Editor’s Note: This story has been updated to include comments from a City Stars press release and city attorney Carol Duncan.
Jonesboro, AR – (JonesboroRightNow.com) – Jonesboro Mayor Harold Copenhaver made an announcement Friday that may connect a U.S. Justice Department investigation involving the city’s parks and recreation director to the finances of a youth sports program.
At a special meeting of the Jonesboro City Council Finance and Administration Committee called to discuss the 2026 budget, Mayor Harold Copenhaver gave the following statement:
“Following a meeting city staff had with the Department of Justice, the city is prepared to serve as a trustee for City Stars’ financial activities. The Department of Justice expressed no concerns with the protocols in place with the city and the handling of public funds. We do expect this to have a budget impact, but have no way to predict what that will be until a baseline is established.”
Copenhaver went on to say city leadership is working closely with authorities and the legislative audit with the goal of ensuring youth sports continue without issue.
“It is my understanding that the City Stars Board has recently voted to work with the city on this transition,” Copenhaver added. “We appreciate their help on this matter and their shared efforts in supporting the thousands of youth in our community that enjoy these programs.”
City Stars is a nonprofit organization acting as a recreational league for multiple sports, including soccer. It is not affiliated with the City of Jonesboro.
On Tuesday, the City of Jonesboro announced its director of Parks and Recreation, Danny Kapales, had been placed on paid administrative leave pending the results of a Department of Justice investigation.
Jonesboro Mayor Harold Copenhaver said in a news release Tuesday that the city is fully cooperating with the investigation and will continue to do so for the duration. The news release said the city would be making no further comments on the matter due to the “ongoing investigation.” A source close to the investigation told JRN this week that the probe is “financial in nature.”
In a press release sent on Friday, board members from City Stars said it and the city had been working over the past few months to “determine the best path forward for the long-term success, stability and transparency” of its programs.
It announced that the club would be dissolving as a private, independent nonprofit organization and transferring all operational responsibilities, funds, banking accounts, and sports equipment to the city.
“This decision was made with careful consideration and with the best interests of our youth and community at heart. We are confident that this transition will strengthen the structure of local recreational programming and enhance transparency in the operation of youth sports across the city,” the release said.
City attorney Carol Duncan told JRN Friday that she was part of the staff who met with the DOJ, and that the DOJ wanted to take steps to ensure the public that the City Stars money was being handled in a way that was subjective to legislative audit, checks and balances and more.
She added that the logistics of how the City would become a trustee City Stars was currently unknown because everything was happening “pretty fast.”
“That’s not really part of the investigation, that’s just trying to get confidence that the money’s being handled properly going forward, if there was any question about that,” Duncan said. “On behalf of the board of City Stars and the City of Jonesboro, we were willing to help out with that.”
During Wednesday’s Jonesboro Advertising and Promotion (A&P) Commission meeting, chairman Jerry Morgan told commissioners that the Jonesboro City Stars Booster Club had been temporarily removed from A&P grant requests “based on the ongoing investigation.” No further information was provided at that time.
JRN followed up with Morgan on Friday to clarify the reasons behind the funding removal and where that request originated. He said, “Because of Danny Kapales’ role as parks director, and his involvement with City Stars as parks director, we removed it.”
When questioned if someone asked him to remove the funding request or give him information that led him to make that decision, Morgan replied, “I can’t comment on that.”
“I’m not surprised that A&P chose not to discuss that, given there’s an ongoing investigation of a city director that obviously works quite a bit with City Stars,” said city spokesperson Brian Richardson. “Their decision to not discuss that is an A&P question. I defer to them as to why they chose not discuss that.”
At the A&P meeting, the commission set aside $30,000 in grant money to be considered for the booster club at a later time. City Stars had received $35,000 in 2025 and requested $50,000 for 2026, according to information presented at the meeting.
Richardson added that he could not comment or speculate on the nature of the Kapales investigation, nor could he comment on anything “related to Parks and City Stars.”
Questions related to finances involving City Stars and one of its subcommittees, Arkansas Revolution, have been looming since the spring of this year. Arkansas Revolution is a soccer club meant to give some of the community’s stronger soccer players a travel club option and a step up from the city’s basic-level soccer program.
In late May, JRN reported a leadership shakeup at the Arkansas Revolution Soccer Club after the entire volunteer board resigned. After the resignations, Kapales told JRN that he had helped launch the original travel soccer program in 2011 and that it operated under the nonprofit umbrella of City Stars.
According to a memo sent on April 26, the board explained the reason for the mass resignation. The memo read, in part, “We do so only after exhausting every reasonable avenue to correct ethical and governance failures that threaten the long-term health of the club.”
An audit of City Stars financial records for 2024 was conducted by the CPA firm Thomas, Speight and Noble in the wake of the concerns raised in the spring. Melissa Harrison, the audit partner for Thomas Speight and Noble, reported the audit results at a July 8, 2025, Finance and Administration Council Committee meeting.
Harrison told commissioners the audit was performed at the request of the City Stars board “after the City Stars situation.” She said there had been questions raised by the Revolution leadership regarding checks written for usage of city soccer fields. She said there was an agreement in place for Revolution players to pay $45 per player for use of the city fields.
Harrison said Revolution leadership was concerned when they could not identify where the field usage money was being received by the city when searching city financial records.
“You won’t find that because the city isn’t receiving that money, it’s all in one account,” Harrison said, indicating City Stars and Arkansas Revolution shared a common checking account.
Harrison reported to the commissioners that she found nothing improper in the audit of the City Stars and Arkansas Revolution account.
During discussion following Harrison’s presentation, council member David McClain asked questions regarding the handling of cash for City Stars events. McClain noted that the audit and financial statements showed cash from gate receipts and concession sales were combined. He questioned Kapales about the process of accounting for the cash.
Kapales said there were multiple people involved with signing-off on the counting of cash, both at the event location and again when the cash was received by the parks department staff.
Former mayoral candidate Jeremy Terrell spoke during public comments and contradicted Kapales’ assertion to committee members that all City Stars workers were paid by two-signature checks. Terrell said he had knowledge of workers who had received cash payments. Duncan asked Terrell to supply the names of said workers.
Committee chairman Joe Hafner said he recognizes that the set-up of the City Stars organization is unique and needs to be changed, but that the organizational structure was created in 2004 and had been that way since. “The Revolution situation just brought it to light,” Hafner said.
Assistant Jim Stearns is the acting Parks Director until further notice. He declined to comment on the investigation.
Additional questions regarding the investigation were deferred to the FBI Little Rock office. JRN reached out to FBI Little Rock public information officer Jessica Franklin, who said there was “no update or comment” regarding the status of the investigation.
At the time of this writing, the investigation is ongoing and there have been no arrests.
“An investigation is simply that: an investigation,” Richardson explained. “As the city, we’re as transparent as possible … during the process, and certainly [we] want people to understand that an investigation is that. It does certainly limit what we can and can’t say, you know, in order to make sure that they are able to do a thorough investigation.”