NASHVILLE, Tenn. (AP) -- A federal grand jury has indicted Democratic state Representative Joe Armstrong of Knoxville on fraud and tax evasion charges.
The indictment filed Tuesday in U.S. District Court alleged that Armstrong devised a scheme beginning in 2006 to profit from an anticipated increase in the state's cigarette tax planned by then-Governor Phil Bredesen.
According to the indictment, Armstrong bought tax stamps at the old 20-cent rate, and then sold them at a profit after lawmakers voted to increase the tax to 62 cents per pack. The lawsuit said Armstrong failed to report more than $318,000 in income from the scheme.
Armstrong's attorney, Gregory P. Isaacs, said in a statement that the 26-year lawmaker planned to plead not guilty to the charges.
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