The Special Investigations Section of the Tennessee Department of Revenue conducted the investigation that led to the indictment of Aaron Cleo Watts (age 68) and James Keith Watts (age 44) on charges of sales tax evasion, interfering with a Tennessee Department of Revenue officer, and theft of property. James Keith Watts was arrested this morning by agents of the Special Investigations Section at the office of Discount Tobacco Outlets, Inc., 1231 Salem Park Court, Murfreesboro, Tennessee. Aaron Cleo Watts surrendered himself early this afternoon to agents at the Rutherford County jail. Bond was set at $150,000 each.
On Oct. 5, 2011, both Keith and Aaron Watts were indicted by the Rutherford County Grand Jury on 136 Class E Felony counts for attempting to evade sales tax in violation of Tenn. Code Ann. Section 67-1-1440(g) covering the period Jan. 1, 2004, through Sept. 30, 2005, for seven stores, located in the middle Tennessee area and operated by Discount Tobacco Outlets, Inc. The indictments charge both with willfully attempting to evade or defeat sales tax totaling $127,373.76. Both men were also charged on four Class E Felony counts for willfully attempting to impede an employee from performing their official duties in violation of Tenn. Code Ann. Section 67-1-1440(b) by removing and failing to provide business records, and on one Class B Felony count for theft of property in excess of $60,000 in violation of Tenn. Code Ann. Section
39-14-103.
“The Department of Revenue promotes voluntary taxpayer compliance by educating taxpayers, aggressively pursuing criminal sanctions and demanding accountability when taxpayers engage in fraudulent activity," said Revenue Commissioner Richard H. Roberts. "These indictments underscore the department's ongoing efforts to enforce Tennessee's tax laws."
If convicted, Keith and Aaron Watts could be sentenced to a maximum of two years in the state penitentiary and fined up to $3,000 for each count of attempted sales tax evasion and impeding an employee of the Tennessee Department of Revenue, and sentenced to a maximum of twelve years in the state penitentiary and fined up to $25,000 for theft of property.
Commissioner Roberts expressed his appreciation for the excellent cooperation the department has enjoyed with District Attorney General William Whitesell’s office. Citizens who suspect violations of Tennessee’s revenue laws should call the toll-free tax fraud hot line at (800) FRAUDTX (372-8389).
In addition to collecting state taxes, $2.0 billion of local sales and business taxes were collected by the department for local governments during the 2011 fiscal year. Besides collecting taxes, the department enforces the revenue laws fairly and impartially in an effort to encourage voluntary taxpayer compliance. The department also apportions revenue collections for distribution to the various state funds and local units of government. To learn more about the department, log on to
www.TN.gov/revenue.
