NASHVILLE, Tenn. - Today special agents of the Tennessee Department of Revenue arrested Mark N. Swaggerty at his Knox County business on sales tax evasion charges. Swaggerty, 37, is president of John Sevier Auto Sales, Inc., d/b/a Midway Motors, located at 6275 Clinton Highway in Knoxville.

"The majority of businesses pay appropriate taxes. This case serves as a warning to others who think they can get away with tax fraud in Tennessee," said Revenue Commissioner Loren L. Chumley. "We will continue to pursue criminal activity and prosecute tax evaders to bring justice to Tennesseans."

Swaggerty was indicted by the Knox County Grand Jury on Jan. 11, 2005, on six counts of sales tax fraud and one count of theft. The indictment charged that Swaggerty willfully and intentionally caused John Sevier Auto Sales, Inc., to file false and fraudulent sales and use tax returns for the periods June 1, 2002, through Dec. 31, 2002. These fraudulent actions resulted in John Sevier Auto Sales, Inc., failing to report $246,320 of taxable sales for the business and failing to remit $21,027 of the proper sales tax collected and due. This is in violation of Tenn. Code Ann. Section 67-1-1440(g).

A $5,000 bond was set. If convicted, Swaggerty could be sentenced to a maximum of two years in the state penitentiary and fined $3,000 for the six counts relating to his failure to remit sales tax collected and filing false returns. If convicted on theft of property, Swaggerty could be sentenced to a maximum of six years in prison and fined up to $10,000. In addition, civil tax and penalties are due the state.

Citizens who suspect violations of the Tennessee revenue laws should call the toll-free tax fraud hot line at (800) FRAUDTX (372-8389).

The Department of Revenue collects approximately 92 percent of total state tax revenue. During the 2003-2004 fiscal year, the department collected $9.1 billion in state taxes and fees. In addition to collecting state taxes, $1.6 billion of local sales tax was collected by the department for local governments during the 2003-2004 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.Tennessee.gov/revenue.

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