Opinion ID: 1664552
Heading Depth: 1
Heading Rank: 8

Heading: Deposit slip for $150,000 into account of NSLIC

Text: Mr. Niemann testified that Mr. Hale showed him the check from Ink Jet to Emanon on July 2, 1993, and told him that it should go to NSLIC as a capital contribution. When asked [w]hat did [Mr. Hale] tell you to do with it[,] Mr. Niemann stated: Well, it was obvious it was meant to go to Emanon Marketing to be eventually contributed to National Savings Life Insurance Company. He further confirmed that he deposited the check into Emanon's account so I could write [NSC] a check so they would in turn contribute the capital to [NSLIC]. He also testified that Mr. Hale told him about his plans for NSLIC to use the money to buy preferred stock in FSA. When Mr. Niemann expressed concern about FSA stock not being an admissible asset, Mr. Hale stated: Don't worry about it.... They have the financials to support it, and it will be an admissible asset. Following NSLIC's receipt of the $150,000 from NSC, Mr. Niemann, as president of NSLIC, signed and sent a letter to the Arkansas Insurance Department on July 6, 1993. That letter stated, in relevant part, as follows: Under date of March 17, 1993 we were advised that National Savings Life Insurance Company in accordance with Ark.Code. Annotated XX-XX-XXX(a) had a capital impairment in the amount of $38, 575. Subsequently, you allowed a 90 day extension for the Company to correct this deficiency. Enclosed you will find a receipted deposit slip in the amount of $150,000 to the savings account of the Company. This is a capital contribution from our parent, National Savings Corporation. Should you desire any additional information concerning this matter please so advise. Attached to the letter was a copy of the July 2, 1993 deposit ticket showing that $150,000 was deposited into NSLIC's account. Mr. Niemann testified that he wrote the July 6 letter to the Insurance Commissioner because the $150,000 capital contribution to NSLIC cured the earlier deficiency. With regard to Mr. Hale's involvement in writing the letter, he stated: I don't exactly recall whether I said, We need to write the letter, to David Hale, or whether David Hale said to me, We need to write the letter. We simply talked about the fact that the Insurance Commissioner had to be advised thator should be advised that our deficiency had been solved. Mr. Niemann also stated that he inferred from his July 2 meeting with Mr. Hale that he needed to write the letter. Mr. Hale acknowledged during his testimony that he was familiar with the letter to the Insurance Commissioner. It is this July 6, 1993 letter that forms the basis of the State's information charging Mr. Hale with making a false or misleading statement to the Arkansas Insurance Department in violation of Ark.Code Ann. § 23-60-109, in conjunction with Mr. Rutherford's testimony regarding (1) a conversation he had with Mr. Hale on July 2, 1993, and (2) Mr. Hale's subsequent return of the $150,000 to Mr. Rutherford on July 6, 1993. Specifically, Mr. Rutherford testified that he could not find any information on Med-A-Corp after he loaned Mr. Hale $150,000 to complete the deal with Med-A-Corp. According to Mr. Rutherford, he called Mr. Hale on July 2, the same day that the $150,000 check from Ink Jet had been delivered to Mr. Hale, and asked him to hold the check and return it when Mr. Rutherford got back to Little Rock the following week. Mr. Hale agreed to return the money as requested. Mr. Rutherford further testified that he returned to Little Rock on Tuesday, July 6, and Mr. Hale gave the money back to him on that date. That transaction is evidenced by the following exhibits introduced by the State at trial, each of which is dated July 6, 1993: