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Representative Joe Armstrong Pleads Not Guilty To Fraud, Tax Evasion

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Posted at 5:07 PM, Jun 19, 2015
and last updated 2015-07-09 01:49:40-04

NASHVILLE, Tenn. (AP) -- State Representative Joe Armstrong of Knoxville has pleaded not guilty to federal fraud and tax evasion charges connected to an increase in the state's cigarette tax.

WBIR-TV reported the Knoxville Democrat was restrained by handcuffs and leg shackles when he appeared before U.S. Magistrate C. Clifford Shirley Jr. Friday.

His trial was set for August 25, but the date was said to likely change.

The indictment filed Tuesday alleges that Armstrong devised a scheme beginning in 2006 to profit from the cigarette tax hike planned by then-Governor Phil Bredesen.

According to the charges, Armstrong borrowed $250,000 to buy tax stamps at the old 20-cent rate, and then sold them at a profit after lawmakers approved a 42-cent increase.

The lawsuit said Armstrong failed to report more than $318,000 in income. 

(Copyright 2015 by The Associated Press. All Rights Reserved.)