The financial fraud case of two former SAYS (South Arkansas Youth Services) employees was continued for an additional two months on Thursday after the local court granted both sides, the state and the defendants, excess time for discovery – or evidence gathering – in the “complex” matter involving bank and charge account records, a Chapter 7 bankruptcy, and multiple concurrent investigations.
Standing together with their attorney, Aric S. Knight and Jennifer A. Knight appeared yesterday morning before Judge David Talley, where it was decided both defendants will not return to the courtroom until May 17. The husband and wife each pleaded not guilty last November to felony charges of theft of property by fraud over $25,000.
Aric was a former computer tech, maintenance person, and equipment purchaser for SAYS and Jennifer, also the daughter of former SAYS CEO Jerry Walsh, served as the non-profit youth organization’s Chief Financial Officer.
The accused individuals on Aug. 9, 2017, were arrested after Magnolia Police in June were alerted to possible financial fraud and property theft at SAYS. According to an MPD statement, detectives “found evidence of financial abuse as well as property missing from the youth agency” which later resulted in the arrests of the defendants.
“This case is being actively and diligently pursued,” said Deputy Prosecutor Ryan Phillips on Thursday.
The state and the Knights’ lawyer, John M. Pickett of Texarkana, are in the process of extensive evidence gathering. But since the case involves years of financial records, as well as details emerging in the wake of the Jan. 18, SAYS bankruptcy, more time is needed.
“There are a lot of different fronts, so to speak,” said Pickett.“We will continue to work with Mr. Phillips, as well as other parties, to go through this case.”
Phillips stated that, aside from evidence already gathered, American Express records have been subpoenaed as well as a newly found and relevant Amazon account, and more.
“There have been some additional things come to light in the recent bankruptcy case of SAYS,” said Phillips. “That’s the reason it’s taking awhile to get organized.”
Since the not guilty pleas were entered for the Knights, only in the event of future plea deal will the case not go to a jury trial. But since the case is still in the “early stages” of discovery, such a proceeding could still be far down the road.
Phillips claimed, at best, a two-month discovery period is needed before pre-trial motions could be filed, to which the court agreed.
The case is also complicated due to “other agencies” looking into the matter, as the state prosecutor put it Thursday.
According to its Chapter 7 bankruptcy filing, SAYS and its former CEO are under probes from the FBI and the Arkansas Attorney General’s office due to a wrongful termination suit filed against Walsh after the 2016 firing of former employee Mary Snider. Walsh, however, has not been charged with any crimes.
The SAYS bankruptcy also showed the youth agency, owed at least 81 creditors or debtors outstanding sums, including local businesses Bell & Boyd Law Firm, Farmers Bank & Trust, Magnolia Glass & Mirror, Magnolia Wastewater and Water Systems, Miller Pest Control, Peterson Heat/Air & Electrical, Scott Plumbing, South Arkansas Sales & Service, South Arkansas Youth Shelter, Warnock Furniture, Walker Water Association, and Wilson Bearden Pharmacy, and Wood & Wood Ltd. CPAs.
If the Knights do, for some unforeseen reason, appear in court before May 17, the public will be notified by way of a public court docket from the circuit judge’s office.