Rhea County Executive George Thacker agreed this week to plead guilty to a charge of felony wire fraud related to the unlawful receipt of more than $500,000 in federal coronavirus aid.
The federal charge could carry as much as 20 years in federal prison and the county executive will resign his post by the time he makes the plea final, his attorney said Friday.
According to federal court documents filed Thursday in federal court in Chattanooga, Thacker, as owner of locally-based Thacker Corporation, agreed Wednesday to enter a guilty plea to one count of wire fraud related to his obtaining two Paycheck Protection Program, or "PPP" loans, through the Small Business Administration, and an Economic Injury Disaster Loan (EIDL), all totaling $665,600.
Thacker devised a scheme to defraud and to obtain money and property by means of materially false and fraudulent pretenses, representations and promises concerning the receipt and use of the loan funding he used to invest in cryptocurrency, the plea agreement states.
(READ MORE: Two men get prison sentences in Rhea County child sex abuse cases)
Officials with the U.S. Attorney's Office declined to comment on the case when contacted Friday by phone.
Thacker did not respond to requests for comment Friday, but his attorney, Lee Davis, said Thacker would have another hearing to officially plead guilty to one count of wire fraud before Magistrate Judge Christopher Steger.
The hearing should happen by the end of the month, he said.
"I think it's important to point out that this relates to George Thacker's businesses and does not in any way relate to Rhea County as the county executive or any Rhea County funds," Davis said Friday in a telephone interview. "Once Mr. Thacker was approached by the government with these improprieties, he has cooperated fully with the Secret Service and the U.S. Attorney's Office in this investigation.
"It is expected he will resign his position with Rhea County on or before the court date," he said. Thacker first took office in 2010.
The Chattanooga federal court's docket calendar on Friday did not reflect a hearing date for Thacker.
In 2020, Thacker sought and received a PPP loan of $257,800 on May 4 and a $150,000 EIDL loan from the business administration on May 16, the agreement states. On Feb. 5, 2021, he sought and received another PPP loan for $257,800. Thacker made representations in acquiring the loans that the money would be used to further the operations of Thacker Corporation in the wake of the pandemic, according to the agreement.
But after receiving the loans, Thacker transferred the funds to his personal checking account. the agreement states. Thacker transferred PPP and EIDL loan funds into a personal investment account he maintained with E*trade, an online investment company, and also transferred more than $200,000 of loan money to a personal account maintained with Coinbase Inc., an online cryptocurrency exchange platform.
Thacker used the money in the account to purchase Bitcoin, Ether and other cryptocurrency, the agreement states, and he admits in the document he used interstate wire communications in the scheme.
The Cares Act was a federal law enacted in March 2020 to provide emergency financial assistance to people who were suffering economic impacts of the COVID-19 pandemic, according the the agreement. One source of Cares Act relief was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and other expenses defined under the program aimed at protecting workers' paychecks. In April 2020, Congress authorized more than $300 billion in additional PPP funding.
The EIDL program was an SBA program under the Cares Act that provided low-interest loans to small businesses, renters and homeowners in response to the impact of the pandemic, the agreement states. The program provided loans of up to $2 million to eligible small businesses suffering financial hardships from the pandemic.
It's not Thacker's first brush with the law. In 2011, Thacker was cited in Knoxville with patronizing a prostitute in an undercover police sting. He received judicial diversion in the case two weeks after he was charged.
As part of the agreement, Thacker will be required to repay the funds and to also cooperate to return to the government any property the money was used to purchase.
Contact Ben Benton at bbenton@timesfreepress.com or 423-757-6569. Follow him on Twitter @BenBenton.