End sought in fraud case

By Thomas Wilson


   Thirteen years after three ex-city employees pleaded guilty to defrauding the city of Elizabethton's Water and Sewer Department out of more than $700,000, a pittance of restitution continues to trickle in.
   According to criminal court case records, Terry Lynn Emmert and Burl Herbert Guinn pleaded guilty to defrauding the city of over $371,000 between July 1987 and March 1989. Emmert and William Vail pleaded guilty to defrauding the city out of more than $341,000 during the same time period.
   Emmert has paid over $7,611 in restitution since 1995. As of April 1995, Guinn, now deceased, had made approximately $15,000 in restitution payments through April 1995. There was no record of restitution payments made by Vail.
   Vail was released from probation and is reportedly residing in Georgia. The city has filed a claim against Guinn's estate, seeking to recover a portion of the money owed the city.
   "We have filed a claim in the estate for Burl Herbert Guinn," said Roger Day, city attorney. "We are still trying to explore that option."
   Emmert continues to make restitution payments through the court system for the defrauding amount.
   "Terry is the only one who is paying -- semi-regularly," said Day.
   The $700,000 figure does not take into account interest accrued during the past 13 years. Trial judgments draw interest at a statutory legal rate of 10 percent annually, Day said.
   The city was awarded "joint and severe judgment" of $341,575 by Chancellor Richard Johnson in the city's civil case against Emmert and co-defendant Vail.
   Johnson also awarded the city a "joint judgment" in the civil case against Emmert and Guinn but limited Guinn's portion to $200,000, according to court records.
   Day said the city had not figured the exact amount of what had been paid thus far.
   All three men pleaded guilty to multiple counts of obtaining money under false pretenses and one count each of conspiracy to defraud in Feb. 1990. Each was sentenced as a Range I offender with no prior records and a release eligibility of 30 percent.
   Vail pleaded guilty to 65 counts of obtaining money under false pretenses and one count of conspiracy to defraud in February 1990. He received a sentence of 14 years. He was incarcerated from Aug. 1, 1989 to March 5, 1991.
   Guinn pleaded guilty to 81 counts of obtaining money under false pretenses and received two years on each count with six counts to run consecutively and the remaining 66 counts to run concurrently for a total sentence of 12 years. He served time from Feb. 19, 1990 to Dec. 10, 1991.
   Emmert was a co-defendant in each case and pleaded guilty to 146 counts. He was sentenced to 15 years in the county jail. He entered jail on Feb. 19, 1990 and was released Jan. 31, 1992.
   Emmert stated in his classification report that during the 15 years he worked for the city he worked into a position of trust where he had access to, and control of, a large volume of city water department supplies.
   "For approximately 15 years I had noticed various city officials and employees stealing supplies and 'pocketing' the money they received for them," Emmert stated in his classification report. "Even though I was paid very well on my job ... after 15 years employment I also became involved in the theft."
   He also stated his desire to make restitution to the city regarding the case.
   "If I can come to terms with the District Attorney's Office of Carter County, I would be more than willing to make restitution for my crimes", Emmert stated in his classification report.
   Guinn testified before the grand jury that he started doing business with the city as Duke Enterprises. The company had no charter, and he paid no taxes under the name of Duke, and had no books or records on the company, Guinn testified.
   Emmert said that when material came in, a purchase order consisting of several sheets of paper would have to be signed. He said that when the pink slip was signed stating that the material had been received, a check be written for the material order.
   The invoices then went to the city manager's office where normally, the secretary would sign them, according to testimony. The invoices were then turned into the payroll department, where a check would be issued and given to Guinn or Vail, who would go to the bank, cash the check, and then take Emmert half the money, according to court accounts.
   In his classification report, Vail stated: "Guilty! In the mid-1970s, time became tough for me, a salesman on commission. I was about to lose (my) house, car, job, wife and kid. (A)n offer was made to me to make extra cash, by Mr. Terry Emmert ... He explained how and what I could do to draw a check from the city, which I would in turn halve with him."
   "It was very easy to do as there was no manager to detect the loss", Vail stated.
   Guinn told the court that roughly 70 to 75 percent of invoices to Duke Enterprises were bogus.
   Since that time, the city has implemented a system of checks and balances to prevent a similar incident, the most visible being the selection of a purchasing agent.