Ex-Tennessee rep pleads guilty to fraud in consulting scheme

Mar 8, 2022, 5:41 PM | Updated: 6:48 pm

NASHVILLE, Tenn. (AP) — A former Tennessee Republican lawmaker pleaded guilty Tuesday to a federal wire fraud charge over allegations she helped carry out a political consulting kickback scheme with a disgraced former state House speaker and his one-time chief of staff, even concocting a phony identity for the company’s leader.

Ex-Rep. Robin Smith entered her plea in Nashville federal court under an agreement with prosecutors. The charging document says the Hixson lawmaker, former House Speaker Glen Casada and his then-chief of staff, Cade Cothren, used a political consulting firm to illegally funnel money to themselves through both campaign and taxpayer-funded work, while concealing their involvement in it.

Casada and Cothren are described but not named in the document, which was unsealed Monday and quickly spurred Smith’s resignation as a lawmaker. So far, prosecutors have not announced any charges against the other two in the case that centers on claims about a company, Phoenix Solutions, and a fake persona, “Matthew Phoenix,” used even on an IRS form.

Smith said in a written statement that she intends to cooperate with the authorities.

“Once the Department of Justice informed me of the nature of my activities, I took full responsibility for my actions, culminating in my guilty plea,” said Smith, who did not respond to reporters’ questions while leaving court Tuesday. “There are no excuses. I intend to cooperate fully as a witness with the federal government and do whatever I can to assist the government in this regard.”

It remains unclear what agreement Smith and prosecutors might have reached on a recommended sentence. U.S. District Judge Eli Richardson said during the hearing that the maximum sentence for her crime was 20 years in prison. But he also noted that Smith’s plea deal includes stipulations about cooperation, without saying what those entail. Her sentencing was set for October.

Prosecutors said in charging documents that Smith “devised and intended to devise a scheme and artifice to defraud and deprive the citizens of the Middle District of Tennessee and the government of Tennessee of their right to the honest services of a public official.”

Casada resigned from the top leadership post in 2019 after revelations he exchanged sexually explicit text messages about women with Cothren years ago. In January 2021, FBI agents searched the homes and offices of several state lawmakers and staffers, including Casada, Smith and Cothren. At the time, federal investigators declined to give a reason for the searches.

The charge against Smith appears to shed some light on the raid. The documents state Cothren launched a political consulting firm called Phoenix Solutions, LLC that was designed to offer mail and consulting services to lawmakers in 2019 with Smith’s and Casada’s “knowledge and support.” All three claimed the firm was run by “Matthew Phoenix” when in fact it was Cothren using a made-up alias, the documents allege.

Authorities say Phoenix Solutions was initially set up to provide mail and consulting political services for lawmakers facing primary election opponents. It performed those services and later sent taxpayer-funded mailings to constituents, from which Phoenix Solutions, a separate company owned by Smith, and another company owned by Casada received almost $52,000 combined in 2020, the documents state.

Smith, Cothren and Casada hid Cothren’s involvement in Phoenix Solutions, and hid that Cothren “kicked back” portions of the profits to Casada and Smith, because they feared the House speaker’s office would not approve the company’s use and individual lawmakers would not use the firm, either, if that information got out, prosecutors claim.

In 2020, Cothren’s then-girlfriend and Cothren exchanged emails as “Candice” and “Matthew” to make it appear as though Phoenix Solutions employees needed to secure an outstanding payment that the state hadn’t paid, authorities said. That exchange was forwarded to Smith. The girlfriend was not identified.

According to prosecutors, Smith told multiple Republican lawmakers in 2020 that “Matthew Phoenix and his associate, Candice, got tired of living in the Washington, D.C. area and decided to move back home to New Mexico, where Phoenix started Phoenix Solutions.”

At one point, the documents allege Smith emailed Cothren saying that he “may have to assume the role of Matthew again.” He replied saying, “Matthew, reporting for duty!” and included a GIF of “a salute from Harrison Ford’s character Han Solo in the movie Star Wars,” officials said.

Officials also say Smith provided false information on Matthew Phoenix to current House Speaker Cameron Sexton and other legislative staffers when pushing for payments to Phoenix.

When Smith forwarded those messages to Cothren, she wrote “Shhhhhhhhhh,” according to court records.

Smith, 58, was elected to the House of Representatives in 2018. She’d previously served as chair of the Tennessee Republican Party and a policy advisor to Republican U.S. Rep. Mark Green.

Casada in November announced he wouldn’t run for reelection this year, and would instead run for Williamson County clerk.

Cothren, meanwhile, has informed state campaign finance regulators that he is invoking his Fifth Amendment right against self-incrimination and won’t abide by a subpoena in an investigation surrounding a political action committee.

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Ex-Tennessee rep pleads guilty to fraud in consulting scheme