After nearly four hours of deliberation Tuesday, a jury found former Arkansas Treasurer Martha Shoffner guilty of federal bribery and extortion charges for accepting $36,000 from a bond trader in return for steering state investment business his way.
Shoffner appeared to be weeping at the defense table as U.S. District Court Judge Leon Holmes read the jury’s verdict. She declined comment when she left the courtroom.
Chuck Banks, her attorney, told reporters later, “Obviously we’re disappointed, but you know it was a tough case, and the jury’s never wrong. They got it right.”
Patrick Harris, first assistant U.S. attorney with the eastern district of Arkansas, told reporters “it’s a sad day for Miss Shoffner.”
“Everybody here did a good job, the FBI, the U.S. attorney’s office,” Harris said, adding that the evidence against Shoffner was clear.
The judge said Shoffner could remain free until her sentencing hearing, but no date for that hearing was set. She faces up to 20 years in prison and a $250,000 fine for each conviction.
Tuesday was the fifth day of Shoffner’s public corruption trial. She was accused of six counts of extortion, one count of attempted extortion and seven counts of bribery.
Shoffner resigned May 21 after having been under investigation for more than a year because of suspected bond transactions in her office. Federal authorities took her into custody at her Newport home just after Stephens, who was wired and wearing a video recorder, delivered a $6,000 cash payment in a pie box, which also included an apple pie.
Jurors on Monday were shown an hour-long video of the May 18 meeting between Shoffner and Stephens. On the video, recorded from a hidden camera worn by Stephens, jurors saw Shoffner letting Stephens into her Newport home with the pie box. The video also showed Shoffner removing the money from the box.
In the video, Shoffner can be heard talking about the legislative audit meetings in September and December 2013, in which she was asked by state Sen. Jason Rapert, R-Conway, if she ever took any money from Stephens.
"I said no and I'll go to my grave with that," Shoffner said.
The jury retired to the jury room about 1:30 p.m. Tuesday after closing arguments and returned with a verdict almost four hours later.
During the closing arguments, Banks said there wasn’t enough evidence to convict his client and he questioned the credibility of the prosecution’s key witness, broker Steele Stephens.
“Do you think there would be some form of proof, some form of clear proof … of that man’s motive,” Banks told the jury, adding that Stephens at times was sympathetic with his client, despite the fact that he agreed to testify against Shoffner under immunity from prosecution by the government.
Banks, who addressed the jury for about 40 minutes, went on to say he was “not going to have to stand here and beg for a verdict, because I believe that Martha will be fine regardless.”
The defense attorney also argued that his client “made a mistake” by not reporting the payments in her annual financial reports, which are required under state law.
He said she knew taking the money was wrong and was concerned that if anyone found it she would be found guilty of violating state ethics laws and be removed from her elected office. He said Stephens also knew the payments violated the Financial Industrial Regulatory Authority, and he would have lost his broker’s license, known as a “series 7.”
Assistant U.S. Attorney Stephanie Mazzanti, whose closing arguments to the jury took more than an hour, said Shoffner both knew full what she was doing, she wanted the money and helped him increase his business with the state. She also protected him when others in the treasurer’s office suggested that he be dropped from the state’s broker list.
“Common sense tells you that Steele Stephens made the payments so his business would go up,” she said, adding that Shoffner “betrayed the trust of the people of Arkansas and by taking the money.”
Mazzanti told jurors that Banks’ argument that everything was fine because the deals Stephens made with the state funds actually made money was meaningless. She argued that the issue was that she took money from Stephens and helped him increase his business.
"She is guilty,” Mazzanti said. “She did this. She is guilty."
"The court asks you to use common sense. This is not a coincidence," Mazzanti said, referring to a large chart which tracked the payments Stephens made to Shoffner with the rise in business Stephens and the firm he worked for acquired.
She also said she had destroyed a disposable cell phone that Stephens had provided her after she became worried that her personal phone and possibly her office were being bugged by federal authorities.
Stephens testified Monday that he paid Shoffner $36,000 every six months for three years and that he made about $2.5 million in commissions on the sales over that period. He was working for Russell-based St. Bernard Financial Services at the time.
Stephens said he agreed to help Shoffner because she had recently lost her state vehicle, her apartment and her mother had just died.
Despite the verdict, Holmes must still rule on a motion made by Banks on Monday to grant an acquittal. After the prosecution had rested, Banks argued that the government had failed to prove several key elements of its case, including that the payments Shoffner received from Stephens had affected interstate commerce and that the bonds that Stephens brokered involved federal funds. The judge delayed making the ruling, saying he would only do so if Shoffner was found guilty. He said he would then ask both sides to file briefs on Banks’ argument.
Shoffner now faces a March 31 trial on 10 counts of mail fraud. She was indicted in February on mail fraud charges for allegedly using $9,800 from her re-election campaign for state treasurer for personal use. Shoffner allegedly mailed campaign checks as payments on a personal Wells Fargo credit card from Nov. 5, 2010, through Oct. 9, 2011.
Holmes said Tuesday that Banks had requested the trial be postponed because of a conflict and the judge indicated he would probably grant the attorney’s request.