Prosecutors show alleged cover up, money laundering scheme in Phoenix Solutions trial

On day eight of Tennessee’s political corruption trial, FBI Special Agent Clay Worcester read aloud messages between former Rep. Robin Smith of Hixson, ex-House Speaker Glen Casada of Franklin and former aide Cade Cothren, who posed as “Matthew Phoenix” to run the secret company called Phoenix Solutions.

“Remember you have zero connection to (Phoenix Solutions) and don’t know much except they’ve done work for you and they are good,” read one message from Cothren to Casada in November 2019.

Smith resigned her legislative seat in 2022 and pleaded guilty to honest services fraud in connection with a scheme in which she and Casada directed lawmakers to use Phoenix Solutions for their taxpayer-funded printing and postage program for constituent mailers. Casada and Cothren are charged with 20 counts of fraud, theft and money laundering.

In a December 2019 message read by Worcester, Cothren texted, “We just have to make sure no one knows it’s me involved.”

“That’s short term,” Casada responded. “In 12 months, no one will remember.”

Amid text discussions of how to gain additional campaign business from the House Republican Caucus, Cothren suggested disguising his voice on phone calls with caucus members. 

Flow of money from state to defendants outlined

Prosecutors outlined the money laundering method defendants allegedly used to cover up payments to a vendor that tapped into lawmakers’ constituents mailers in 2020.

Testimony from an FBI forensic accountant detailed how the money flowed to companies run by Smith, Casada and Cothren. 

Thursday’s testimony showed how the money allegedly flowed from the state to Phoenix Solutions or Cothren, whose identity was “masked” because of his 2019 resignation in connection with a racist and sexist texting scandal.

The FBI’s forensic accountant prepared several charts to show the trio allegedly laundered nearly $52,000 over the first half of 2020.

In one instance, Rivers Edge Alliance, a company run by Smith, sent invoices to the state for a total of $10,969 for producing mailers for Republican Reps. Esther Helton-Haynes of East Ridge, Dan Howell of Cleveland and Casada. House members receive $3,000 annually for postage and printing of constituent mailers.

The state paid Rivers Edge Alliance, which then sent a check to Phoenix Solutions for $10,100, which was transferred to Cothren, even though he wasn’t part of Smith’s company.

Almost all of the money wound up with Cothren, the accountant testified. Another chart showed Casada, who ran Rightway Consulting, and Smith received 25% each of the proceeds and Cothren 30% while the rest went back into Phoenix Solutions.