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Editor's note: A previous headline misidentified the police officer as the chief instead of a captain. We apologize for this error.

A Newport police captain charged in a drug and money laundering scheme has reached a plea deal.

According to court documents, James Holt agreed to plead guilty to federal charges of distributing hydrocodone and possessing a firearm while committing that crime.

Under the agreement, which a judge approved on Monday, Holt will spend more than seven years behind bars, followed by five years of supervised released. He had faced up to life in prison.

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TBI agents arrested him and three others in July. Holt's wife, Kathy, who is a Newport alderwoman, her son, Kenny Myers, and Newport Police Captain Roger Lynn Shults are also facing charges.

TBI says Holt sold drugs in exchange for stolen items.

As part of his plea agreement, Holt admitted to the scheme, and new details are included in the documents.

Read the plea agreement

A confidential informant agreed to work with TBI agents in April to build a case against Holt. He said he'd sold Holt stolen items which Holt then sold as new in the two stores owned by Holt's wife.

According to court documents, those items "included cigarettes, other tobacco related products, dish washing detergent, diapers, other food/dry goods, and gift cards."

On numerous occasions after the informant agreed to work with them, TBI would purchase items, like cigarettes, candy, and Harley Davidson merchandise, and give them to the informant to sell to Holt. On those occasions, TBI noted that Holt was wearing his gun and badge.

The items were marked, and undercover agents were able to identify them after they purchased them at the store owned by Holt's wife.

Eventually, the informant started trading the merchandise with Holt for drugs, like Hydrocodone and Xanax. In addition, Holt admitted to giving the informant lists made up by his wife of items they would like to receive.

After his arrest, a search of Holt's locker and a safe under his desk at the Newport Police Department uncovered open evidence bags, some dating back to 1994. Investigators believe that's where Holt got the drugs he used to trade for the stolen merchandise.

The plea agreement reads, "The defendant agrees that he has abused the public trust by committing these crimes
while employed as a Newport City police officer."

Holt also faces state charges in Cocke County related to the scheme. As part of the plea agreement, he asks that any jail time for a conviction on those charges run concurrently with the ninety month federal prison sentence.

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