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: ALE, IAN TAYLOR 8452 EAST BRAINERD ROAD CHATTANOOGA, 37421 27 Soddy Daisy POSSESSION OF METHAMPHETAMINE ALLEN, ANDRE ANTHONY 3407 GAIL DRIVE EAST RIDGE, 37412 27 Chattanooga VIOLATION OF PROBATION (DRIVING ON REVOKED LICENSE APOLINAR, KEVIN JOSE 1313 HIXSON PIKE APT3 CHATTANOOGA, ... (click for more)

Latest Hamilton County Jail Booking Report

Here is the latest jail booking report from Hamilton County: BAGGETT, EMILY MICHELLE 14431 DAYTON PIKE SALE CREEK, 37373 22 Hamilton County PROMOTING MANUFACTURING METHAMPHETAMINE PROMOTING MANUFACTURING METHAMPHETAMINE BUTLER, NATASHA COLLEEN 816 ROANOKE AVENUE CHATTANOOGA, 37404 30 Chattanooga VANDALISM/MALICIOUS MISCHIEF CAMPBELL, CHRISTOPHER ... (click for more)

It's Time To Insure Tennessee - And Response

Tennessee has a problem.  What is the value of saving the lives of 1,000 Tennesseans each year? That is exactly what can be expected if 176,000 Tennesseans gain health insurance through Insure Tennessee. A New England Journal of Medicine study showed that expansion of Medicaid was associated with a 6% reduction in yearly mortality for people in the 34-65 age group. Statistically, ... (click for more)

Roy Exum: Boots, Idiots & Guns

As the month of February was born this morning, allow me to hurriedly share three leftovers that were still in last month’s basket: * * * A first-grade teacher had endured a long day and was helping her students bundle up for the trip home when one of the little boys asked for help getting on his boots. Soon she could see why. Even with her pulling, and him pushing, the ... (click for more)

Cleveland Wins Third Straight AAA State Duals Title Over Wilson Central

FRANKLIN – Jake Yost is batting a thousand in State Duals championship matches. Just call it a three-peat for the Cleveland Blue Raiders after Saturday night’s 35-26 win over Wilson Central here at the Williamson County Agricultural Expo Center. It was also the third straight time that the Wildcats had finished as the runner-up to Cleveland, but Saturday night’s battle was ... (click for more)

Baylor Edges Father Ryan for State Duals Wrestling Title

FRANKLIN – In an epic TSSAA D-II state duals finals which came down to the final two matches, defending champion Baylor relied on its Murderers’ Row, composed of three state champions, earlier in the match to edge Father Ryan, 32-30 for the state championship here Saturday night at the Williamson County Ag Expo Center. Trailing, 15-7 after six matches, Baylor then gained a ... (click for more)