NASHVILLE, Tenn. (AP) — A federal grand jury has indicted Democratic state Rep. Joe Armstrong of Knoxville on fraud and tax evasion charges.
The indictment filed Tuesday in U.S. District Court alleges that Armstrong devised a scheme beginning in 2006 to profit from an anticipated increase in the state’s cigarette tax planned by then-Gov. Phil Bredesen.
According to the indictment, Armstrong bought tax stamps at the old 20-cent rate, and then sold them at a profit after lawmakers voted to increase the tax to 62 cents per pack. The lawsuit says Armstrong failed to report more than $318,000 in income from the scheme.
Armstrong’s attorney, Gregory P. Isaacs, said in a statement that the 26-year lawmaker plans to plead not guilty to the charges.
