TheTimesTribune.com, Corbin, KY

Local News

August 30, 2012

Knox County Attorney reprimanded

CORBIN — By Becky Killian / Managing Editor

Dixon Supreme Court Order

Knox County Attorney Charley Greene Dixon has been publicly reprimanded for being a “pawn” who helped a former judge/executive and his brother money launder more than $85,000, according to a Kentucky Supreme Court opinion dated Thursday.

The document refers to two charges made in July 2008 by the Inquiry Commission against Dixon related to Dixon’s attorney escrow account. Dixon was ultimately found not guilty of those charges, although the trial commissioner recommended Dixon be reprimanded and pay for the cost of the proceedings because Dixon had “violated the spirit of the rules.” That recommendation was eventually redacted from the proceeding’s report.

While the Kentucky Bar Association didn’t file an appeal of that proceeding, the Kentucky Supreme Court chose to review the trial commissioner’s decision.

The Kentucky Supreme Court document outlines the 11 checks Dixon deposited into his attorney’s escrow account between February and June 2005 at the request of Raymond Smith. The checks were payable to either Total Timber or Grade All, and two of them were drawn from the Knox County Road and Bridge Fund. Following each deposit, Dixon would write a check in most cases to Raymond Smith’s brother, Matt Smith, though he once wrote a check to Matt Smith’s wife.

An FBI investigation determined Raymond Smith used his elected position “to create false bids and invoices for county construction projects.” The money was laundered through accounts including Dixon’s escrow account.

The court document states Dixon wasn’t charged with a crime because Raymond Smith would have had to aid in his prosecution, which was believed unlikely to occur.

Following its review, the Kentucky Supreme Court disagreed with the trial commissioner’s finding that Dixon didn’t violate the professional rule of conduct that relates to the safekeeping of property. Since Dixon had for many years provided legal services to the Smith family, the Kentucky Supreme Court found his actions involving the checks and the deposits were an extension of of the attorney-client relationship. As a result, rather than distribute the money to a third party, Dixon should have notified Total Timber and Grade All that he had received the funds.  

The trial commissioner had also found the Kentucky Bar Association failed to prove Dixon “perpetrated fraud, misrepresentation, dishonesty, or deceit” and the Kentucky Supreme Court opted to “not disturb” that finding, noting the trial commissioner viewed Dixon as being “extremely naive and trusting, lamenting the fact that Dixon failed to recognize several serious warning signs.”

However, the Kentucky Supreme Court disagreed with the trial commissioner’s inability to determine who was defrauded or deceived since Dixon facilitated Raymond Smith’s money laundering and two of the checks were issued by the county.

“So Dixon’s actions had the effect of defrauding the county that Dixon represented as county attorney. Other checks were drawn on various corporate accounts whose corporations were similarly defrauded. These clearly were victims of Raymond Smith’s money-laundering scheme,” the court document indicates.

Dixon had requested a private reprimand but the court opted to make the reprimand public, stating  “a greater sanction” was appropriate since Dixon is an elected official.

“Dixon’s negligence, extreme naivete, and failure to recognize his own role in facilitating the Smiths’ money laundering scheme defrauded the Knox County Fiscal Court and other corporations,” the document states.

In 2008, Raymond Smith was sentenced to two-and-a-half years in prison after he pleaded guilty to mail fraud in London’s U.S. District Court.

A call to Dixon’s office wasn’t returned.

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