Tenn. Secretary of State: Business owned by Rep. Joe Armstrong faces dissolution

Rep. Joe Armstrong D-Knoxville District 15 — Part of Knox County

KNOXVILLE (WATE) – Documents obtained from the Tennessee Secretary of State’s office show a limited liability company owned by State Rep. Joe Armstrong faces dissolution for not filing annual reports on time.

The documents indicate Arm & Rage, LLC has not filed its annual report on time for the past three years. The company holds the FCC license for Armstrong’s AM radio station WJBE.

Web Extra: Read the Documents [PDF]

Secretary of State Tre Hargett’s office told WATE 6 On Your Side over the phone that Armstrong has until August 2 to file the report of his business will be dissolved.

Armstrong was indicted earlier this week on charges he, his CPA and another unindicted co-conspirator cooked up a tax scheme that helped them rake in over $700,000.

Previous story: Tenn. State Rep. Joe Armstrong indicted in alleged tax fraud scheme

Armstrong campaigned and voted for a hefty increase on the cigarette tax rate in 2006, helping to push it through. According to a federal indictment, he got a loan for $250,000 to buy 42 rolls of the cigarette tax stamps at the pre-hike rate, knowing it was about to be raised more than three times that rate. He then allegedly used a wholesale tobacco business to sell them at the new rate.

The indictment says his CPA, Charles Stivers, who has admitted to the scheme, funneled the revenue from the wholesaler, to a bank and then to Armstrong to hide the source of the profit.

Stivers stepped down from the board of directors of Miller Energy Thursday.

A plea agreement from April shows Armstrong got almost $500,000 from the scheme and he and Stivers agreed the CPA would get a 15 percent cut of the profits. A co-conspirator also got some of the check. When Stivers filed Armstrong’s tax return, the income from the scheme wasn’t accounted for. Stivers says Armstrong told him to leave it off, saying, “If I can get by with all of this, that would be great.”

The charges say Rep. Armstrong owed the IRS more than $100,000 more than he claimed.

Local democratic leaders who have known Rep. Armstrong for years said they’re shocked by the allegations.

“I’ve known Joe for over 10 years and he’s been nothing but honest and ethical in dealings with me and other people in the area,” said Knoxville Democratic Party Chair, Cameron Brooks.

Former Knox County Commissioner Diane Jordan worked with Rep. Armstrong politically for years and said, “It’s just out of character and not the person that I know,”

She said while the indictment puts a cloud over the entire democratic party, it’s still too soon to start looking at candidates to replace the representative.

Brooks said if Rep. Armstrong is found guilty, there will be many saying he needs to step down.

“I mean I think you could talk to 100 percent of people who would say that would be a situation where he would have to step down,” he said. “But again, he’s innocent until proven guilty.

“He’s nationally known as a leader among black legislators. It’ll be a big loss if somehow he is convicted; we’ll be reeling from it for awhile.”

Rep. Armstrong said he’s looking forward to the truth about the federal charges coming out in the very near future. He will be in federal court Friday morning, and his attorney, Greg Isaacs, said he will plead not guilty.

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