Former Mayor of Cedarville Sentenced for Theft of FEMA Funds

FORT SMITH—Conner Eldridge, United States Attorney for the Western District of Arkansas, announced today that Danny Armstrong, the former mayor of Cedarville, Arkansas, was sentenced to four years’ probation with the first six months as home detention by Chief United States District Court Judge P.K. Holmes. Armstrong was previously convicted for obtaining funds from an agency of the United States by fraud; namely, the Federal Emergency Management Agency (FEMA).

Armstrong was elected Mayor of Cedarville in 2007 and served in that position until his resignation in July 2011.

Armstrong waived indictment and pleaded guilty to an information on October 26, 2011.

According to the plea agreement, FEMA deposited $131,038.91 in government funds into the Cedarville Street Fund account on June 1, 2009. In July 2009, Armstrong opened a bank account at Citizens Bank and Trust titled “Mayor Account” using a $11,352.85 refund check from a vendor to open the account. The Cedarville City Council did not authorize any funds to be deposited in this account, but instead, authorized a zero balance account with a debit card to be used when the mayor was traveling on city business. The Cedarville City Council had authorized a procedure whereby monies from the general fund were to be transferred into the Mayor Account to cover travel expenditures. From July 2009 to June 2010, Armstrong intercepted and deposited approximately $15,609.86 in checks into the Mayor Account that were made out to the city of Cedarville and were supposed to be deposited into other city accounts such as the general fund or the street/road fund. During the same time period, Armstrong withdrew $4212 via unauthorized ATM transactions and paid personal expenses of $5,970.70 by means of checks and electronic transfers that were also unauthorized. Armstrong’s actions resulted in a total loss to the city of Cedarville in the amount of $10,182.70.

This case was investigated by the Federal Bureau of Investigation. Assistant United States Attorney Candace Taylor prosecuted the case for the United States.