Knoxville leader named co-conspirator in cigarette tax fraud scheme

KNOXVILLE (WATE) – One of the longest serving members of the Knox County School Board and a long time member of Knoxville’s government has been named an unindicted co-conspirator in a tax fraud scheme involving State Representative Joe Armstrong.

Sam Anderson’s attorney, Boe Reed,  said his client had business dealing with Joe Armstrong and received a subpoena to testify before a grand jury. “Mr. Anderson was served a federal grand jury subpoena and testified truthfully,” said Reed. “He does not expect to be indicted or face any charges.”

Friday, in U.S. District Court Armstrong plead not guilty on all three charges involving conspiracy, tax evasion and fraud. Officials said Armstrong profited from a vote on hiking the cigarette tax in 2007 by purchasing tax stamps before the increase and avoided the payment of federal income taxes.

Previous story: Tenn. State Rep. Joe Armstrong pleads not guilty to tax fraud scheme

Reed said the subpoena happened a couple weeks before the indictment against Armstrong came down. Armstrong has been released until his trial, which is set for Aug. 25. A pre-trial is set for Aug. 6 at 10 a.m.

Anderson resigned from his part-time position with Knox County Schools Tuesday, according to an email Director of Schools Dr. Jim McIntyre sent to school board members. Anderson told McIntyre that while he believes he has not been involved in any wrongdoing, he did not want to be a distraction to the work of the school system.

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