October 4, 2011
Department of Justice
United States Attorney William C. Killian Eastern District of Tennessee
SON OF FORMER CHURCH SECRETARY SENTENCED TO FIFTY-ONE MONTHS IN PRISON FOR BANK FRAUD AND MONEY LAUNDERING
$1.5 Million Embezzled From Morristown Church
GREENEVILLE, Tenn. -- Michael Dean Whitt, 44, of Morristown, Tenn., was sentenced to 51 months in prison in U.S. District Court for the Eastern District of Tennessee, at Greeneville, by the Honorable Leon Jordan, Senior U.S. District Judge. The sentence was the result of a guilty plea by Whitt on February 18, 2011, to a federal grand jury indictment charging him with conspiracy to commit bank fraud and money laundering. Upon his release from prison he will serve a three year term of supervised release. Additionally, he was ordered to pay restitution in the amount of $1,525,283.19, along with his mother, Barbara Whitt, who was previously sentenced to 44 months in prison for pleading guilty to bank fraud, conspiracy to commit bank fraud, and conspiracy to commit money laundering.
Michael Whitt and his mother Barbara Whitt devised a scheme to obtain money from a checking account of First Baptist Church of Morristown, Tenn., at SunTrust Bank. Barbara Whitt, who was employed as the financial secretary for First Baptist Church, caused over 1,600 fraudulent checks totaling over $1.5 million to be written on a church checking account at SunTrust Bank over a 34 month period beginning in July 2007. Barbara made false representations to church members as to the purposes of the checks, which were made payable to “Cash,” to induce them to sign the checks, including claiming the checks were to move funds from one church checking account to another account. Barbara then altered the checks to include her name as payee and cashed the checks, continuing until the scheme was discovered in early May 2010.
The Whitts also conspired to engage in money laundering. Barbara provided the fraudulently obtained funds from the church’s bank account to her son Michael, who used them to obtain general purpose re-loadable prepaid cards from several businesses. In July 2009, he falsely represented to one of these businesses that the funds he was depositing to his account were from his business and not an illegal source, thereby concealing the nature and source of the funds. Barbara kept the books and records for her son's business and knew the funds were not from the business. Michael used the prepaid cards to make purchases and payments for the benefit of himself and Barbara, including improvements to the residence they shared in Morristown, Tenn.
In December 2009, Michael structured the payment of $11,000 to a Morristown automobile dealership to avoid a transaction reporting requirement under federal law. Additionally, in April 2010, Michael engaged in a monetary transaction over $10,000 in the fraudulently obtained funds with a business engaged in vehicle sales, a violation of federal money laundering laws. Michael Whitt spent much of the embezzled money on what Judge Jordan described as “boy toys” - trucks, motorcycles, and a boat - as well as drugs. Michael Whitt’s release was revoked in August 2011 for failure to attend drug counseling and to report for drug screens.
The indictment and subsequent conviction of Whitt was the result of an investigation conducted by Internal Revenue Service-Criminal Investigation and Morristown Police Department. Assistant U.S. Attorney Neil Smith represented the United States.