants were issued handwritten receipts and the payments were given to Story for entry into the system and deposit into the city’s bank account.

That gave Story the chance to keep the cash and create adjustments to reduce the balance due from the defendants, auditors said.

In total, Story used more than 14,000 unauthorized adjustments to fabricate reasons, fines, costs and fees that weren’t entered into the system and were not deposited, auditors said.