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Johnson City man charged with embezzling $1.1 million

Matthew Lane • Dec 10, 2019 at 8:50 AM

GREENEVILLE — A Johnson City man is facing federal charges for embezzling more than $1.1 million from his former employer, using the money for travel and dining, concerts and sporting events along with high-end purchases such as a $21,000 hot tub and Harley Davidson motorcycle.

Shain A. Chappell has been charged with wire fraud and filing a false tax return according to documents filed in U.S. District Court in Greeneville on Dec. 5. The charges stem from an embezzlement scheme Chappell devised while serving as the chief financial officer for GreenTech Environmental of Johnson City, prosecutors say.

A change of plea hearing has been scheduled for Dec. 19 and Chappell faces up to 20 years in prison and a $500,000 fine.

BACKGROUND INFORMATION

GreenTech was founded in 2009 and manufactures air purifiers, water filters, fans, heaters and surge protectors. According to the plea agreement, Chappell was hired by the company in 2015 as its controller, quickly becoming responsible for all of GreenTech’s finances, including accounting, payroll, inventory and cash management.

Prosecutors say Chappell only answered to the company president and owners.

At some time before July 2017, Chappell devised a scheme where he would use his American Express Sky Miles credit card for personal purchases and then have GreenTech pay American Express for the purchases, court records state.

Prosecutors say Chappell would hide the personal charges by reflecting the payments in GreenTech’s books and records as legitimate business inventory purchases.

HIGH END PURCHASES

According to the plea agreement, during one billing period in December 2017, Chappell embezzled more than $165,000 from GreenTech, making the following purchases:

— University of Tennessee athletic tickets: $2,400.

— Tickets through Ticketmaster in Louisiana: $2,200.

— Knoxville Symphony Orchestra: $2,530.

— Multiple jewelry purchases: $4,100.

— Sports memorabilia and apparel: $12,000.

— Charitable contributions to the UT Foundation: $23,000.

— A hot tub from a Johnson City company: $21,000.

Court records state that from July 2017 to January 2019, Chappell embezzled nearly $1.13 million from GreenTech. In addition to the wire fraud charge, prosecutors have also found Chappell did not file accurate federal income tax returns in 2017 and 2018, under-reporting his income by the amount he embezzled from GreenTech.

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