JOHNSON CITY - A longtime employee with the city of Johnson City was arrested Tuesday night following a state and local investigation into alleged illegal activities.
The Tennessee Bureau of Investigation, with the assistance of the Johnson City Police Department, arrested Danny Lynn Davis, 54, on charges of money laundering, theft over $10,000, forgery and official misconduct.
Authorities allege Davis, an employee with the city's Department of Community and Economic Development, illegally obtained benefits from his position by bidding on jobs through a nonexistent company.
"He was over the bid process and would review all bids that came in," said 1st Judicial District Attorney General Tony Clark. "He had a fake, dummy corporation called Gray Home Improvements. Gray Home Improvements would actually make a bid and, of course, it would win because he knew what the other bids were."
When submitting bids for Gray Home Improvements, Davis signed documents with the name "D.L. Neal" to deflect any suspicion, according to reports.
Once the fake company won a bid, Davis then would hire subcontractors at an even lower cost to do the work, authorities said.
"He would pay these people with either a cashier's check or an actual check from Gray Home Improvements," Clark said. "Then he would pocket the remaining money the city paid for the project."
Following Davis' arrest, authorities issued a search warrant on both his office and home.
"We have volumes and volumes of documents to go through," Clark said. "At this point we have no idea how long this has been going on.
"Over just the last year or so we found in the neighborhood of 30-some contracts connected to Gray Home Improvements. They are comparing those with contracts actually filed at the city."
The projects Davis is suspected to have bid on were not complete remodeling or construction projects, but instead smaller projects such as installing electrical wiring or plumbing in a building, Clark said.
Davis has just fewer than 30 years of service with the city. He had been working at the Department of Community and Economic Development since the early 1990s, authorities said.
According to City Manager Pete Peterson, Davis would have been able to retire from the city next year.
"Based on the TBI's investigation, we have terminated Mr. Davis' employment," Peterson said.
The investigation, which started last week, is ongoing and more charges are likely, Clark said.
Davis, 1915 Woodland Ave., was being held in the Washington County Detention Center on $25,000 bond.
A court appearance is pending in sessions court.