By Mike Donila, WBIR
Former Knox County Trustee John Duncan III was granted judicial diversion Thursday on a felony charge connected to bonuses he paid to himself and a number of employees for educational studies they never completed.
Under diversion, he can seek to wipe his record clean if he abides by the terms of his probation.
"I'd like to thank the hundreds of people who reached out to me and my family, because this has been one of the toughest things I've ever had to go through," Duncan said after the brief hearing.
He added that "everything that happens - good and bad - is part of God's plan," and that he and his wife, Jennifer, look forward to "moving on to the next chapter."
His attorney Jeff Hagood said Duncan "accepted full responsibility, frankly, more than I think he should have."
Duncan initially resigned in early July after pleading guilty to official misconduct in exchange for one year of unsupervised state probation that runs through Aug. 14, 2014. He also paid $604 in court fees.
During Thursday's hearing to seek judicial diversion, Hagood told Knox County Criminal Court Judge Mary Beth Leibowitz that "John Duncan and I both recognize how painful it must be to see a young man with a promising career who has experienced and made a failure in a part of his job responsibility."
He said that Duncan accepting responsibility was tough "given the facts." Hagood then added that "I cannot conceive of any individual who is doing more to help his community and region than John Duncan has done," although he did not provide any details.
"All this makes him a candidate for judicial diversion," he said. "Mr Duncan is very, very remorseful."
Leibowitz said the case "has not been easy," and that she was "madder than heck" when prosecutors first brought it to her. She then recalled a story about shaking hands with Duncan's grandfather, John James Duncan, Sr., when he served as Knoxville mayor in the early 1960s.
She said Duncan "deserved no more or any less" than anyone else in his position would get.
"I would like to see you continue along the path making your name clean, doing what you need to do and continuing to obey the law - don't jaywalk, don't drink and drive," she told Duncan. "I would do this to anyone in your situation who has come in and admitted (the crime) and never before committed an offense."
The son of long-time U.S. Rep. John J. Duncan Jr. and nephew of state Sen. Becky Duncan Massey, he was serving his first term as the county's top tax collector and a little more than a year away from seeking re-election.
After he stepped down, the Knox County Commission appointed Craig Leuthold, a former commissioner, to finish out the remainder of his term, which ends Aug. 31 next year.
Duncan, 33, is the third member of his administration to plead guilty in a bonus scandal that's tarnished his administration almost from the get go.
In late December last year, his ex-chief of staff, Joshua Burnett, and the office's former delinquent tax attorney, Chad Tindell, each pleaded guilty to facilitation of official misconduct, a misdemeanor. Both were sentenced to 11 months, 29 days probation and paid more than $600 in fines. Each was granted judicial diversion, which prosecutors say is not uncommon for most non-violent offenders who accept responsibility and have no prior criminal record to receive judicial diversion.
Shortly after taking office in September 2010, Duncan, a Republican, gave himself and five other employees each a $3,000 bonus that was supposed to go only to those who attain the designation of "certified public administration."
None of them had. The following year, he again doled out the same bonuses, and by then a few of them were certified. Duncan, however, was not.
In the end, the former Trustee paid out more than $50,000 in bonuses during the two years combined, although prosecutors only targeted the payments made in his first year.
State code allows for an annual incentive up to $3,000 for those who receive the certification. And, it's not uncommon for the county's other fee offices, like the register of deeds or the court clerks, to provide the bonuses, but they only do so to those who have graduated from the program.
The certification is administered by the University of Tennessee County Technical Assistance Services, or CTAS, and includes 60 hours of courses and several exams designed to teach officials the fundamentals of serving the public.
In a July 23 statement Duncan made to state officials that was contained in his presentence investigation report, the former trustee said that he started studying the CTAS materials before he took office, but once in, his focus shifted "on building a staff, changing the culture and getting through my first tax season."
"Unfortunately, I gave the CTAS program almost no thought whatsoever during those first months though I used a lot of what I learned from CTAS early on," he stated.
Duncan added that his intent "was for everyone receiving a payment to complete the coursework within a year" or "pay the money back."
He and his staff did pay back the money, but only after the media and a number of elected local leaders took notice.
However, he long maintained that the initial payments were legal, since he included them in one of his annual salary suits, a lawsuit that fee officers file in Knox County Chancery Court that outlines much of the departments' financial needs.
Investigators, though, disputed his claims in the state's presentence report, noting that long-time office employees warned Duncan not to issue the payments until the coursework was complete.
They also pointed out that Zach Brezina, an analyst in the department and longtime Duncan friend, had taken the CTAS computers tests for his co-workers.
Brezina, who cooperated with authorities, was never charged in the scandal.
According to the investigative report, he "completed most or all of the on-line tests in Duncan's name" in January 2012, and also "filled out an off line 'open book' 100 question multiple-choice test on the Tennessee County Government Handbook specifically required for the first phase of the training for the program for both himself and for Duncan."
As the media began asking questions about the payments Duncan called Brezina "in an agitated state" and then went to his home, according to the report. The then-trustee told Brezina that if anyone in the media asked about whether he took the tests for other employees, he was to say that the two worked on Duncan's tests together.
Duncan, in the presentencing report, said he "completely dropped the ball" and that he accepts "full responsibility for the handling of this continuing education under my watch."
"I managed this part of the office as poorly as I possibly could have . . ." he wrote.