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 Bradley County Arrest Report

Click  here  for the latest Bradley County arrest report. (click for more)

Red Bank Commission Makes Zoning Changes

The Red Bank Commission made zoning changes related to lot sizes for several residential properties on Tuesday night.   The request to rezone 3500 Tacoma Ave. and 215 E. Euclid Ave. from R-1 Residential to RZ-1 Residential Zero Lot Line was approved on first reading. There are two houses on the adjoining property, but in order to have the ability to sell them separately, ... (click for more)

Thankful For Tennessee

While Christmas reigns supreme as a holiday marking the birth of our Lord, I have always felt a special connection with Thanksgiving. These days Christmas unfortunately includes ubiquitous commercialism which can distract us from the true meaning of the day. Thanksgiving stands apart from all that. This day gives us an opportunity to reflect and take stock of our many blessings.  ... (click for more)

Roy Exum: Thanksgiving Eve

I don’t know who was the first to do the Famous Pregnant Turkey prank but I’ll bet you a handful of giblets there will be a lot of copycats who try it today. The trick is finding a Cornish hen that is small enough to stuff inside the larger turkey. Then you skillfully pack the bird with some of that sausage-sage dressing and put your Thanksgiving dinner in the oven. When all ... (click for more)

Davis, Volker Power Soddy-Daisy Past Hixson 53-31

Tuesday was Game 2 for Bill Eller being back on the sideline as a head basketball coach. “I was nervous as heck in the first one,” Eller said Tuesday night after his Trojans belted Hixson, 53-31, behind the potent one-two scoring punch of Josh Davis and Doug Volker. “But this is my 29 th year coaching. It’s like riding a bicycle and once the ball is tipped, it’s about the ... (click for more)

CCS Sweeps Polk Co. In Thanksgiving Round Robin

Coach Eddie Salter appears to have a pretty good basketball team at Chattanooga Christian, but he’s still looking for the right chemistry as he finds the best combination of players to put on the floor. The season is still really young and the Chargers had only played one game coming into their annual Thanksgiving Round Robin Tournament Tuesday night, but it looks like he will ... (click for more)