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justice 4jLittle Rock, Ark. — John B. Stacks, owner of Mountain Pure Water, was found guilty on Thursday, Oct. 9, 2014, by a federal jury on three counts of wire fraud, one count of submitting a false claim, and three counts of false statements.
Announcement of the verdict was made by Christopher R. Thyer, U.S. Attorney for the Eastern District of Arkansas, Christopher A. Henry, Special Agent in Charge of the IRS-Criminal Investigation, and Scott Dennis, Special Agent in Charge of the Small Business Administration (SBA) Office of Inspector General
The jury was unable to reach a unanimous verdict concerning the three counts of money laundering. The Honorable J. Leon Holmes presided over the seven-day trial and three days of jury deliberation in the U.S. District Court in Little Rock.
Stacks was originally indicted on Dec. 3, 2013, and charged with 3-counts of wire fraud, 3-counts of money laundering, 1-count of submitting a false claim to the Small Business Administration (SBA), and 4-counts of making a false statement.

John B. Stacks

John B. Stacks

According to evidence presented at trial, in 2009, Stacks obtained an SBA loan for $703,300 under false pretenses. Stacks claimed he had over $500,000 worth of Mountain Pure Water equipment at his farm in Damascus, Arkansas, that was destroyed when a tornado touched down in the area in May 2008. The wire fraud and money laundering charges stem from three transfers of money from the SBA in Kansas City, Mo., to Stacks’ General Account at Home Bank of Arkansas in Greenbrier, Ark. The false claim and statement charges are related to the Loan Authorization and Agreement and other related documents and statements Stacks submitted to the SBA to induce the SBA to make the loan.
“In times of recovery after the destruction caused by recent tornadoes, people have depended on the help provided through Small Business Administration loans to rebuild their businesses,” stated Thyer. “Unfortunately, there are some who lie, cheat and steal from, essentially, their neighbors to obtain funds that should go toward recouping legitimate business losses. I am grateful that this jury has weighed the evidence in this case and found Mr. Stacks guilty of wire fraud, submitting a false claim and making false statements. This verdict is the culmination of many hours of investigation by the IRS and SBA OIG. Their efforts have brought this injustice to light and have righted a wrong perpetrated on local business owners.”
“Today’s verdict is a direct result of the excellent partnership the IRS, the U.S. Attorney’s office and our law enforcement partners have in combating violations of Federal law,” said Christopher A. Henry, Special Agent in Charge, IRS-Criminal Investigation. “Stealing from the government is not a victimless crime; it is a crime against the American public. This verdict should serve as a deterrent to those who might contemplate similar fraudulent actions.”
“Today’s verdict sends a strong message that taxpayers have zero tolerance for fraud in disaster assistance programs,” said Special Agent-in-Charge Scott Dennis. “SBA disaster assistance loans are for persons and businesses that have suffered damage, not for persons seeking personal gain. I want to thank the U.S Attorney’s Office and our law enforcement partners for their dedication and hard work throughout this investigation.”
Sentencing will be scheduled by the Court at a later date. Stacks faces a statutory maximum penalty for Wire Fraud of not more than 20 years; a statutory penalty for False Claim of not more than 5 years; and a statutory penalty for false statement of not more than 5 years of imprisonment.
The case was investigated by IRS-Criminal Investigation and the SBA Office of Inspector General.
Assistant U.S. Attorney Angela Jegley and First Assistant U.S. Attorney Pat Harris prosecuted the case for the United States.

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