The City of Arkadelphia fell victim to a check washing fraud that cost taxpayers thousands of dollars
By JOEL PHELPS | arkadelphian.com
City Manager Gary Brinkley explained in a meeting Tuesday that a $17,000 check, written out to the Little Rock-based Clarity Pools LLC, was stolen from that company’s mail, then “washed” of the recipient’s name and cashed to the fraudster’s alias.
Check washing is a type of fraud that occurs when a stolen check is treated with a chemical formula to remove its ink, then rewritten — typically for a higher amount — addressed to a new payee and deposited. Brinkley said that, in this particular scheme, the amount was unaltered.
Brinkley later explained that the city was paying Clarity Pools for part of the pool refinish work at the Aquatic Park, which underwent repairs in 2022.
The fraudster(s) wouldn’t stop with the first check, however. Brinkley said the city had to shut down one bank account after it started getting “a bunch of false checks” this summer. The good news, Brinkley added, is that the bank was able to halt the additional attempts, so no other fraudulent checks became a financial loss to the city. Three other attempts were made totaling more than $19,000, according to City Treasurer Shacresha Wilson. The $17,000 check, however, was a loss as too much time had lapsed, after the discovery was made, to get reimbursed for the fraud.
City eats nearly 100% rate hike for property insurance
The city’s annual property insurance rate nearly doubled in cost.
Nathan Price, owner of the Arkadelphia-based Price & Company, informed directors that the city’s geographic location is “a serious issue” in the eyes of insurance carriers. Price added that hyperinflation on commercial insurance policies is an industry-wide issue, and rebuilding costs are surpassing the dollar amount carriers are collecting on premiums.
Also, the policy required rate increases to reflect replacement coverage on “several” of the city’s assets, Price added.
The city’s property insurance policy, paid annually to its carrier, EMC Insurance, was $85,000. The city received a sole bid of $164,161 on the updated policy. With little discussion, directors approved the spending of $165,000 to continue insuring its assets. Ward 1 Director Taylor Chaney inquired how many claims the city had filed in the single year; the answer was two, but Price explained that the city’s increase isn’t driven by its own claims but rather industry-wide claims.
Price predicted inflation to stabilize in the next couple of years.
Walnut Street drainage project gets nod
Directors authorized the city manager to spend $228,000 to improve drainage at the 1800 block of Walnut Street.
The plans are to install piping that will encapsulate rainwater and run it to a north-south creek located east of a pair of homes a previous city board bought. The second part of the plan is to build a flood control dam, Brinkley said, estimating the project to be finished in 120 days from its start date.
In other business, the board:
• Heard the second reading of an ordinance to rezone property at the North Ridge Estates subdivision into a residential zone. The measure heads to its third and final reading at the next city board meeting.
• Heard Brinkley say the Feaster Park restrooms are expected to be delivered Wednesday, Dec. 20.
• Was reminded that there will be no trash routes Monday or Tuesday, or on Jan. 1
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