Was former Covington car dealer Marty McDivitt merely cutting corners while borrowing money from the Bank of Tipton, or was he just flat out stealing?

That was the central question a jury of eight women and four men had to answer this week during a four-day trial in Tipton County Circuit Court.

It took the jury less than three hours Thursday to decide he was stealing.


McDivitt was found guilty of 21 counts of felony theft, including the Class A felony of theft over $250,000, which carries a possible sentence of 15 to 25 years. He would have to serve at least 30 percent of his sentence before being eligible for parole. Judge Joe Walker, who presided over the trial, will sentence McDivitt on June 15.

When the verdict was read, McDivitt, 53, looked down and shook his head. He put his wallet and belongings on the defendant’s table and asked his wife, who was sitting behind him, to pick up his stuff before he was led to jail by two sheriff’s deputies. McDivitt’s bond was revoked and he will be in custody until his sentencing.

Twenty of the counts stemmed from McDivitt, who operated McDivitt Motors in Covington, presenting car titles to the Bank of Tipton as collateral to make draws on his revolving line of credit. The problem was that McDivitt did not own the cars. In many cases the cars had already been sold to customers, which led to many complaints being filed against McDivitt when title issues arose. Some customers also said McDivitt did not pay off loans on trade-ins, leaving customers with two car payments.


The 21st count alleged that McDivitt deployed a “scheme of thefts” to defraud the bank.

Assistant District Attorney Walt Freeland, who prosecuted the case, called it a “one-man crime spree that devastated a local bank and also devastated a lot of citizens.”

Ted Hanson, McDivitt’s attorney, said McDivitt worked with Bank of Tipton for 20 years and had no issues until the time frame of Dec. 16, 2018 to March 20, 2019, when all of the theft charges occurred. He said, with few exceptions, McDivitt paid back the loans within three months.

Hanson put much of the blame on Bank of Tipton employee Jeff Mitchell, who he said began handling McDivitt’s account in 2018.

“He began shuffling the deck, changing the rules,” Hanson said. “All these allegations occurred during these 90 days and he’d been in business for 20 years.”

Sherry Sturm, McDivitt’s former secretary, and Joey Hudgins, an agent with the Tennessee Highway Patrol, were the key witnesses for the prosecution.

Sturm worked for McDivitt for 12 years before resigning in March of 2019. She said she quit because she tired of lying to customers.

“They would be wanting to know when these things would be taken care of and I didn’t have any answers for them,” Sturm said. “I did not like lying or making up excuses when I knew they weren’t true.”

She said in some cases she was instructed by McDivitt to fill out a form saying a missing car was on a test drive. The fake name “Donald Dash” was used on one occasion. She also testified that McDivitt would write incorrect vehicle identification numbers on vehicles’s windshields when bank employees came to verify the collateral cars were on the lot.

Hudgins, who led the investigation of McDivitt and was present when the dealership was raided on March 22, 2019, said he was shocked what was found.

“In my wildest imagination I would have never dreamed we would find what we did,” he said.

More than a dozen people were called to testify by the prosecution and talked about missing titles and McDivitt not paying off trade-ins.

McDivitt testified during the trail and said he had been doing business with Bank of Tipton for close to two decades and always paid them back. He said he learned the business on the fly and was operating the way he always had.

Three people – Mark McClain, David Price and Garry McLillie – testified about McDivitt’s good character and said they had positive business experiences with him.

“There’s no proof that Mr. McDivitt intended to or stole from Bank of Tipton,” Hanson said.

Hanson pointed out that McDivitt had more money available in his line of credit and was not in financial straits.

Law enforcement official raid McDivitt Motors in 2019.

Freeland summed up the state’s position in closing: “Some people don’t need the money, they want it. Some people are greedy … You can be a good business man, a good community member, until you’re not. Right now we’re focusing on the ‘until you’re not.'”

In a press release, District Attorney Mark Davidson said, “Today’s verdict drives home the point that you can’t rip citizens off at the car lot or elsewhere. These convictions demonstrate the continuing commitment of law enforcement and the District Attorney’s Office to aggressively investigate and prosecute theft and fraud cases in this district, especially where there are multiple citizen and business victims. These convictions should serve as a warning to individuals and businesses in our district who violate the law by engaging in fraudulent, deceptive and criminal acts. We are glad that we were able to achieve justice for the victims and the Tipton and Lauderdale county communities in this case.”

McDivitt is also facing six separate pending indictments. The charges include multiple counts of theft, forgery, criminal simulation, sales tax fraud and writing worthless checks.



Jeff Ireland
Author: Jeff Ireland