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Files then directed an unnamed associate to open a bank account in the associate's name. When the City of Fort Smith paid out $25,900 to the unnamed associate's bank account, Files directed the associate to withdraw $11,900 of the funds in the form of a cashier's check made payable to FFH Construction, Files' construction company. The remaining $14,000 was withdrawn in cash and given directly to Files. Files allegedly used the cash to prop up his construction company and to give bonuses to his employees. It is not clear how much of the cash Files pocketed himself.

Files faces maximum penalties of 10, 20 and 30 years for the money laundering, wire fraud, and bank fraud pleas, respectively. He also faces fines of up to $1.5 million.

Separately, Files admitted to fraudulently obtaining $57,000 from First Western Bank by submitting a false loan application in November 2016. Files lied about his ownership of a forklift machine, which he claimed as collateral. The day after entering his guilty plea, Files announced his intent to resign his senate seat.

Files also faces civil suits related to alleged deceptive construction practices. In one of the suits, the City of Fort Smith alleges that it contracted with Files to perform roofing he has yet to perform despite accepting payment for it.

Files is the latest in a recent string of Arkansas politicians accused of corruption and the second lawmaker in the past year to plead guilty to federal charges of mishandling General Improvement Funds. Former State Senator Jon Woods pleaded not guilty to accusations that he directed state money to Ecclesia College in return for kickbacks. Former State Representative Micah Neal pleaded guilty last year to one count of fraud related to that case.

— Dennis Mahoney, Mayer Brown