Auditors with the Tennessee Comptroller’s Office concluded that Hamblen County Trustee John Baskette offered an implausible explanation about why he failed to deposit $89,479 in public funds collected over a 33-day period beginning on Nov. 5, 2018, according to an investigative report published on Friday, one day after he was named in a 45-count job-related indictment.
“Baskette admitted to investigators that he withheld cash from daily collections, created new deposit slips that included only checks for deposit, and hid the undeposited cash collections in various locations in his office,” the report states. “He contended that he did not deposit the cash collections because he feared carrying large amounts of cash alone to the bank.”
Baskette’s representations with respect to his public employment run counter to his actions in his private business life, according to the report.
Investigative auditors learned that Baskette was in debt to several people for equipment sales, cattle sales and personal loans. Some of Baskette’s creditors reported the trustee requested the transactions be done in cash, and that Baskette was alone when conducting the cash transactions, according to the investigative report.
“These interviews, along with bank security photographs and video, and a review of Baskette’s personal bank activity indicate that Baskette made numerous cash transactions,” the report states. “Bank security photographs showed that Baskette made several cash transactions and show he was not fearful of carrying large amounts of cash as he previously stated to investigators.”
Richard Talley, Baskette’s defense attorney, said on Saturday afternoon that he does not dispute what Baskette reportedly told to comptroller’s office investigators and Tennessee Bureau of Investigation agents, but represented his client never had any criminal intent.
“What he said he’s probably stuck with,” said Talley, who added he’s not seen transcripts of Baskette’s interviews with law enforcement. “There have been some bad accounting practices – I’ll agree to that – but that’s a far cry from stealing money. All the money is there.”
Talley said that Baskette has been under a lot of stress recently because of health concerns and a contentious, drawn-out divorce that the attorney says was finalized “in the last 30 days.”
The audit establishes a timeline that suggests how Baskette may have been able to replace the funds he allegedly illegally withheld.
The investigation began on Dec. 13, 2018. When interviewed, Kendall Lawson, the former trustee’s office chief deputy and Baskette’s girlfriend, reported she was responsible for bank reconciliations, but had not reconciled the bank statements with the general ledger for five months, according to the report.
Over a four-day period beginning on Jan. 15, 2019, Baskette withdrew $88,520 from his personal bank accounts – $959 less than the cash missing from the trustee’s office – “just prior to depositing the missing cash from the trustee’s office on Jan. 17, 2019 and Jan. 18, 2019,” the report states.
On Feb. 4, Baskette and a female family member opened a joint checking account with a $450 check contributed by the family member. The family member subsequently obtained an $89,000 loan and placed the money in the joint checking account.
The same day, Baskette used the newly opened account to pay off three personal debts totaling $83,850, and took $5,000 for himself, according to the audit.
“The $89,450 Baskette received from his family member to pay off debts was nearly the same amount of cash he improperly withheld from the trustee’s office collections,” the audit states.
The $89,000-plus Baskette allegedly illegally withheld is about $20,000 more than cash-only deposits detailed in the indictment.
Baskette was first elected Hamblen County trustee in 2010. He was re-elected in 2014 and 2018.
District Attorney Dan Armstrong said Saturday afternoon that if Baskette failed to make deposits - within the three days required by state law – during the first nine years in office, it would have been detected by state auditors.
On Thursday, a Hamblen County grand jury indicted Baskette for theft over $60,000, two counts of official misconduct related to allegedly failing to make timely deposits, one felony count of writing a worthless check and 40 counts of allegedly not making timely deposits, a misdemeanor offense, and another misdemeanor offense, destroying public documents.
If Baskette is convicted of a job-related felony, he almost certainly will face an ouster suit. Ouster suits cannot be filed based on an indictment, according to Hamblen County Mayor Bill Brittain.
Brittain says Baskette has not been regularly coming to work at the Hamblen County Courthouse in recent weeks.
The district attorney says he knows of no state law that compels an elected official to show up at work.
Baskette is scheduled to be arraigned in Hamblen County Criminal Court on Oct. 1. Armstrong says he anticipates a trial will be set for some time in February.
Lawson, the outgoing trustee’s chief deputy, will remain on the county payroll until Aug. 23, after she finishes two weeks vacation, according to the county mayor.
The investigative report states that by June 30, Baskette, who is responsible for collecting property taxes, had not paid his own property-tax bill of $1,285. The taxes were classified as delinquent on March 1.
Baskette wrote a check for taxes on March 5. Three days later, the check was returned for insufficient funds. The check was redeposited on March 29 and returned for insufficient funds a second time on April 1.
“Baskette’s bank account was closed on April 12, 2019; therefore, the check never cleared the bank,” the audit report states.