Hawkins County commissioner, former Surgoinsville mayor, accused of theft and money laundering

Jeff Bobo • Oct 20, 2008 at 12:00 AM

SURGOINSVILLE — An investigative report released Monday by the office of the Tennessee Comptroller of the Treasury accuses former Surgoinsville Mayor Hanes Cooper of misappropriating more than $65,000 since 1998 in his capacity as a commissioner on the Surgoinsville Water Utility.

Cooper was mayor of Surgoinsville most recently from 2002 to 2006 but had previously served on the Surgoinsville Board of Mayor and Aldermen for nearly four decades as either mayor or alderman. He is also a sitting member of the Hawkins County Commission in his second term representing District 4, and he has served on the County Commission in the past as well.

But Cooper’s position as a longtime commissioner of the Surgoinsville Water Utility is not related to the elected offices he holds or has held in the past.

The comptroller’s investigative report alleges that between April 1, 1998, and Oct. 31, 2003, Cooper received payments from the Surgoinsville Water Utility “in excess of his lawful compensation” totaling $30,310.

“Sometime in late 2003 a customer of the utility district apparently questioned district personnel regarding Mr. Cooper’s excess compensation,” the report states. “Subsequent to the customer’s inquiries, Mr. Cooper apparently directed that future payments be made to his daughter, Robin Hoffman.”

The comptroller’s investigative report alleges that between Jan. 1, 2004, and Dec. 31, 2007, Hoffman received payments totaling $35,215.

The report further alleges that although Hoffman signed time sheets, the investigation revealed that she allegedly only worked for the water utility on rare occasions, and “certainly not with the frequency indicated by her monthly time sheets.”

Hoffman is also employed at the Surgoinsville Post Office, and the comptroller’s report alleges that her time sheets from that job contradict hours claimed on her utility district time sheets.

But the allegation is that Hoffman only benefited from the scheme to the extent that she received health benefits and Social Security credit.

“Ms. Hoffman endorsed the backs of district checks issued to her, cashing most and turning others over to her father for his endorsement and deposit, or to be cashed by him,” the report alleges. “It appears that in order to conceal the continued unlawful payments, Mr. Cooper devised and directed a scheme by which fraudulent payroll payments were made to his daughter so that she could pass the proceeds on to Mr. Cooper.”

The comptroller’s report alleges that Cooper received a total of $65,525 in excess compensation.

Although Cooper is not currently charged with a crime, 3rd Judicial District Attorney General Berkeley Bell told the Times-News Monday that the allegations could potentially result in criminal charges.

Bell said he anticipates that the evidence will be presented to an upcoming Hawkins County grand jury. The grand jury next meets on Dec. 8.

Bell added, however, that a prosecutor from comptroller’s office would likely come in to prosecute Cooper’s case due to their expertise in dealing with such matters.

“We are consulting with (comptroller attorney) Chad Jackson and the comptroller’s office about them actually pursuing any charges that might be brought,” Bell said. “I have not fully reviewed the matter myself, but in my discussions with Mr. Jackson we have discussed (criminal charges of) money laundering and official misconduct. As I understand it, the matter will be presented to a Hawkins County grand jury in the near future for their determination as to what charges, if any, should be brought.

“Then, of course, if the grand jury returns an indictment against him, any arrest would occur after that.”

The money laundering charge is the more serious of the two. It’s a Class B felony and carries a penalty of eight to 12 years in prison if convicted. A conviction would also likely result in restitution being ordered, Bell noted.

Jackson, who is staff attorney for the Tennessee Comptroller of the Treasury, said the investigation began in Surgoinsville City Hall on July 31, 2007, and based on things that were uncovered at City Hall, the investigation moved to the Surgoinsville Water Utility on Jan. 15, 2008.

The Surgoinsville Water Utility operates independently of the town.

Jackson said he is ready to present evidence against Cooper to the grand jury, but he would not comment whether Hoffman will be facing a grand jury inquiry.

Numerous attempts to contact Cooper via his cell phone, home phone and office phone at the Surgoinsville Water Utility were unsuccessful. Staff at the water utility told the Times-News that Cooper had been “in and out” of the office Monday.

The Surgoinsville Water Utility Board of Commissioners met in closed session Monday evening with its attorney, Crystal Goan, to discuss the comptroller’s report. Goan told the Times-News prior to that meeting that the water commission would likely seek a “second opinion” before taking any action.

“The only official statement I can give right now is that we’ve been working diligently with the comptroller’s office,” Goan said. “We’ve not had problems like this in the past. We complete a self-audit, and we’ve never had a problem arise or have anyone question this, so what we may do is get our own independent auditor to come in and review the (comptroller’s) findings.

“I don’t expect Mr. Cooper’s status on the commission to change tonight because he hasn’t been formally charged.”

Cooper is also a candidate for Surgoinsville alderman on the Nov. 4 ballot.

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