Robert F. Arnold, 40, the suspended Sheriff of Rutherford County, pleaded guilty today to federal charges of fraud and corruption.
Arnold was indicted in May 2016 along with his former Chief Administrative Deputy, Joe L. Russell II, 49, and Arnold’s uncle, John Vanderveer, 58, of Marietta, Georgia, for their roles in the formation and operation of JailCigs, LLC. The indictment alleged that the defendants enriched themselves by selling electronic cigarettes, through JailCigs, LLC, to inmates at the Rutherford County jail, while concealing and misrepresenting Arnold and Russell’s ownership of the business, and paying Arnold commission payments that were in fact owed to Rutherford County.
In the hearing before Chief U.S. District Judge Kevin H. Sharp, Arnold admitted to forming JailCigs with Russell and Vanderveer in 2013; admitted that he used his official position as Sheriff of Rutherford County to benefit JailCigs by allowing its products to come into the Rutherford County jail and be distributed by county employees; admitted to taking steps to disguise his involvement in the company; admitted to misrepresenting the benefits that Rutherford County was supposedly receiving; admitted that he personally received over $66,000 from JailCigs; and admitted that he lied about his income from, and knowledge of, the company when he was confronted by local media in April 2015.
Arnold pleaded guilty to wire fraud, honest services fraud, and extortion under color of official right. Each of the crimes of conviction carries a maximum of up to 20 years in prison. Under the terms of the plea agreement, Arnold agrees to pay restitution in the amount of $52,500 to Rutherford County. The plea agreement does not contain any agreement between the parties as to what the appropriate sentence should be.
