In a trial that began in early August, 2016, Tennessee State Representative Joe Armstrong is being tried for tax evasion stemming from not disclosing a gain of $300,000 on his 2007 tax returns.
Prosecutors claim that Armstrong conspired with his accountant to hide proceeds from a scheme involving cigarette tax stamps. In 2007, Armstrong purchased $250,000 of cigarette tax stamps just before the state legislature tripled the tax, only to resell them for a big profit.
Assistant U.S. Attorney argued in court that “Mr. Armstrong was motivated from the very start to hide this money. He said from the very beginning, ‘No one can know about this. I can’t be seen to profit from Big Tobacco’ – his words.”
Armstrong took the stand to blame his accountant for the failure to pay taxes on more than $300,000 return on the cigarette tax stamp investment. His accountant pleaded guilty to federal charges and testified against Armstrong at his trial.
The jury found Armstrong guilty to one felony conviction for filing a false tax return. He faces a maximum of three years in prison and could also be fined as much as $250,000 in restitution. Sentencing is November 2016. His felony conviction also disqualifies him from serving in the Legislature.
