A woman who did work for state Sen. Jake Files’ construction company said she was unaware he had used her name to obtain nearly $27,000 in state grant money for work on a sports complex.
DiAnna Gonzalez and her husband, Mike Shuffett of Pocola said they were hourly and salaried employees, respectively, of FFH Construction, not subcontractors, in December 2016 when Files submitted bids from Gonzalez, Lego Construction and Williams Power and Light to the Western Arkansas Planning and Development District (WAPDD) for a $46,500 General Improvement Fund (GIF) grant. Gonzalez was the winning bidder, and the city wired $26,945.91 of the grant to her account Dec. 30, the same day Files signed Gonzalez’s name to a W-9 IRS tax form. He requested she open up a bank account to deposit the money.
As the Times Record previously reported, the FBI is investigating Files for possible money laundering and wire fraud. An affidavit in the FBI’s search warrant application calls all three bids “false and fraudulent.”
The affidavit states, “Gonzalez stated Files instructed her to get a cashier’s check in the amount of $11,931.91 and withdraw $14,000 in cash and deliver the cashier’s check and cash to Files. Gonzalez told me she delivered the cashier’s check, made payable to FFH Construction, and $14,000 in cash to Files at 3203 Waco Street. She stated she watched as Files counted the cash out for payment to employees, which amounted to approximately $4,805. Gonzalez stated Files gave her $1,978.42 ‘in reimbursement’ and a $1,500 ‘Christmas bonus.’ Gonzalez said she saw Files place the remainder of cash and the cashier’s check in his pocket.”
Gonzalez confirmed to the Times Record that this is true, although she said she was unaware the money Files gave her came from the GIF grant.
“He told us that he had money coming in for payroll,” Gonzalez said Friday when explaining why she opened the account. “We had received one check in about five weeks, which was the first week in December, so we were just excited. He said, ‘All my accounts are overdrawn. Can ya’ll have an account I can have some money sent to? I’ve got some money coming and this is the only way I’m going to get it and this is what I’m making payroll with.’”
Files did not tell them it was money from a GIF grant, Gonzalez and Shuffett said.
“We never knew where his money was coming from if it wasn’t something we were getting from a roof job with a deposit,” Gonzalez said.
Joey McCutchen of McCutchen & Sexton: The Law Firm in Fort Smith said his clients were used as “pawns” by Files in obtaining the GIF grant.
“He used them as pawns and made up stories, fake W-9s, fake bids,” McCutchen said. “They were duped and they worked hard for him.”
Files stated in an email that Gonzalez and Shuffett were “1099 contractors” and produced an affidavit he claims is signed by Gonzalez, which allowed him to sign the W-9 on her behalf. He watched her sign it, he states. She said she did not sign it. The signature on the affidavit, however, bears more of a resemblance to Gonzalez’s signature on an FBI form than the W-9 that Files said he signed on her behalf.
According to the affidavit in the FBI’s search warrant application, Jason Williams, the owner of Williams Power & Lighting Inc., and Osvaldo Ambriz, the owner of Lego Construction, each told the FBI that they did not prepare the bids nor give Files permission to prepare them. Williams and Ambriz previously told the Times Record that they did not submit the bids. WAPDD Executive Director Sasha Grist previously told the Times Record that WAPDD did not confirm the bids before issuing a check.
Gonzalez said in an interview Friday at McCutchen’s law firm that she did not give Files permission to sign her name on the W-9, and she did not sign an affidavit that claims she allowed Files to print out and sign the W-9 to submit to the city of Fort Smith for the GIF grant.
McCutchen said that when Gonzalez was requested to go to City Administrator Carl Geffken’s office in January and show her identification, neither Files nor Geffken told her what the meeting was about. And afterward, Files was “vague” in explanation with Gonzalez as to the nature of the meeting, McCutchen said. Geffken said he met with Gonzalez to verify her identity and signature, but he does not recall discussing the GIF grant with her. Gonzalez was asked to sign her name to see if it matched the signature on the W-9 form.
Geffken also confirmed Saturday that the grant money wired to Gonzalez’s account has not been returned to the city.
“I couldn’t figure out how he submitted a bid in my name, as well as two other people’s names, and filled out a W-9 in my name and got away with it without anyone speaking to me or asking me any questions or even trying to contact me in any way, shape or form,” Gonzalez said.
Gonzalez noted that Files actually signed her name on two different W-9s because the first W-9 did not have a correct address.
Files, a Republican state senator who represents the Fort Smith area, replied by email Friday that he has been “advised to make no comment” other than what he has responded because the matter “will most likely be in litigation.”
“What I can tell you is that there are two sides to every story and I look forward to being vindicated when I am able to share my side,” Files wrote in the email.
Files was recently ordered to pay $2.1 million on a foreclosure lawsuit with First Western Bank of Booneville.
Shuffett said Files owes him more $30,000 in back pay, and he is unable to use the truck he purchased from Files for $13,500 because it has a lien on it. He is unable to obtain a title for the truck. A new engine was placed in the truck for more than $6,000.
McCutchen said Friday a decision is still being made whether to file a lawsuit against Files and FFH Construction.
“We’ve talked about a lawsuit,” McCutchen said. “They’ve been swindled out of $30,000, almost $50,000 by Files. He owes them a ton of money for work they performed, and he sold them a truck that has liens on it, which they cannot drive.”
Three checks amounting to $32,635 signed by Sebastian County Election Commissioner Lee Webb, Files' partner on the unfinished sports complex, were made out to Gonzalez in June 2016 — $10,820 on June 10, 2016; $7,331 on June 24, 2016; and $14,484 on June 22, 2016. McCutchen said this was reimbursement for materials purchased for work on the sports complex, such as the silt fence.
Shuffett said he was a project manager for FFH Construction and worked there for about 18 months ending this March. Shuffett said he oversaw more than 500 roofing jobs for FFH Construction and 20 townhouses for Trinity Multifamily Property Management.
Shuffett said he and Gonzalez struggle to find work because their names have been wrapped up with Files’ business dealings in the River Valley Sports Complex.
“We’ve had people — just because they know we worked for Jake — be nasty to us just like we’re automatically entwined with everything that he’s done,” Gonzalez said. “I just want everybody to know we had nothing to do with it. As bad as it looks, we had nothing to do with it. We were all in a situation where we were desperate to get our pay.”
Shuffett and Gonzalez operated a fiber optic installation business for 18 years, working on military bases, prior to working for FFH Construction, Shuffett said. Shuffett said they met Files in November 2015 through a family member who worked for FFH Construction. Two months later, Files hired Gonzalez as well.
McCutchen stressed that Gonzalez and Shuffett did not know there was a GIF grant for work on the sports complex.
“We were just going to do this for Jake,” Shuffett said of the sports complex. “We never knew nothing about (a) GIF or nothing, no kind of grant money. The whole FFH crew was there.”
Although Files said FFH Construction did not benefit from the job, his company is listed as the contractor on the building permit and Gonzalez and Shuffett were FFH employees.
Shuffett said they did do some water line work and laid the “silt fence” to control erosion. The silt fence work was done.
“The whole FFH crew was there working on it,” Shuffett said of the sports complex job.
Attempts to get in touch with Gonzalez for earlier news stories were unsuccessful. Gonzalez said she learned her name had been used for a GIF bid when she read about it in the newspaper. As to why she did not come forward and agree to talk with reporters earlier, Gonzalez said that she tends to have a flight reaction during stressful situations.
“I knew I hadn’t done anything wrong and my first thought was, ‘Oh my gosh, everybody thinks I have stolen,’ and I just ... it takes me a while to calm down … It’s got to the point where I don’t like everybody thinking that I’m in the middle of this or that I had anything to do with it. And it’s affected our work.”
The city entered into the contract with RVSC in March 2014, expecting the sports complex at Chaffee Crossing to be completed by June 2015 and agreed to contribute $1.6 million in installments based on the completion of milestones. The city had already paid $1.08 million before severing the contract in February after Files and Webb failed to finish the project, despite extensions. The city has filed a lawsuit against the River Valley Sports Complex to obtain the $26,945 back, for Files and Webb to pay to finish the sports complex, for Files and Webb to take responsibility for more than $200,000 owed to subcontractors for their work and to pay for the city’s legal fees.
Gonzalez and Shuffett said they did not receive the grant money, but only a portion of the money as payroll from Files.
Gonzalez and Shuffett produced a copy of a handwritten document that details how the $26,945 was split up. Shuffett said that when he and Gonzalez brought Files the money, Files counted it out and checked off people’s payroll on a sheet of paper. It includes “825” next to the initials “DG,” “1,750” next to the initials “MS” and “1500” next to “Christmas bonus.”