The Avenue

Jim Cope Pleads Guilty to Insider Trading; Randy Garrett Takes Control of RCSO While Sheriff is in Jail

If treachery were a competition, Rutherford County would win a blue ribbon at the Tennessee State Fair.

We’re one of the fastest-growing counties this side of the Mississippi, full of promise, with MTSU a great resource and swimming in all sorts of happy and fluffy news. At the same time, two of the most powerful people in the county are in trouble with the feds.

One, as is well-documented, is Sheriff Robert Arnold, who is being held in a Kentucky jail after a magistrate revoked his $250,000 bond on federal corruption charges. The other is former County Attorney Jim Cope, a highly-respected Murfreesboro attorney who pleaded guilty in federal court recently to insider trading charges.

Cope resigned as a board director at Nashville-based Pinnacle Financial Partners in April shortly before the bank reported one of its directors might have violated an insider trading policy amid talks for the acquisition of Avenue Bank.

The U.S. Attorney’s Office, which allowed Cope to enter a plea to its criminal charge, and the Securities Exchange Commission, which filed a separate civil complaint against Cope, both say he had “ill-gotten” gains of $56,000. The SEC claims he even bought Avenue stock during a Jan. 5 bank board meeting while Pinnacle’s CEO was telling board members they were set to acquire Avenue. More purchases came later, according to the SEC’s complaint.

In his only public statement, Cope said he had poor timing.

Shortly afterward, the Board of Professional Responsibility, which oversees the state’s attorneys, suspended his license. He faces a hearing to determine his ultimate discipline, which could be a lengthy suspension or even disbarment, according to a board spokeswoman.

Remember, Cope has been advising the Rutherford County Commission since November 1983. He also was the attorney for the town of Smyrna (before it hired in-house counsel), Consolidated Utility District, Middle Tennessee Electric Membership Corp., the Smyrna/Rutherford Airport Authority and, until 2003, The Daily News Journal. And those are just the big names.

For decades, if Cope said it, you pretty much believed it. Or, at least, you felt pretty good with him representing you in court.

That’s why it’s just a little hard to fathom how someone so well-versed in the law could find himself on the wrong side of it.

With the contract of Rutherford County alone, he was making well more than $72,000, in addition to retirement and health insurance benefits (apparently, he gets to keep his retirement). Put together his contracts with the utilities and other government entities over the years, in addition to his Pinnacle banking compensation and whatever money his family might have had, and it’s pretty clear he’s not choosing between liver cheese and bologna for supper.

As part of Cope’s plea agreement with the feds, he must pay a $55,000 fine, more or less returning the “ill-gotten gains,” and go on probation for two years. The pending punishment could be even stiffer from the SEC, which does not smile on powerful attorneys who plead guilty to insider trading.

For the first nine months of his probation, under the plea agreement, he is to be confined to his house. Well, considering his three-year-old Georgetown Lane mansion just off Stones River Country Club golf course could hold about four or five regular houses, at least he’ll have plenty of room for exercise.

But no matter what the feds do to Cope, it won’t be worse than the loss of respect he faces in Murfreesboro and Rutherford County. It’s just hard to explain away a guilty plea to federal insider trading. This is a man who had it all, or seemed to anyway. And now it’s vanishing.

RCSO Chief Deputy Randy Garrett

RCSO Chief Deputy Randy Garrett

Who’s in Charge Here?
With Sheriff Arnold jailed on a bond revocation, Chief Deputy Randy Garrett is presumably running the show at the sheriff’s office.

He got a rude welcome, though, from one county commissioner during a recent Public Safety Committee meeting.

Shortly after Garrett, a former high-ranking officer with Murfreesboro Police, assured commissioners Rutherford County is still receiving a high level of professional law enforcement service based on the oath they took to uphold the laws of the state of Tennessee and the U.S. Constitution (ad nauseam), commissioner Joe Gourley got in his grill.

Gourley pointed out that Garrett, despite speaking about upholding the laws of the state and nation, had witnessed and signed Arnold’s state ethics disclosure form in January 2015, which showed he had an investment in and received funds from JailCigs. That’s the company Arnold, Chief Administrative Deputy Joe Russell and Arnold’s uncle, John Vanderveer, are accused of using to sell e-cigs to county jail inmates and make a handsome profit without giving the county a cut of the proceeds—and then trying to cover it up.

“You had to know that JailCigs were being sold in the jail,” Gourley said to Garrett in the committee’s meeting room.

“No sir, I did not know JailCigs were being sold in the jail. But commissioner, let me do this. I’m not gonna get off into the weeds of the sheriff’s issues. I’m just here tonight to reassure you and the rest of the public that we’re here to provide a high level of professional law enforcement services to this county. Whatever the sheriff’s issues are, they will play out,” Garrett responded.

Said Gourley, though, “What I’m saying is you had knowledge of this. I mean you signed it as a witness.”

“I did,” Garrett said. “But all those issues will be handled at a later date.”

“Well that doesn’t reassure me, and that doesn’t reassure the public, I don’t think,” Gourley said.

Garrett responded, “Well, I’m here to tell you that we’re here to do our best and we can respectfully disagree.”

Agreeing to disagree is probably the best response Garrett could come up with at that point, because anyone paying attention to this situation could find a litany of problems with his potential culpability.

First, if he signed the disclosure statement, understood it and knew JailCigs was operating at the jail, that’s a red herring, one that could put him under the watchful eye of the U.S. Attorney’s Office, which could compel him to testify in Arnold’s Feb. 7, 2017 trial.

Second, if he is the chief deputy and second in command at the sheriff’s office and didn’t know JailCigs was operating as a vendor at the jail, people would have to question his administrative abilities. After all, jailers were distributing e-cigs to inmates, picking them up, overseeing the program, more or less, while Russell was making sure orders came and went out properly—all on county time, according to email records and other documents from the sheriff’s office.

In fact, one of the first things an inmate received when checking into the jail was a sheet of paper notifying them how to purchase JailCigs products and abide by the rules.

A good question for Garrett (and it wouldn’t be surprising to see him called to testify by federal prosecutors): What did you know, and when did you know it?

If Garrett thinks he can skate past Gourley’s questions, he should recall the whistleblower lawsuit filed by former Deputy Chief Virgil Gammon, because it brings him into the equation. Gammon, who was fired by Arnold and then received a $340,000 lawsuit settlement from the county, started digging into JailCigs’ operations, meeting with the state Comptroller’s Office, checking with the County Technical Assistance Service to verify vendor laws and reporting suspicious activity to Terry Ashe, director of the Tennessee Sheriffs Association, according to legal documents.

Gammon confronted Arnold about the matter but was told, “Don’t worry about it, Chief Russell has it all figured out,” according to the lawsuit. He also met with Russell, who told him it was “no big deal” and that he would keep selling e-cigarettes regardless of what Gammon did. Gammon then met with Garrett, who told him he would discuss his concerns with Arnold. Garrett later told Gammon the sheriff was OK with the situation and said Russell verified nothing improper was being done with vendors, including JailCigs, the lawsuit says.

If Garrett couldn’t piece this puzzle together, it’s a good thing he isn’t overseeing the detectives division.

He knew about the JailCigs because he signed Arnold’s disclosure form. Gammon told him about JailCigs, and he supposedly talked to Arnold and Russell about it. But he never took any action to alert the county mayor, the sheriffs association or the dog catcher about the possibility Arnold might be making money on a side business at the sheriff’s office.

If anyone believes he had no inkling about JailCigs’ alleged connection to Arnold, I’ve got some prime ocean-front property in Leanna they can buy at an unbelievable price. If he really did have no idea, then he shouldn’t be chief deputy.

More Absurdity
Sheriff Arnold was to have a hearing in federal court to have his bond unrevoked. He wants out of jail. But he might have hurt his own cause.

Recorded phone calls show him blaming his wife for his jail time and telling her to do whatever it takes to get him out of jail. He even told her he was going to write her out of his will.

Other recorded phone calls she had with her boyfriend in which she describes a Labor Day struggle with Arnold after he’d been drinking and taken a sleeping pill were used to corroborate statements she made to TBI investigators in federal court before the magistrate revoked Arnold’s bond.

Certainly, Arnold is at wit’s end because he’s in jail. People aren’t supposed to be happy there. But as a sheriff whose jail personnel record every phone call inmates make, and charge them for it as well, he should know jail phone calls are recorded. This situation seems to be full of instances in which people should have known something but didn’t.

We’ll let you know next month whether the sheriff earns a “get out of jail free” card. Oops, it ain’t free. He’s paying his attorney a pretty penny.

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About the Author

Sam Stockard can be reached at sstockard44@gmail.com

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