FBI Agent Testifying At Fraud Case Sentencing Says Current Dade County Magistrate Was Tied In With Dobsons; Prosecutor Says Gott Should Get 78-97 Months

Wednesday, May 21, 2014

An FBI agent testifying Wednesday at a sentencing in the Southern Group fraud case said current Dade County Chief Magistrate Joel E. McCormick was tied in with the firm.

Agt. Stan Ruffin said McCormick was instrumental in selling Lookout Mountain property near Rising Fawn, Ga., from Eugene Johnson to the Dobson family, which began to develop it under the name The Preserve.

He said McCormick was also listed among the officers of the Southern Group in connection with a $1.25 million loan the group took out. He said McCormick made some payments toward repaying that loan.

Under questioning about alleged "conflicts of interest" the current magistrate had at Southern Group, the agent said McCormick appraised some of the lots at The Preserve.

Prosecutor Perry Piper asked, "Aren't such appraisals suppose to be at arm's length?"

Agt. Ruffin replied, "Absolutely. He was a business partner and he was doing appraisals on the early lots."

The testimony was during the continuation of a lengthy sentencing hearing conducted by Judge Curtis Collier for Josh Dobson and Paul Gott.   

Prosecutors said the total amount of the loss in the land fraud was $40 million.

The loss amount in the case for sentencing consideration has been limited to 108 cases in which the government said the Southern Group made down payments for buyers. That amount is around $13 million.

The government has reduced the loss amount for sentencing to $11.8 million after the defense raised certain objections, including the fact that much of the land has been transferred to the Georgia Land Trust.

Agt. Ruffin said the Southern Group not only made down payments for "buyers," but also paid some of their mortgage payments. He said, "The fraud began to unravel when they stopped making some of the mortgage payments."

He said that caused officials of Cornerstone Bank to begin asking questions about how the deals were structured.

Agt. Ruffin was the final witness for the government at the sentencing, then arguments began before the judge.

Prosecutor Piper said the sentencing range for Gott, who was involved in setting up financing for the deals, should be 78-97 months.

Attorney John McDougal sought a lesser sentence, saying Gott was not part of Southern Group. He said the "plan was devised by Josh and Tommy Dobson, Travis Shields and their attorney." Tommy Dobson and Shields have not been charged.

A sentencing range for Dobson will be taken up when the case reconvenes.

Prosecutor Piper said, "This was a scam from the start. They were bilking the banks out of tens of millions of dollars. All that money was going into Southern's pockets."

He said the deal that Southern had with Eugene Johnson was that they would purchase the land piece by piece as they made sales. He said, "Their risk was truly minimal. The only risk they had was were they are sitting today - before someone wearing a black robe."  


Latest Hamilton County Jail Booking Report

Here is the latest jail booking report from Hamilton County: AIRKS, JESSICA  711 WOODVALE AVE CHATTANOOGA, 37411  Age at Arrest: 28 years old Arresting Agency: Hamilton County Booked for Previous Charges or Other Reason(s) --- ANDERSON, SHEA AMBER  4103 DAYTON BLVD APTC37 CHATTANOOGA, 37415  Age at Arrest: 24 years old Arresting Agency: Chattanooga ... (click for more)

Chattanooga Man Arrested For Aggravated Robbery On 5th Ave.

Toriq Quinn Johnson, Jr. was arrested for aggravated robbery on Thursday.. Police were notified of a robbery that occurred on 4010 5 th Ave. on Wednesday. They spoke with Christopher Worley, who said that earlier that day he was in front of his residence when Johnson drove up and asked him if he wanted to buy some pills. He said he told Johnson no and Johnson drove off. ... (click for more)

Jill Levine Is An Educational Rock Star

No one has covered the Hamilton County Department of Education drama better than Roy Exum.  Thank you, Roy, but I take issue with your unnamed sources.  Professional jealousy and sour grape darts should not be anonymous.   HCDE is so dysfunctional, and there is good cause to place this public organization under a microscope, dissect it into pieces and discard all ... (click for more)

Roy Exum: Settle It With A Vote

The Merriam-Webster Dictionary, which I consider a pretty good authority on what words really mean, defines “freedom” in this way:  “The quality or state of being free: such as, (a) the absence of necessity, coercion, or constraint in choice or action; (b) liberation from slavery or restraint or from the power of another; (c) independence -- the quality or state of being exempt ... (click for more)

Shoulders, Hester Lead CSAS Past Lookout Valley, 10-7

Most of the regular-season district softball games are in the book and teams are trying to sharpen their skills as they prepare for the post-season in hopes of landing in Murfreesboro for the season-ending TSSAA state tournament the week before Memorial Day. Such is the case for the Red Bank Lionettes, who are hosting the 2016 Red Bank Invitational this weekend at the Red Bank ... (click for more)

McMasters Makes Tough Call To Play Volleyball At Lee

Grace Baptist Academy two-sport standout Claire McMasters envisioned playing basketball and volleyball at a small college after her career ended with the Lady Golden Eagles. So, she “looked at” Covenant College and Maryville College as two schools where she thought that would be possible to extend her two-sport status. McMasters’ recruiting shifted quickly once Lee University ... (click for more)