Tennessee Sheriff Indicted for Massive Prisoner Work-Release Fraud
On June 12, 2024, the Sheriff of Tennessee’s Gibson County was arrested and booked on a $25,000 bond into Nashville’s Davidson County Detention Center on a pair of indictments with a total of 22 counts related to his alleged scheme to employ prisoners on work-release and then rip off the state for their housing and rip off the prisoners of most of their wages.
Paul Thomas, 52, is accused of stealing $1,417,204.06 in wages and fees from 170 prisoners between February 2020 and October 2022, as detailed in an investigative report released by the state Comptroller’s Office on the day of his arrest.
The scam involved three separate entities that Thomas formed: Alliance Staffing, which rented out the prisoners’ labor to private firms, charging a “markup fee” of $4 to $10 per hour for each of 175,204 hours that they worked; Alliance Transportation, which collected $18 per trip from each prisoner for a ride to or from a work site; and Orchard House, where many of the prisoners lived, which collected a $40 daily housing fee from them. On top of withholdings for income taxes and Social Security, the charges from Thomas’ various scams left many prisoners with a net pay of zero, the report said.
Moreover, while prisoners were living at Orchard House, Thomas also defrauded the state Department of Corrections (DOC) of $507,273 in reimbursements that were supposed to defray the cost of their board in the county jail. He deposited $448,637.09 in prisoner wages into Alliance accounts, rather than the prisoners’ accounts, and he took $181,644.50 in personal wages, benefits and legal fee reimbursements from Orchard House—in direct violation of state law that prohibits Sheriffs from profiting off detainees.
Unsurprisingly, the Comptroller also found sloppy record-keeping by the various firms Thomas created to pull off the scam. Sentence credits were also improperly directed to prisoners in exchange for their labor to construct the Orchard House facility that he owned. See: Comptroller’s Investigative Report, Gibson Cty. Sheriff, Tenn. Comptroller of Treas. (June 2024).
On May 2, 2024, a Davidson County grand jury indicted Thomas on one count of Theft of Property over $60,000, two counts of Computer Crimes over $60,000, and one count of Forgery over $60,000. A Gibson County grand jury then followed on May 6, 2024, with an 18-count indictment for Official Misconduct. No charges have yet been announced for the unnamed investors in the three entities Thomas formed to perpetrate his fraud.
Additional sources: The Tennessean, WBBJ, WSMV
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