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September 25, 2017

John Stacks Sees Charges Dismissed


The five-year battle between the federal government and John Stacks of Damascus ended July 20 when the office of the U.S. Attorney for the Eastern District of Arkansas dismissed an indictment against the former owner of Mountain Pure LLC bottled water company.

The ordeal “cost me something greater than $10 million,” Stacks, 61, said last week. “That was my life earnings. … I’m like starting all over again.”

The day after the charges were dropped, Stacks took back his old job as CEO and chairman of the board of HomeBank of Arkansas. Stacks is the primary owner of the bank but stepped down from the positions after being hit with an 11-count indictment in December 2013 that accused him of crimes in connection with taking out a Small Business Administration loan after his property in Van Buren County was struck by a tornado in May 2008.

Stacks said that the case was dismissed after he agreed not to seek attorneys’ fees and costs from the government in connection with the defense of his case. Stacks said the prosecution’s offer was “we’ll go away and leave you alone if you won’t come after us.”

First Assistant U.S. Attorney Patrick Harris, who prosecuted the case along with Assistant U.S. Attorney Angela Jegley, told Arkansas Business in an email statement last week that the charges were dropped “because we made a decision not to retry the case.”

After a six-day jury trial in 2014, Stacks was convicted on seven of 11 felony counts. But the jury couldn’t decide on three of the counts, and one count had been dismissed by prosecutors before it reached the jury.

U.S. District Judge J. Leon Holmes didn’t agree with the jury and questioned whether there was sufficient evidence to convict Stacks. Holmes acquitted Stacks of two of the counts and ordered a new trial on the remaining five charges.

The prosecutors appealed to the 8th U.S. Circuit Court of Appeals. On May 9, the 8th Circuit upheld Holmes’ decision. “The court credited the evidence favoring the guilty verdicts, citing evidence from which a reasonable jury could convict Stacks,” according to the order by Appeals Court Judge Duane Benton. “The district court weighed it against the exculpatory evidence before concluding in a thorough, reasoned manner that a miscarriage of justice may occur if the verdicts were allowed to stand.”

Harris said that because of those court decisions and because a key witness had died, the government decided not to retry the case. “But we did not concede that the prosecution was wrongful,” he said.

Stacks’ problems started after he received the $526,100 SBA disaster loan.

The SBA, though, wanted more documentation from Stacks and in 2010 declared the loan to be in default because he didn’t provide enough information. Stacks maintained that he consistently made payments on the loans.

In January 2012, federal agents executed a search warrant at Mountain Pure’s plant.

Stacks maintained that he provided all the information required and more. He said he was innocent. He also accused the federal agents of stepping over the line when they raided his business in a SWAT-like manner. Stacks said he became a target of federal prosecutors after he criticized the tactics of the government in a documentary called “Rampant Injustice” that was released on Halloween 2012.

Harris denied that Stacks was charged because of the documentary. “He was charged because we had evidence that he had defrauded the United States,” Harris said.

Stacks said that as of a result of the charges, Mountain Pure went into receivership and was sold.

Stacks said all he wanted after the raid was an apology. “I know everybody can make mistakes,” he said. Instead, “the federal prosecutors … tried to make a case that was never there.”

The five-year battle between the federal government and John Stacks of Damascus ended July 20 when the office of the U.S. Attorney for the Eastern District of Arkansas dismissed an indictment against the former owner of Mountain Pure LLC bottled water company.

The ordeal “cost me something greater than $10 million,” Stacks, 61, said last week. “That was my life earnings. … I’m like starting all over again.”

The day after the charges were dropped, Stacks took back his old job as CEO and chairman of the board of HomeBank of Arkansas. Stacks is the primary owner of the bank but stepped down from the positions after being hit with an 11-count indictment in December 2013 that accused him of crimes in connection with taking out a Small Business Administration loan after his property in Van Buren County was struck by a tornado in May 2008.

Stacks said that the case was dismissed after he agreed not to seek attorneys’ fees and costs from the government in connection with the defense of his case. Stacks said the prosecution’s offer was “we’ll go away and leave you alone if you won’t come after us.”

First Assistant U.S. Attorney Patrick Harris, who prosecuted the case along with Assistant U.S. Attorney Angela Jegley, told Arkansas Business in an email statement last week that the charges were dropped “because we made a decision not to retry the case.”

After a six-day jury trial in 2014, Stacks was convicted on seven of 11 felony counts. But the jury couldn’t decide on three of the counts, and one count had been dismissed by prosecutors before it reached the jury.

U.S. District Judge J. Leon Holmes didn’t agree with the jury and questioned whether there was sufficient evidence to convict Stacks. Holmes acquitted Stacks of two of the counts and ordered a new trial on the remaining five charges.

The prosecutors appealed to the 8th U.S. Circuit Court of Appeals. On May 9, the 8th Circuit upheld Holmes’ decision. “The court credited the evidence favoring the guilty verdicts, citing evidence from which a reasonable jury could convict Stacks,” according to the order by Appeals Court Judge Duane Benton. “The district court weighed it against the exculpatory evidence before concluding in a thorough, reasoned manner that a miscarriage of justice may occur if the verdicts were allowed to stand.”

Harris said that because of those court decisions and because a key witness had died, the government decided not to retry the case. “But we did not concede that the prosecution was wrongful,” he said.

Stacks’ problems started after he received the $526,100 SBA disaster loan.

The SBA, though, wanted more documentation from Stacks and in 2010 declared the loan to be in default because he didn’t provide enough information. Stacks maintained that he consistently made payments on the loans.

In January 2012, federal agents executed a search warrant at Mountain Pure’s plant.

Stacks maintained that he provided all the information required and more. He said he was innocent. He also accused the federal agents of stepping over the line when they raided his business in a SWAT-like manner. Stacks said he became a target of federal prosecutors after he criticized the tactics of the government in a documentary called “Rampant Injustice” that was released on Halloween 2012.

Harris denied that Stacks was charged because of the documentary. “He was charged because we had evidence that he had defrauded the United States,” Harris said.

Stacks said that as of a result of the charges, Mountain Pure went into receivership and was sold.

Stacks said all he wanted after the raid was an apology. “I know everybody can make mistakes,” he said. Instead, “the federal prosecutors … tried to make a case that was never there.”

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