KNOXVILLE (WATE) – Former Knox County Trustee Mike Lowe and four others who worked for or had connections to the county are charged with felony theft.
The Knox County Grand Jury handed up four presentments against the five on Thursday afternoon.
Lowe and Ray M. Mubarak are each charged with four counts of theft of property more than $60,000. In two of the counts, the alleged theft involved fake payments to Ray M. Mubarak. The other two counts involved fake payments to Tennessee Residential Services.
According to sources in the trustee’s office, between 2007 and 2008 Knox County contracted with Tennessee Residential Services, which Mubarak owned, for title work on tax sale property.
There was $392,500 total in billing to Tennessee Residential Services. The largest single check was for $68,500 on July 16, 2007. Two other checks in January and February 2008 were for $64,000 and $67,000.
A source says Mubarak was a ghost employee. Investigators believe someone wrote checks from the trustee’s office to Tennessee Residential Service, but the money was pocketed by someone connected to this case.
Delbert E. Morgan and Lowe are charged with two counts of theft of property more than $60,000.
John M. Haun, the former operations manager for the trustee’s office, is charged with two counts of theft of property more than $60,000.
Rhonda Jan Thomas is charged with two counts of theft of property between $10,000 and $60,000.
The charges follow an investigation by the Tennessee Bureau of Investigation, the state Comptroller’s Office and the Knox County District Attorney’s Office. TBI began investigating in February 2009.
The grand jury also recommended moving the trustee’s office and its functions into the mayor’s office, with spending and contracts to be handled through the finance department. The recommendation included county commission oversight. Commission Chairman Mike Hammond says commission should have approval of the trustee’s office budget.
“If they need more money, they come back before commission and explain why. When they come before commission, they’re basically coming before the public and explain why public taxpayer dollars need to be spent,” said Hammond.
Plus, the grand jury suggested audits for the trustee’s office to identify waste, fraud and abuse and staff evaluations with pay based on work and experience.
Lowe served as trustee from 1994 until January 2007, when the Tennessee Supreme Court ruled to enforce term limits, which removed him from office.
Then Lowe worked for the appointed county trustee, Fred Sisk, until February 2008 when he resigned to go into real estate development.
Lowe’s attorney, Greg Isaacs, released a statement Thursday that says in part, “Our firm’s preliminary investigation, which has paralleled the grand jury’s investigation, corroborates Mike Lowe’s innocence.”
Knox County Mayor Tim Burchett also released a statement, saying, “News of these indictments is certainly troubling, but I think it is important to let the judicial process work. My focus remains on doing the best job possible for Knox County residents.”
Lowe and Mubarak turned themselves in Thursday and were released on $5,000 bonds. Haun and Morgan were released on own their own recognizance.
Thomas turned herself in Friday morning.