Indictment traces Scott Maddox dealings with undercover FBI agents

Jeffrey Schweers
Tallahassee Democrat
Scott Maddox and J.T. Burnette are pictured with at least three undercover FBI agents. After internal discussions and conversation with the FBI, the Democrat decided to blur the faces of the undercover agents and three unidentified individuals.

The 44-count, 66-page federal indictment of former City Commissioner Scott Maddox on racketeering and fraud charges includes a five-page section detailing his interactions with Company F, otherwise known as Southern Pines, the front FBI undercover agents used to infiltrate Tallahassee.

Southern Pines served as a fake business for agents posing as Atlanta real estate developer Mike Miller, environmental consultant Brian Butler, and medical marijuana entrepreneur Mike Sweets, who were seeking city approval on rezoning or annexing property.

Their go-between was Person G, identified in the indictment as a local real estate developer and entrepreneur believed to be John “J.T.” Burnette, who is one of several business people named in the FBI subpoenas that dropped on City Hall in June 2017.

Anatomy of an FBI FAKEOUT:

He spoke to Miller and Sweets about a potential real estate deal that could qualify for tax incentives through the Community Redevelopment Agency and “identified Maddox as the most powerful member of the CRA.”

The CRA at the time was considering an expansion of its boundaries.

Person G met with the undercover agents in September 2016 explaining that Maddox “effectively gets paid through the lobbying firm.” The amount would be based on the political difficulty of authorizing the project, the indictment said. For example, the company might have to pay the firm $10,000 a month for as long as three years if the value of the public benefit to the company was $3 million.

When a representative of Southern Pines met Maddox and said Person G recommended him, Maddox replied, “(Person G) is my guy.”

Today's developments:

Maddox and Burnette have ties through real estate transactions dating back to 2008, when Maddox bought nine units in the Adams Street lofts and then sold them to his business partner and longtime friend Paige Carter-Smith. Soon after, she sold five of the units to Burnette’s firm, Hunter and Harp, for $475,000, making about $40,000 per unit more than she paid for them.

When asked if they would hire Maddox, he said, “Not me. I can tell you somebody that you can hire. But not me.”

Asked if they should hire his law firm, Maddox said, “You wouldn’t want to do that. You wanna pay the consulting firm that I told you, so that I would not be conflicted out … You’d want to hire Governance Incorporated.”

When they asked how much to put into the “coffers a month to start the ball rolling,” Maddox replied, “Twenty.” When they said to Maddox that $20,000 a month seemed like a lot of money, Maddox said, “No it’s not.”

This photo shows the three men believed to be undercover FBI agents who used aliases and cover stories as part of an investigation in Tallahassee. Pictured from left are Mike Miller, Mike Sweets and Brian Butler. The Democrat decided to blur the physical characteristics of the men after discussions with the FBI.

About a month later, Person G and Southern Pines agreed to $10,000 a month. Person G confirmed that the payments were for Maddox, “there’s nobody else in Governance other than Paige, which is Maddox, effectively.”

They were also told that Person G would act as a go-between because Maddox didn’t “want any more friends” and didn’t want any more inappropriate conversations” with anyone other than Person G.

The company made its first check to Governance for $10,000 on Nov., 16, 2016 and sent a second check for $10,000 on January 23, 2017.  The company also sent two $10,000 checks to Governance Inc. on Dec. 18, 2016 and Feb. 22, 2017.

Around mid-December 2016, Carter-Smith sent Southern Pines a consulting agreement. Around the same time, Maddox traveled with Southern Pines representatives by charter jet from Tallahassee to Las Vegas. He also accepted a hotel room and meal expenses paid by Southern Pines representatives.

A photo obtained by the Tallahassee Democrat shows Maddox in a room in Las Vegas with Burnette, the undercover agents and several other unidentified people. The photo shows Maddox posing with a “hang loose” surfer hand sign.

Maddox in the middle:

Maddox didn’t report the flight or hotel room and meals as gifts, as required by state law and city charter. His commission aide said no Las Vegas trip went through his office.

During the trip, Maddox told a story “about threatening to destroy a former client’s business deals if the former client did not pay Maddox his fee,” the indictment said.

After the federal grand jury subpoenas were issued in June 2017 Maddox and Carter-Smith had burner cell phones purchased to be used strictly between Maddox, Carter-Smith and others, including an unnamed city of Tallahassee staff member.

They were both interviewed around the same time by federal agents about their interactions with Southern Pines. According to the indictment, Maddox “falsely stated” that Southern Pines had not attempted to pay him any money, that he played no role in “introducing the company to Carter-Smith, and that he had no relationship with Governance.”

Carter-Smith told federal agents that she was the only person associated with Governance. Both Maddox and Carter-Smith pleaded not guilty Wednesday to all 44 charges in the indictment.

Contact Schweers at jschweers@tallahassee.com. Follow him on Twitter @jeffschweers.