Tenn. Sheriff Faces Charges Over Jail E-Cigs

MURFREESBORO, Tenn. (CN) — A Tennessee sheriff, his uncle and an administrative deputy were indicted on federal corruption charges for their role in a company that sells e-cigarettes to inmates.

Rutherford County, Tenn., Sheriff Robert Arnold, 40, and two others were indicted Thursday by a federal grand jury on charges of honest services fraud, mail fraud, wire fraud, bribery, extortion, obstruction of justice and conspiracy. The charges were announced Friday morning.

Arnold, his uncle John Vanderveer, 58, and Joe Russell II, chief administrative deputy for Rutherford County, each invested $3,000 in October 2013 to start JailCigs LLC, a company selling electronic cigarettes to be used by inmates, according to prosecutors.

Under the company's business model, friends and family members of inmates could buy the e-cigs online and have them sent to the jail.

Jails or detention facilities that agreed to do business with JailCigs were promised a $5 commission for every e-cig sold.

Arnold and Russell, 49, introduced JailCigs into the Rutherford County Jail, which became the company's first and largest customer in Tennessee. The jail was also the only one in Tennessee that was not given the $5 commission, prosecutors say in a press release issued Friday morning.

"Arnold and Russell used their official positions to make JailCigs profitable, including by allowing the company's e-cigarettes to be admitted into the Rutherford County Jail as non-contraband; directing jail employees to perform various tasks beneficial to JailCigs while working on county time; promoting JailCigs to other sheriff offices and counties; and permitting the company not to pay Rutherford County the customary commission from the sale of JailCigs that was made to other counties," the press release states.

JailCigs sold more than 10,000 e-cigs to Rutherford County inmates between October 2013 and April 2015. They sold for $14.95 apiece, for a total of $156,975 in revenue.

Arnold was paid $66,000 during that timeframe, while Russell made $52,000 and Vanderveer was paid $49,000.

Prosecutors say Arnold was paid $22,000 in the summer of 2014, while he was running for re-election.

On the eve of the election, Russell allegedly sent an email to a JailCigs customer, saying the program would come to an end if Arnold lost and to "tell everyone you know to support Sheriff Arnold in his re-election."

Arnold and Russell repeatedly said the JailCigs program had been approved by various officials and denied that they were receiving any profit from the company, according to prosecutors.

The charges carry a maximum penalty of five to 20 years in prison and a $250,000 fine.

Arnold and Russell declined to comment on the charges after appearing in federal court Friday morning, according to local news reports.

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