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Date: 01-26-2018

Case Style:

United States of America v. Joseph Anthony Armes, II

Eastern District of Tennessee - Federal Courthouse - Knoxville, Tennessee

Case Number: 3:16-cr-00082-TWP-HBG

Judge: Thomas W. Phillips

Court: United States District Court for the Eastern District of Tennessee (Knox County)

Plaintiff's Attorney: Matthew Morris

Defendant's Attorney: Wade Davies

Description: Knoxville, TN - Former Department of Energy Subcontractor Sentenced for Conspiring to Defraud DOE and IRS

Joseph Anthony Armes, II, 38, of Petros, Tennessee, was sentenced by the Honorable Thomas W. Phillips, Senior U.S. District Judge, to serve 12 months and one day in prison for conspiring to defraud the U.S. Department of Energy (DOE) and the Internal Revenue Service (IRS). He will be also be supervised by the U.S. Probation Office for a period of three years following his release from prison.

Armes formerly operated Transportation, Operations, and Professional Services (TOPS) and several other businesses in east Tennessee. In April 2011, DOE awarded UCOR the prime contract for the clean-up of the former K-25 Plant, which was being developed as the East Tennessee Technology Park (ETTP) in Oak Ridge, Tennessee. UCOR awarded TOPS a $24 million subcontract for waste transportation services to the ETTP project in June 2011. The plea agreement for Armes, which is on file with U.S. District Court, detailed how he channeled payments to the son of UCOR’s President from TOPS and other businesses operated by Armes through an elaborate system of false invoices and cash payments from June 2011 through July 2013. TOPS had represented to DOE that it did not have an organizational conflict of interest with UCOR.

Armes also conspired with a tax preparer, Roger Beu, and others to submit false tax forms to the IRS to reduce federal taxes that he owed to the IRS for tax years 2007 through 2012. This resulted in a tax loss of over $1.4 million to the IRS. As part of the sentence, Judge Phillips ordered Armes to repay the IRS more than $2.3 million, which includes interest and penalties on the $1.4 million tax loss.

J. Douglas Overbey, U.S. Attorney for the Eastern District of Tennessee stated, “In addition to pursuing tax fraud, the U.S. Attorney’s Office is committed to enforcing federal laws aggressively to ensure compliance and transparency in federal government contracting and subcontracting.”

"(The) sentencing again emphasizes the IRS and U.S. Attorney’s Office will continue their aggressive pursuit of those who use fraudulent methods in an attempt to corrupt our nation's tax system." said Christopher Altemus, Acting Special Agent in Charge of the IRS-Criminal Investigation Nashville Field Office. “Everyone has a responsibility for filing correct and accurate tax returns, and this sentence should send a clear message: schemes to evade the payment of taxes are a violation of the federal tax laws and the consequences of such schemes can and will result in jail time.”

The investigation was conducted by IRS-Criminal Investigation, U.S. Department of Energy’s Office of Inspector General, and Federal Bureau of Investigation.

Outcome: Defendant was sentenced to serve 12 months and one day in prison.

Plaintiff's Experts:

Defendant's Experts:

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