Chattanooga City Councilman John Franklin has been indicted on federal charges of falsifying a loan document in order to launder drug money.

According to the indictment, the charges stem from March 5 when Hamilton County sheriff’s deputies pulled over a car driven by Michael Kelley. Deputies found $69,500 in cash with Mr. Kelley, the indictment says.

Staff Photo by Meghan Brown -- City Councilman John "Duke" Franklin Jr. was led in handcuffs this morning at Finley Stadium during an apparent law enforcement roundup.

The money was intended to buy cocaine, federal agents say, but Mr. Kelley told deputies the money was a loan from a friend.

Mr. Kelley then went to Perry Lawrence, who agreed to write a loan document saying he legitimately loaned the money to Mr. Kelly, the indictment says. The loan document then was taken to Mr. Franklin, who had it notarized for the date of Feb. 12, according to the indictment.

Mr. Kelley and Mr. Lawrence also are being indicted on federal charges, the indictment states.

See tomorrow’s Chattanooga Times Free Press for full coverage.