NASHVILLE, Tenn. (AP) – Democratic state Rep. Joe Armstrong of Knoxville has been indicted on federal fraud and tax evasion charges connected to an increase in the state’s cigarette tax in 2007.
The indictment filed Tuesday in U.S. District Court alleges that Armstrong devised a scheme beginning in 2006 to profit from the cigarette tax hike planned by then-Gov. Phil Bredesen.
According to the charges, 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 in 2008.
Armstrong’s attorney, Gregory P. Isaacs, said in a statement that the 26-year lawmaker plans to plead not guilty to the charges.
FILE – In this April 14, 2015, file photo, state Rep. Joe Armstrong, D-Knoxville, attends a House floor session at the state Capitol in Nashville, Tenn. Armstrong was indicted on Tuesday, June 16, 2015, on federal fraud and tax evasion charges. Armstrong’s attorney said the lawmaker plans to plead not guilty. (AP Photo/Erik Schelzig, file) “Joe is an innocent tax payer who relied upon a tax professional as it relates to the filing of his tax returns,” Isaacs said in the statement.