Federal prosecutors say they have reached a deal with Dickson retirement plan manager Barry Stokes that would put him in prison for at least 14 years on charges of embezzlement.
Under the tentative deal, Stokes would plead guilty to embezzling more than
$16 million from more than 1,000 participants in retirement and other employee benefit accounts that he managed, including some investors who say they've lost their life savings.
"That is a huge sentence,'' said Nashville criminal defense lawyer David Raybin, who is not involved in the case. "These are the kinds of terms you see for big drug dealers and violent criminals. When you go over 10 years for a white-collar crime, you're talking about a significant conviction."
Stokes signed up clients such as Metro Nashville government, a local law firm and the state of Louisiana retirement fund, and even handled the retirement accounts for employees working for the Tennessee Democratic Party, to which he contributed nearly $50,000.
Over time, his business flourished, he became known for his technological savvy, and he amassed an impressive art collection of Japanese woodprints, some of which have been sold to pay creditors.
Metro Nashville moved its money out of Stokes' control when lawsuits began piling up against his firm, 1Point Solutions.
Stokes has been in jail since 2006, awaiting trial. After a series of delays, his trial had been set for Sept. 9.
Stacy Williams, an office manager for a law firm in Nashville who said she lost all of her retirement savings with Stokes, isn't happy with the proposed plea agreement.
"In my opinion, I don't think any plea agreement should be made until he tells where the money went and where it's hidden,'' she said.
Williams, who said she began saving for retirement in her 20s, is now 50 years old. "Now, I have nothing,'' she said.
Bobby Garfinkle, an attorney who works for the bankruptcy trustee handling Stokes' case, said the trustee has found no hidden money or offshore bank accounts.
Instead, Stokes appears to have spent much of the money, mostly on the outsized expenses of his business, which at one point had about 70 employees, Garfinkle said.
Stokes also had an extensive art collection of Japanese woodblock prints, which are in the process of being sold. Federal prosecutors have uncovered another 200 pieces of art belonging to Stokes in addition to the original collection, U.S. attorney Ed Yarbrough said.
He said he didn't know the value of the art. Garfinkle said the 200 art pieces uncovered by the FBI at his second home in Austin, Texas, also were Japanese woodblock prints. They will be sold in order to distribute the money to alleged victims, according to Yarbrough.
Deal must be reviewedUnder terms of the agreement, Stokes would plead guilty to 29 counts of embezzlement of retirement funds, in addition to several counts of wire fraud, mail fraud, money laundering and criminal contempt, according to a letter from the U.S. attorney to victims.
A federal judge must still review the deal, and alleged victims of Stokes' mishandling of funds will be asked what they think of the agreement at a town hall-style meeting later this week.
The U.S. attorney's office has invited victims to an 11 a.m. meeting Friday at the Nashville Public Library, 615 Church St.
They will be able to speak with prosecutors about the proposed sentence.
Stokes also would owe restitution of about $20 million, although the exact amount would be determined at sentencing. Although federal prosecutors say Stokes has agreed to at least 14 years in prison, they still may ask a judge for as much as 21 years behind bars.
Investors also may comment on the proposal on the U.S. Attorney's Web site at www.usdoj.gov/usao/tnm by sending an e-mail, and they will have a chance to give what is known as a victim impact statement to the court before sentencing.
Some victims wonder what will happen to Stokes, who has complained of ill health in recent months.
"I don't think that poor man will survive five years (in jail)," said Sonja Waters, an office manager in Seattle who said she lost $9,000 of her retirement funds with Stokes. "He's too delicate."
Waters said she remembers him visiting her office to encourage employees to contribute more of their paychecks to their retirement accounts, and that "he had terrible indigestion" and insisted he could eat only noodles in broth.
She also remembers that he was overweight and didn't want to walk anywhere.
"Being in jail for any length of time seems like it would be really hard for him,'' she said. "I just don't see him surviving."
Stokes filed a motion in court last month asking a judge to let him out of jail pending his trial, saying he probably has lymphoma, a type of cancer, and that his various medical problems are not being treated adequately at the Metro Criminal Justice Center. The judge has not made a decision on the motion.
His attorneys could not be reached for comment Tuesday.
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