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Covington car dealer Marty McDivitt arrested for the third time

By Jeff Ireland on November 14, 2019

For the third time in eight months, Marty McDivitt has been arrested and charged with crimes related to his Covington car business.

McDivitt was booked into the Tipton County Jail Nov. 8 and charged with two counts of filing a false sales tax return, which are felonies.

He bonded out the same day and is scheduled to appear in court for a status hearing on June 19, 2020. The trial date is July 20.

The indictment alleges he failed to remit sales tax that he collected to the state.

McDivitt, 52, was also arrested July 9 and charged with 75 felonies.

The majority of the charges were for theft ranging between $2,500 and $60,000. One was for theft of $250,000 or more in which he was alleged to have “obtained over $250,000 from the Bank of Ripley without its effective consent.”

Other charges included multiple counts of worthless check, criminal simulation, forgery, sales tax fraud and impersonation of a licensed professional, in which he’s alleged to have pretended to be an EMT.

In a two-count criminal simulation charge, officials alleged he altered a federal tax return with intent to defraud InSouth Bank. Multiple counts also alleged he fraudulently “exercised control” over vehicles of his customers.

State Farm Bank, Ally Financial, USAA Federal Savings Bank, West Tennessee Credit Union, Bank of Tipton and Bank of Ripley were all named as victims.

McDivitt is scheduled to appear in court to face those at a status hearing on Nov. 22. That trial is scheduled for Jan. 13.

On March 20, McDivitt was arrested on a warrant from the Columbia (Ill.) Police Department and charged with theft by deception ($10,000 to $100,000) and deceptive practice. Both are felonies.

Those charges were ultimately dismissed.

The Tennessee Attorney General’s Office obtained a Temporary Restraining Order earlier this year from the Circuit Court of Tipton County against McDivitt Motors and McDivitt.

In granting the TRO, Chancellor William Cole found that McDivitt Motors has engaged in practices that violate the Tennessee Consumer Protection Act and the Uniform Fraudulent Transfer Act and that immediate harm would result unless the court intervened. The TRO also orders an asset freeze, receivership and accounting against McDivitt Motors.

The state’s Civil Enforcement Complaint against McDivitt Motors, filed at the same time as the motion for a TRO, alleges that the defendant deceived customers by claiming McDivitt Motors was licensed to sell new vehicles, which it was not, and misrepresented used vehicles as new, among other things. Defendants also failed to disclose to customers that vehicles they traded in would not be paid off, as was the understanding between the parties.

The state also alleges the defendants acted unlawfully by writing checks to purchase new vehicles when bank account balances were negative and transferring large sums of money between a business checking account and a personal checking account, both ultimately under McDivitt’s control and supervision.

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