Kelsey, who angrily denied charges, to change plea in federal case
State Sen. Brian Kelsey, a Germantown Republican who blamed a political witch hunt for a federal indictment on campaign finance charges, now plans to change his not-guilty plea in the case.
Kelsey’s attorneys made the motion for a hearing on the matter on Thursday. The lawmaker’s codefendant, Nashville club owner Josh Smith, pleaded guilty last week.
Kelsey is accused of illegally transferring money from his state campaign account to Smith’s PAC and then directing the money to be redirected to a national group to spend on his 2016 congressional bid. Kelsey finished fourth in that contest.
U.S. District Judge Waverly Crenshaw has yet to schedule Kelsey’s change-of-plea hearing.
Feds charge 11 in abortion clinic blockade
Federal prosecutors are charging 11 people with blocking access to a Mt. Juliet abortion clinic in March.
Here’s the release from the U.S. attorney’s office:
NASHVILLE – A federal indictment unsealed today charges eleven individuals with violations of the Freedom of Access to Clinic Entrances (FACE) Act, announced U.S. Attorney Mark H. Wildasin, for the Middle District of Tennessee and Kristen M. Clarke, Assistant Attorney General for the Civil Rights Division.
The indictment, returned on Monday by a federal grand jury sitting in Nashville, charges the following seven individuals with conspiracy against rights secured by the FACE Act, and committing FACE Act violations:
Chester Gallagher, 73, of Lebanon, Tennessee; Heather Idoni, 58; Calvin Zastrow, 57; and Caroline Davis, 24; all of Michigan; Coleman Boyd, 51, of Bolton, Mississippi; Dennis Green, 56, of Cumberland, Virginia; and Paul Vaughn, 55, of Centerville, Tennessee.
The indictment also charges the following individuals with committing FACE Act violations: Eva Edl, 87, of Aiken, South Carolina; Eva Zastro, 24, of Dover, Arkansas; James Zastro, 25, of Eldon, Missouri; and Paul Place, 24, of Centerville, Tennessee. All defendants will have appearances scheduled in U.S. District Court in Nashville at a later date.
The indictment alleges that, beginning in February 2021, Chester Gallagher utilized social media to promote a series of anti-abortion events scheduled for March 4-7, 2021, in the Nashville area. Other co-conspirators then utilized Facebook to coordinate travel and logistics and to identify other participants for the blockade. On March 4, 2021, Coleman Boyd and Chester Gallager advertised the blockade of the Carafem Health Center Clinic, in Mount Juliet, Tennessee, which was planned for the following day. In his social media post, Gallagher referred to the blockade as a “rescue.” Boyd also began a Facebook livestream broadcast of the clinic blockade at 7:45 a.m. on March 5, 2021. This livestream broadcast was titled, in part, “Mt. Juliet, TN Rescue March 5, 2021,” and livestreamed the blockade event as his coconspirators and others blocked the clinic’s entry doors and prevented a patient and an employee from entering. The livestream also broadcast members of the group attempting to engage a patient and her companion as Boyd told his livestream audience that the patient was a “mom coming to kill her baby.”
The indictment further alleges that on March 5, 2021, the 11 individuals, aided and abetted by one another, used force and physical obstruction to injure, intimidate, and interfere with employees of the clinic and a patient who was seeking reproductive health services.
If convicted, those charged with conspiracy face up to 11 years in prison and fines of up to $250,000. Others face up to one year in prison for the misdemeanor offense and fines of up to $10,000.
This case was investigated by the FBI and is being prosecuted by the Civil Rights Coordinator of the U.S. Attorney’s Office and trial Attorneys of the Department’s Civil Rights Division.
An indictment is merely an accusation. All defendants are presumed innocent until proven guilty in a court of law.
Cothren also wants to punt federal trial date
Former legislative staffer Cade Cothren is following the lead of his onetime boss Glen Casada in seeking a delay in their trial on federal bribery and kickback charges.
Casada requested a delay of up to six months last week, noting prosecutors were not opposed to the motion. Cothren’s lawyer, who recently got the judge to approve pushing back the deadline for a motion by just one week, on Monday filed a similar request to put off the trial originally scheduled for Oct. 25.
Attorneys for both men say they plan to “vigorously defend” against the allegations made in the indictment.
Casada indictment drops on 3rd anniversary of successor Sexton’s election as House speaker
Three years to the day that Rep. Cameron Sexton took over as speaker of the Tennessee House of Representatives, federal prosecutors indicted his predecessor, Glen Casada, on bribery and kickback charges.
Here’s what Sexton had to say about Tuesday’s charges against Casada and his onetime chief of staff, Cade Cothren:
In Tennessee, we will not tolerate public corruption, defrauding our state, or bribery at any level. I commend the Federal Bureau of Investigation for its hard work, diligence, and dedication that resulted in this morning’s arrests.
As I have previously stated on several occasions, shortly after becoming speaker in 2019, I began assisting the federal authorities during and throughout their investigation — including leading up to today’s indictments, and I will continue to do so if a trial is needed.
Together, our legislative body has stood strong over the past two years to take significant actions during this investigation by passing laws to strengthen campaign finance regulations and new ethics laws for elected officials and staff.
Today is a good day for Tennesseans because we did not turn a blind eye on these criminal activities.
And here is House Democratic leader Karen Camper’s reaction:
When something like this happens, it reflects poorly on the entire Legislature. We are elected to serve the public and when that trust is broken, it’s very disheartening and erodes the confidence that our constituents have in government. This does however, highlight how badly campaign finance reform continues to be needed and that bi-partisan legislation already passed needs to go much farther.
This from House Republican leader William Lamberth and House Republican Caucus Chair Jeremy Faison:
The illegal behavior outlined in today’s indictments is extremely serious, and disappointing to our entire caucus. We appreciate Speaker Sexton’s leadership on this situation, as well as the efforts of our House leadership team in bringing these crimes to light. We also stand with federal law enforcement and are grateful for their efforts to hold those responsible for these crimes accountable. Now, we can all move forward and continue focusing on meeting the needs of citizens across Tennessee.
And here is Gov. Bill Lee’s spokeswoman Casey Sellers:
We trust the legal process and continue to hold Tennessee’s public servants to high standards of accountability. The Governor commends Speaker Sexton for running the House with integrity and setting the expectation that elected leaders must serve Tennesseans in good faith.
‘Make sure no one knows it’s me:’ Read the 20-count indictment of former speaker, top aide
Here is the the 20-count federal indictment of former state House Speaker Glen Casada (R-Franklin) and his onetime chief of staff, Cade Cothren:
Continue readingUNITED STATES OF AMERICA v. [1] GLEN CASADA, [2] CADE COTHREN. No. 3:22-00282
INDICTMENT
THE GRAN JURY CHARGES:
BACKGROUND ALLEGATIONS
At all times material to this Indictment unless otherwise indicated:
1. The Constitution of the State of Tennessee (“the State”) established that the legislative authority of the State shall be vested in a General Assembly, which shall consist of a Senate and House of Representatives.
2. The Tennessee House of Representatives (“Tennessee House”) consisted of approximately ninety-nine members appointed among counties and electoral districts. Representatives served two-year terms. The Speaker of the House was the presiding officer of the Tennessee House.
3. GLEN CASADA was a member of the Tennessee House, representing District 63, which included part of Williamson County, Tennessee. CASADA was first elected to the Tennessee House in or around 2003 and was reelected to serve as a Representative in each subsequent General Assembly. CASADA served as Speaker of the Tennessee House from in or around January 2019 until in or around August 2019. In or around August 2019, CASADA resigned as Speaker after allegations became public regarding his then Chief of Staff, CADE COTHREN, but CASADA remained as a member of the Tennessee House.
4. Individual 4 was a member of the Tennessee House, representing District 26, which included part of Hamilton County, Tennessee. Individual 4 was first elected to the Tennessee House in or around November 2018 and was reelected in or around November 2020.
5. Individual 4 owned and operated a political consulting company called Company 1. Company 1 provided political consulting, mail, and project management services. Company 1 held Bank Account x0738 at Financial Institution 2.
6. CASADA owned and operated a political consulting company called Company 2. CASADA started Company 2 in or around October 2019. Company 2 held Bank Account x4447 at Financial Institution 2.
7. As Representatives, CASADA and Individual 4 each held an office of trust under the Constitution of the State of Tennessee and owed a fiduciary duty to provide honest services to the State and its citizens. As members of the State of Tennessee’s 111th General Assembly, on or about January 8, 2019, CASADA and Individual 4 each swore that they would “not propose or assent to any bill, vote or resolution, which shall appear to me injurious to the people, or consent to any act or thing, whatever, that shall have a tendency to lessen or abridge their rights and privileges.”
8. The Tennessee House adopted Permanent Rules of Order for the 111th General Assembly. The Rules included an Ethics Code, which stated that “Representatives should avoid conduct that even appears to violate the trust that the people have placed in them.” Conduct violating the Ethics Code included: “Actions that destroy a representative’s independence of judgment as a legislator”; “Actions that are an abuse of the representative’s official position, including, but not limited to, placing undue influence upon any state department, agency, court or governmental subdivision”; and “Actions that are a personal interest in conflict with the proper discharge of the representative’s duties.” The Tennessee House adopted the Rules of Order under CASADA’s name as Speaker, and, while he served in this role, CASADA was responsible for preserving them. As Speaker, CASADA was also responsible for appointing members of the House Ethics Committee.
9. COTHREN was a businessman and former Chief of Staff to CASADA when CASADA was Tennessee House Speaker. In 2019, multiple news forums published allegations that COTHREN had engaged in inappropriate conduct. On or about May 3, 2019, COTHREN resigned his position as Chief of Staff.
10. In or around November 2019, COTHREN established Phoenix Solutions, LLC, with CASADA and Individual 4’s knowledge and support. Phoenix Solutions provided constituent mail services to members of the Tennessee General Assembly and to political campaigns for State offices. Phoenix Solutions held Bank Account x3886 at Financial Institution 1 and Bank Account x9665 at Financial Institution 3.
11. The State allocated Tennessee Representatives $3,000 annually to fund postage and printing of items to be sent to the legislators’ constituents (the “Mailer Program”). According to Tennessee House guidelines, Representatives were permitted to use Mailer Program funds to design and mail legislative update mailers and legislative surveys to their constituents. Representatives were permitted to use campaign funds to offset additional expenses beyond the $3,000 allocated under the Mailer Program.
12. The Tennessee House Speaker’s Office had the authority to approve or deny a vendor to provide services or any mailing funded by the Mailer Program.
13. The Office of Legislative Administration (“OLA”) managed the operation of the Mailer Program in consultation with the Senate and House Speakers. OLA’s Director of Legislation, in consultation with the Senate and House Speakers and their Offices, was responsible for approving invoices related to the Mailer Program and managing disbursements of State funds to vendors.
14. In each of the calendar years 2019, 2020, and 2021, the State of Tennessee received more than $10,000 in federal benefits.
COUNT ONE
18 U.S.C. § 371
(Conspiracy)
15. Paragraphs 1 through 14 are incorporated and realleged as if fully set forth herein.
I. Objects of the Conspiracy
16. Beginning in or around October 2019 and continuing until in or around January 2021, in the Middle District of Tennessee and elsewhere, CASADA and COTHREN did knowingly conspire and agree with each other and with other individuals known and unknown to the Grand Jury, to commit the following offenses against the United States:
a. Theft Concerning Programs Receiving Federal Funds: that is, for CASADA and Individual 4, agents of Tennessee, a State which during each of calendar years 2019, 2020, and 2021 received federal benefits in excess of $10,000, and together with and aided and abetted by COTHREN, and others known and unknown to the Grand Jury, to embezzle, steal, obtain by fraud, and otherwise without authority knowingly convert to the use of any person other than the rightful owner and intentionally misapply, property that is valued at $5,000 or more, and was owned by, and was under the care, custody, and control of the State of Tennessee, in violation of Title 18, United States Code, Sections 666(a)(l)(A) and 2;
b. Bribery and Kickbacks Concerning Programs Receiving Federal Funds: that is, for CASADA and Individual 4, agents of Tennessee, a State which during each of calendar years 2019, 2020, and 2021 received federal benefits in excess of $10,000, aided and abetted by others known and unknown to the Grand Jury, to corruptly solicit, demand, accept, and agree to accept for their own benefit, things of value from COTHREN, intending to be influenced and rewarded in connection with a business, transaction, and series of transactions of the State of Tennessee valued at $5,000 or more, that is, payments of State funds to Phoenix Solutions, both directly and through Company 1 and Company 2, for mailer services, in violation of Title 18, United States Code, Sections 666(a)(l)(B) and 2;
c. Bribery and Kickbacks Concerning Programs Receiving Federal Funds: that is, for COTHREN, aided and abetted by others known and unknown to the Grand Jury, to corruptly give, offer, and agree to give things of value to CASADA and Individual 4, agents of Tennessee, a State which during each of calendar years 2019, 2020, and 2021 received federal benefits in excess of $10,000, intending to influence and reward CASADA and Individual 4 in connection with a business, transaction, and series of transactions of the State of Tennessee valued at $5,000 or more, that is, payments of State funds to Phoenix Solutions, both directly and through Company 1 and Company 2, for mailer services in violation of Title 18, United States Code, Sections 666(a)(2) and 2; and
d. Honest-Services Wire Fraud: that is, for CASADA, COTHREN, and Individual 4, and others known and unknown to the Grand Jury, to devise and intend to devise a scheme and artifice to defraud and to deprive Tennessee and the citizens of Tennessee of their right to the honest services of a public official, namely, the honest services of CASADA and Individual 4, members of the Tennessee House of Representatives and elected state officials, through bribery and kickbacks, in violation of Title 18, United States Code, Sections 1343 and 1346.
Casada, Cothren indicted on federal bribery, kickback charges
Former Tennessee House Speaker Glen Casada and his onetime chief of staff, Cade Cothren, have been indicted on federal bribery and kickback charges. The FBI arrested both at their homes on Tuesday morning.
Casada is retiring from the House this year after stepping down from the speakership amid scandal in 2019. He was overwhelmingly defeated in his bid for Williamson County Clerk earlier this year.
The charges stem from the operation of Phoenix Solutions, a shadowy campaign mail vendor that also led to the guilty plea of former Rep. Robin Smith (R-Hixson) earlier this year.
Casada and Cothren pleaded not guilty in a court appearance later on Tuesday morning.
Here’s Tuesday’s release from the U.S. Attorney’s Office:
NASHVILLE –Tennessee State Representative Glen Casada, 63, of Franklin, Tennessee, and his former Chief of Staff Cade Cothren, 35, of Nashville, were indicted by a federal grand jury yesterday and charged with conspiracy to commit the following offenses: theft from programs receiving federal funds; bribery and kickbacks concerning programs receiving federal funds; honest services wire fraud; and conspiracy to commit money laundering. Both were arrested at their homes this morning by FBI agents and will make initial appearances before a U.S. Magistrate Judge later today.
The announcement was made by Mark H. Wildasin, U.S. Attorney for the Middle District of Tennessee and Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division.
The 20-count indictment, unsealed this morning, also charges Casada and Cothren with using a fictitious name to carry out a fraud; theft concerning programs receiving federal funds; eight counts of money laundering; six counts of honest services wire fraud; and two counts of bribery and kickbacks.
According to the indictment, beginning in and around October 2019, Casada, while representing Tennessee House District 63, Cothren, and another conspirator, also a member of the Tennessee House of Representatives, engaged in a fraudulent scheme to enrich themselves by exploiting Casada and the other conspirator’s official positions as legislators to obtain State approval of Phoenix Solutions as a Mailer Program vendor to provide constituent mail services to members of the Tennessee General Assembly. Casada, Cothren, and the other conspirator further sought to obtain State funds for Phoenix Solutions, Casada’s political consulting business, and a political consulting business owned by the other conspirator. It was further part of the conspiracy for Casada and the other conspirator to enrich themselves by obtaining bribes and kickbacks from Cothren, in exchange for securing the approval of Phoenix Solutions as a mailer program vendor.
The indictment alleges that Casada and the other conspirator told members of the Tennessee General Assembly that Phoenix Solutions was run by an individual named “Matthew Phoenix,” an experienced political consultant who had previously worked for a Washington, D.C.-based consulting firm. In fact, Cothren operated Phoenix Solutions, and Casada, Cothren, and the other conspirator knew that “Matthew Phoenix” was a fictitious person and secretly profited from the fraudulent venture. Casada, Cothren, and the other conspirator concealed their involvement in Phoenix Solutions by submitting sham invoices to the State of Tennessee in the names of political consulting companies owned by Casada and the other conspirator, for the purpose of secretly funneling money from the State to Phoenix Solutions through the bank accounts of these companies. In 2020, these companies and Phoenix solutions received approximately $51,947 from the State in payments associated with the mailer program.
The indictment also contains a forfeiture allegation in which the United States seeks to recover all proceeds of the crimes, including a money judgement representing the value of the proceeds traceable to any offense of conviction.
If convicted, Casada and Cothren each face up to 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
This case was investigated by the FBI. Assistant U.S. Attorney Amanda J. Klopf and Trial attorney John P. Taddei of the Justice Department’s Public Integrity Section are prosecuting the case.
An indictment is merely an accusation. The defendants are presumed innocent until proven guilty in a court of law.
UPDATE: Smith strikes plea agreement with feds
State Rep. Robin Smith (R-Hixson) has struck a plea agreement with federal prosecutors over a kickback scheme related to a political vendor called Phoenix Solutions, according to court records.
“Ms. Smith submits that the parties have reached a plea agreement to resolve the pending charges in this case and that she is ready to change her plea in this matter,” according to a filing on Smith’s behalf on Monday afternoon.
A hearing on the matter has been scheduled for Tuesday at 4:30 p.m. Central in Nashville.
Earlier Monday, federal prosecutors made charges agaisnt Smith public alleging she was was joined by two unnamed individuals who are nonetheless easily identified as former House Speaker Glen Casada (R-Franklin) and his onetime chief of staff Cade Cothren.
Smith, a former state Republican Party chair, resigned from the House after being charged.
“I want you to know that serving the great people of this district, and indeed, all of Tennessee, has truly been an honor,” Smith wrote in her letter to House Speaker Cameron Sexton (R-Crossville) “I have resigned with the deepest of humility and out of respect for the role of public service.”
Correction: An earlier version of this post mistakenly referred to an indictment. The charging document was filed as an information.
Read the full charges here:
THE UNITED STATES CHARGES:
BACKGROUND ALLEGATIONS
At all times material to this Information unless otherwise indicated:
1. Defendant ROBIN SMITH was a member of the Tennessee House of Representatives (“Tennessee House”), representing District 26, which included part of Hamilton County, Tennessee. SMITH was first elected to the Tennessee House in or around November 2018. SMITH also owned and operated a political consulting company called Company I. Company 1 provided political consulting, mail, and project management services.
2. Individual 1 was a member of the Tennessee House, first elected in 2003. Individual I served as Speaker of the Tennessee House from in or around January 2019 until in or around August 2019. In or around August 2019, Individual 1 resigned as Speaker after a scandal became public. Individual 1 also owned and operated a political consulting company called Company 2. Individual 1 started Company 2 in or around October 2019 to provide fundraising services to Political Party 1 lawmakers.
3. Individual 2 was a businessman and former Chief of Staff to Individual 1 when Individual 1 was Tennessee House Speaker. In 2019, multiple news forums published allegations that Individual 2 had committed inappropriate and illegal conduct. Based on public reporting, Individual 2 admitted certain allegations, and, on or about May 3, 2019, Individual 2 resigned his position as Chief of Staff.
4. The State of Tennessee (“the State”) allocated Tennessee Representatives $3,000 annually to fund postage and printing of items to be sent to the legislators’ constituents (“the Mailer Program”). According to Tennessee House guidelines, Representatives were permitted to use Mailer Program funds to design and mail “legislative update mailers” and legislative surveys to their constituents. Representatives were permitted to use campaign funds to offset additional expenses beyond the $3,000 allocated under the Mailer Program.
5. The Tennessee House Speaker’s Office had the authority to approve or deny a vendor to provide services or any mailing funded by the Mailer Program.
6. In or around November 2019, Individual 2 established Phoenix Solutions, LLC. Phoenix Solutions was established, with SMITH and Individual l’s knowledge and support, for the purpose of offering mail and consulting services for legislative members facing primary challengers, and was later expanded to offer constituent mail services to members of the Tennessee General Assembly. SMITH, Individual 1, and Individual 2 told others, including members of the Tennessee General Assembly and the House Speaker’s Office, that Phoenix Solutions was run by an individual named “Matthew Phoenix.” SMITH, Individual 1, and Individual 2 claimed that Matthew Phoenix was an experienced political consultant who had worked for Consulting Firm 1, a real company based in Washington, D.C. In truth and in fact, Individual 2 ran Phoenix Solutions and SMITH, Individual 1, and Individual 2 profited from it.
7. SMITH, Individual 1, and Individual 2 knew that Matthew Phoenix was a fictitious person and was, in truth and in fact, Individual 2.
8.SMITH, Individual I, and Individual 2 concealed Individual 2’s involvement in Phoenix Solutions from the State and members of the Tennessee General Assembly due to the expectation that Phoenix Solutions would not be approved by the Tennessee House Speaker’s Office, acting on behalf of the State, or hired as a vendor by individual members if Individual 2′ s involvement was disclosed. SMITH, Individual 1, and Individual 2 also concealed the fact that Individual 2 kicked back a portion of the profits from the State and members of the Tennessee General Assembly to SMITH and Individual 1 due to the expectation that Phoenix Solutions would not be approved by the Tennessee House Speaker’s Office, acting on behalf of the State, or hired as a vendor by individual members Individual 2’s operational involvement and financial interests in the business and the kickbacks to SMITH and Individual 1 were disclosed.
9. SMITH and Individual 1 received kickbacks from Individual 2 in exchange for using their positions as members of the Tennessee House of Representatives to perform official acts, including pressuring the Tennessee House Speaker’s Office to approve Phoenix Solutions as a Mailer Program vendor and disburse State funds to Phoenix Solutions.
10. Individual 2, with SMITH and Individual’s knowledge and support, set up an email account for Matthew Phoenix, matthew@powerofphoenix.com, which Individual 2 used to conduct business on behalf of Phoenix Solutions.
11. Individual 2 incorporated Phoenix Solutions as a limited liability company (LLC) in New Mexico. Individual 2 set up a United States Postal Service post office box for Phoenix Solutions there and forwarded the mail received by that post office box to his home address in Nashville. Individual 2 later explained to SMITH that he established the post office box in New Mexico because that state allows the anonymous registration of LLCs.
12. In or around January 2020, SMITH was informed by an employee of the Tennessee House Speaker’s Office that the Speaker’s Office needed to work directly with the third-party vendor, which was a change in the existing guidelines employed by legislative members for constituent mail. SMITH informed Individual 2 of this fact. Individual 2 was notified that the State could not pay Phoenix Solutions without an Internal Revenue Service Form W-9 on file. In response, Individual 2, assuming the identity of Matthew Phoenix to disguise his true identity, sent a W-9 signed by “Matthew Phoenix” from the matthew@powerofphoenix.com email address to the Tennessee House Majority Caucus Advisor for the purpose of filing it with the State.
13. On or about December 18, 2019, SMITH emailed Individual 2. Referencing a potential future conversation related to Phoenix Solutions with a Political Patty 1 employee regarding a campaign mailing list that each incumbent legislative member was to receive, SMITH told Individual 2 that he “may have to assume the role of Matthew again.” Individual 2 replied to SMITH, “Matthew, reporting for duty!” and included a graphic interchange format (“.gif”) picture of a salute from Harrison Ford’s character Han Solo in the movie Star Wars.
14. On or about January 24, 2020, SMITH emailed Individual 2, writing, “We’ll start with this…Matthew…you might expect some type of call, email.” Below, SMITH copied an email chain between SMITH, the Acting Chief of Staff to the House Speaker, and the General Assembly’s Director of Legislation. In the email chain, SMITH asked the officials about the status of Mailer Program payments to Phoenix Solutions and why there was an issue with processing them. The Acting Chief of Staff wrote SMITH, “I’m on it.” SMITH replied, “Don’t crush her, but [the Director of Legislation has] been telling this vendor that the check’s on the way for about two weeks.” SMITH falsely added, “It’s guys from [Consulting Firm 1] who did mail two years ago that left and started their own gig…tired of doing the DC/Trump stuff. Thanks.” SMITH then forwarded the email chain to Individual 2, adding the message, “Shhhhhhhhhh.”
15. Individual 3 was Individual 2’s girlfriend. At times, Individual 3 assumed the fictitious role of “Candice,” another alleged employee of Phoenix Solutions.
16. On or about June 16, 2020, Individual 3 and Individual 2 emailed each other as “Candice” and “Matthew.” The purpose of the email exchange was to falsely make it appear as if two employees of Phoenix Solutions were having an exchange about the need to secure payment on outstanding Mailer Program invoices that the State had not yet paid. Individual 2, using the matthew@powerofphoenix.com email account, then forwarded the exchange to SMITH.
17. On or about June 22, 2020, SMITH emailed the General Assembly’s Director of Legislation, copying the Acting Chief of Staff to the House Speaker, to complain about delays in Mailer Program payments from the State to Phoenix Solutions. SMITH forwarded them the June 16, 2020, email exchange between “Candice” and “Matthew” complaining about the delayed payments. Above that email chain, SMITH wrote, “[Director of Legislation], I was cc’d on this last week. … It would be either illegal or unethical to move to print without knowing payment was coming, so the bulk permit number is provided on the invoice. Simpler, asking a firm to be liable for the cost with the printing completed before knowing payment may or may not be approved is suspect. Is there something going on?” Enclosed within SMITH’s email were invoices from Phoenix Solutions for legislative mailers on behalf of two Representatives, for $4,547.50 and $5,537.
18. On or about May 20, 2020, SMITH discussed Phoenix Solutions with a member of the Tennessee House Political Party 1 caucus. SMITH described Phoenix Solutions as her preferred survey mailer company. SMITH falsely said that Phoenix Solutions was owned and operated by Matthew Phoenix, an experienced political consultant with whom SMITH did business when SMITH used Washington, D.C.-based Consulting Firm I for political work. SMITH falsely said that Matthew Phoenix and his associate, Candice, got tired of living in the Washington, D.C. area and decided to move back home to New Mexico, where Phoenix started Phoenix Solutions. SMITH falsely said that she used Phoenix Solutions because of the quality of its work.
19. On or about August 10, 2020, SMITH attended a meeting of the Political Party 1 House campaign committee. Present at the meeting were several Tennessee Representatives, officials from the Speaker’s Office, and a committee consultant. SMITH repeated the same false statements regarding Phoenix Solutions that she had made to the caucus member on or about May 20, 2020. She also falsely told the committee members that she did not make any money from Phoenix Solutions.
20. On or about April 2, 2020, Individual 2 sent an email to SMITH and Individual 1. The email stated, “Friends, Here’s our up-to-date printing spreadsheet. All of these checks have been collected and deposited. All bills related to these print jobs have also been paid. So, let me know what address is best for you and I will cut checks for each of you?” Individual 2 provided a breakdown of total profit earned from each client. SMITH, Individual 1, and Individual 2 shared the profits, with Individual 2 earning 30%. Individual 1 and SMITH each earned $4,143.64, which was 25% of the business, each. Individual 2 wrote that the remaining 20% of the profit was “left in business.” Individual 2 also discussed ways to cut Phoenix Solutions’ future costs.
21. From on or about June I, 2020, through on or about December 1, 2020, Phoenix Solutions took on more varied projects, but continued to receive payments from the State-funded Mailer Program and campaign accounts of members of the General Assembly. During that timeframe, a Phoenix Solutions bank account ending in x3886 received revenue of approximately $158,165, excluding payments from campaign accounts associated with SMITH and Individual 2. From on or about January 1, 2020, through on or about December 31, 2020, Phoenix Solutions, Company 1, and Company 2 received approximately $51,947 from the State in payments associated with the Mailer Program.
22. On or about September 10, 2020, SMITH endorsed and deposited check number 152, dated September I, 2020, in the amount of $12,003.16, from Phoenix Solutions’ account number x3886 into a bank account associated with her consulting firm, Company 1. Individual 2 signed the check in his given name and wrote “Consulting” on the memo line.
23. On or about December 17, 2020, SMITH endorsed and deposited check number 170, dated December 16, 2020, in the amount of $12,116.96, from Phoenix Solutions’ account number x3886 into a bank account associated with Company 1. Individual 2 signed the check in his given name and wrote “Consulting” on the memo line.
COUNT ONE
18 u.s.c. §§ 1343, 1346
(Honest Services Wire Fraud)24. Paragraphs 1 through 23 are incorporated and realleged as if fully set forth herein.
25. Beginning in or around November 2019 and continuing until in or around January 2021, in the Middle District of Tennessee and elsewhere, the Defendant, ROBIN SMITH, aided and abetted by others, including Individual 1 and Individual 2, devised and intended to devise a scheme and artifice to defraud and deprive the citizens of the Middle District of Tennessee and the government of Tennessee of their right to the honest services of a public official, namely the honest services of SMITH and Individual 1, members of the Tennessee House of Representatives, through kickbacks.
26. In the Middle District of Tennessee and elsewhere, SMITH, aided and abetted by others, including Individual 1 and Individual 2, having devised and intended to devise the above described scheme, and for the purpose of executing the scheme, transmitted and caused to be transmitted by means of wire communication in interstate commerce, writings, signs, signals, pictures, and sounds.
All in violation of Title 18, United States Code, Sections 1343, 1346, and 2.
FORFEITURE ALLEGATION
1. The allegations contained in this Information are re-alleged and incorporated by reference as if fully set forth in support of this forfeiture.
2. Upon conviction of Count One of this Information, the defendant, ROBIN SMITH, shall forfeit to the United States, pursuant to Title 18, United States Code, Section 981(a)(l)(C), by Title 28, United States Code, Section 2461, any property, real or personal, which constitutes or is derived from proceeds traceable to the offense, including but not limited to a money judgment in an amount to be determined representing the value of the proceeds of the offense.
3. If any of the property described above, as a result of any act or omission of SMITH:
a. cannot be located upon the exercise of due diligence;
b. has been transferred or sold to, or deposited with, a third party;
c. has been placed beyond the jurisdiction of the Court;
d. has been substantially diminished in value; or
e. has been commingled with other property that cannot be divided without difficulty, the United States shall be entitled to forfeiture of substitute property, and it is the intent of the United States, pursuant to Title 21, United States Code, Section 853(p), as incorporated by reference in Title 28, United States Code, Section 2461(c), to seek forfeiture of any other prope1iy of SMITH up to the value of the property listed above as being subject to forfeiture.
Mark H. Wildasin
United States Attorney
Middle District of Tennessee
Indicted senator cites ‘exciting change’ in personal life in deciding agaisnt re-election bid
State Sen. Brian Kelsey, a Germantown Republican awaiting a federal criminal trial related to campaign fundraising during a 2016 congressional bid, announced he won’t seek re-election to the General Assembly this year.
“I will not be running for reelection due to a recent, exciting change in my personal life,” Kelsey wrote on Twitter. “And I look forward to spending more time with my family.”
Kelsey initially vowed to seek a rapid trial in hopes of clearing his name, but was later granted a yearlong delay.
After arguing in favor of the state’s school voucher law in a Supreme Court challenge last year, Kelsey was notably not among the speakers when the case was reheard before the state’s highest court last month.
Tenn. lawmaker indicted on federal campaign finance charges is asking for donations
State Sen. Brian Kelsey (R-Germantown) recently got his federal trial on campaign finance charges moved until January 2023. Then he started going about the business of raising money for his re-election bid next year.
“The Liberals have found an opponent to run against me!” Kelsey says in the fundraising appeal. “This race is the number one target for Democrats in the state of Tennessee and last election we won by only 51-49%!”
Kelsey makes no mention of his legal issues in the fundraising email.
Prosecutors allege Kelsey funneled money from his state account through other political action committees to a national conservative group to spend on radio ads in support of his ill-fated 2016 congressional bid. Kelsey has denied the charges and denounced the case as a political witch hunt.
It remains to be seen how enthusiastic potential donors will be about giving money to the indicted senator, especially when campaign finance disclosures due at the end of next month will reveal who has contributed to the embattled lawmaker.
Here’s the invite to Jan. 4 the fundraiser:
Kelsey gets yearlong delay for federal campaign finance trial
State Sen. Brian Kelsey (R-Germantown) has been granted a yearlong delay before the start of his federal campaign finance trial.
Originally scheduled to begin next month, U.S. District Judge Waverly Crenshaw ordered the proceedings to be re-set for Jan. 23, 2023. The motion to delay the case was made by Kelsey’s legal team and unopposed by the U.S. attorney’s office or codefendant Josh Smith.
The attorneys for all parties met with Crenshaw behind closed doors for 45 minutes on Monday morning while Kelsey and Smith urgently whispered to each other in the courtroom that was devoid of spectators other than two reporters. Upon ending the in camera meeting, the public portion of the hearing lasted about 10 minutes to formalize the new trial date, which Crenshaw described as “firm.”
As previously reported in this week’s Tennessee Journal Kelsey attorney Paul Bruno said in a legal filing he faced a conflict with the original Jan. 18 court date because he is scheduled to go to trial in a quadruple homicide case in Nashville the following week. Bruno added the government has already provided “a significant amount of discovery” in the case and indicated more would be forthcoming. Given the volume of materials in the case, Kelsey and his legal team did not believe they had enough time to prepare for a trial next month.
Prosecutors say Kelsey funneled campaign funds from his state account through other political action committees to the American Conservative Union, the Washington-based organizer of CPAC conferences. The bulk of the money was then allegedly spent on radio ads supporting Kelsey’s unsuccessful bid for the 8th Congressional District in 2016. Kelsey has vehemently denied any wrongdoing and has claimed to be the subject of a political witch hunt.
