Scott Maddox and Paige Carter-Smith, once power players in Tallahassee’s political scene, shuffled into a federal courtroom on Wednesday, their legs in shackles, to answer charges they shook down city vendors for bribes and pocketed hundreds of thousands of dollars.

A federal grand jury on Tuesday indicted Maddox, a longtime city commissioner and former “boy mayor,” and Carter-Smith, his longtime friend and business partner, in a pay-to-play scheme that included bank fraud, extortion, bribery, making false statements and filing false tax returns. The indictment was unsealed Wednesday after the FBI arrested them both.

The 44-count indictment led to immediate fallout at City Hall. Gov. Rick Scott suspended Maddox from office, saying in an executive order that doing so was “in the best interests of the residents of the city of Tallahassee and the citizens of the state of Florida.” The city has 20 days to fill the vacancy or let the governor make the appointment.

Carter-Smith signaled she would resign her post as executive director of the Downtown Improvement Authority.

The indictments are the first to culminate from the FBI’s public corruption probe in Tallahassee, which began more than three years ago with the arrival of undercover agents posing as out-of-town developers and medical marijuana entrepreneurs. The investigation has been chronicled extensively by the Tallahassee Democrat for the last two years.

It is the same investigation that plagued former Mayor Andrew Gillum's recent campaign for governor. Last-minute revelations about his interactions with undercover FBI agents may have contributed to his defeat at the hands of Republican Ron DeSantis.

Both Maddox and Carter-Smith pleaded not guilty during a 20-minute appearance before Magistrate Judge Charles Stampelos at the U.S. District Courthouse in Tallahassee. Stampelos set trial for Jan. 14, although the date is expected to be pushed back. Both were released from federal custody with a number of conditions, including that they not travel outside the Northern District of Florida.

Stampelos read the charges against them both, along with the maximum sentences and fines they could face. The most serious charges carry maximum terms of 30 years in prison. Maddox and Carter-Smith also could face hundreds of thousands of dollars in fines and criminal forfeiture of their personal possessions and property.

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Maddox and Carter-Smith were largely silent during their first appearance and arraignment. Both of them said they had not read the indictment, though the charges had been explained to them by their lawyers. They did not respond to questions from the press as they walked out of the federal courthouse. Their lawyers, however, vowed to contest the charges.

“It’s one of the most over-reaching indictments that I’ve ever seen in my life,” said Maddox’s attorney, Stephen Dobson III. “We’re going to fight this indictment tooth and nail. I sure don’t anticipate any kind of plea deal at all in this case.”

Carter-Smith’s lawyer, Stephen Webster, criticized the government for “leaks” and the improper release of documents, a reference to the inadvertent release of sealed search warrant documents earlier this year that laid out the case against Maddox and Carter-Smith. Webster said both Maddox and Carter-Smith were holding up despite the charges.

“They’re strong people,” Webster said. “And they’re going to fight, and they’re going to clear their names.”

Maddox, an attorney who earned bachelor’s and law degrees from Florida State University, first was elected to the City Commission in 1993, when he was still in law school. He served until 2003, including a stint as mayor. He ran for statewide office several times and served as chairman of the Florida Democratic Party before returning to the commission in 2012. He filed to run for the state Senate in 2020.

Mayor John Dailey, who’s been on the job less than a month, called the indictments “unsettling news,” though he said he trusted the legal system “will set matters straight.” He and other city officials held a news conference Wednesday evening to announce the appointment process to fill the commission vacancy.

“We are committed to operating with full transparency and holding ourselves to the highest ethical standards,” Dailey said in an email. “I hope this matter is resolved quickly for everyone involved. In the meantime, we at the city of Tallahassee will work to move our community forward with a focus on providing high-quality services to our residents."

Consulting firm at heart of probe

Federal prosecutors said Maddox, 50, conspired with Carter-Smith, 53, to run two companies, Governance Inc., and Governance Services LLC, as one entity called Governance.

"Governance was part of a racketeering enterprise that extorted money and accepted bribes from clients under the color of Maddox's office and through fear of the economic harm that Maddox could inflict in his position as an influential city commissioner,” according to the indictment.

The duo treated Governance and Governance Services finances as their own by making payments from the companies’ bank accounts directly to their personal bank accounts and moving money around to pay for "personal, campaign-related and business expenses."

Maddox in the middle:

Maddox and Carter-Smith controlled the enterprise, the indictment said, “and directed other members and associates of the Enterprise in carrying out the unlawful activities and other activities in furtherance of the enterprise’s affairs.”

They also lied, repeatedly and under oath, about the nature of Maddox's relationship with Governance and whether the company was paying him, the indictment said. Maddox asked for advice from City Attorney Lew Shelley in 2012 about "former clients" who were actually still clients doing business with the city.

Under oath, he told a state ethics investigator in 2014 that he hadn't been paid by Governance since his re-election to the City Commission in November 2012 when in fact he was still being compensated, the indictment said. And during a residency trial in 2016, he told a Leon circuit judge he didn't know whether his law firm represented Governance when in fact it was on a retainer.

By concealing and protecting their activities from city staff, law enforcement and the public, they enriched themselves and expanded Governance's client base and revenues, "through bribery extortion, bank fraud, wire fraud, and mail fraud."

The indictment also said Maddox used his position on the City Commission to vote on matters and coerce city employees to take actions that benefited his and Carter-Smith's clients.

Six companies are listed — but not named — in the indictment. They include an architectural engineering firm, a ride-sharing company believed to be Uber that hired Governance to work on a city ordinance, a waste service provider believed to be Waste Pro, a local construction company up for a sidewalk contract, a residential developer facing an issue with the Utilities Department, and the company that served as a front for FBI agents seeking to expand Community Redevelopment Agency boundaries.

Maddox: 'Show me some love'

The indictment characterizes several exchanges between Maddox and his clients over payments. For example, Company A, the architectural engineering firm, would miss its monthly payments to Gov. Services, prompting a call from Maddox saying "show me some love," meaning Company A needed to catch up on its payments. The company paid $61,500 to Governance over a five-year period.

When Company C, believed to be Waste Pro, was fined $64,000 for failing to deliver trash cans to city customers, the regional vice president asked Maddox to intercede. He talked to City Manager Anita Favors, and the fine was knocked down to $7,000.

Another time, after Maddox voted to extend a city contract with Company D, the company's owner sent a text message to Maddox, "you do good work," to which Maddox replied, "I love it when a plan comes together!"

It was a phrase Maddox must have liked. After helping get the city to change its position on a fence around one of his properties, a residential developer (Company E) thanked Maddox. Again, Maddox said, "I love it when a plan comes together."

And when the same residential developer had an issue with work the city utilities department was doing at one of his apartment complexes, Maddox replied via text message: "All good. I can handle city guy no prob. Already had a word at the top. Should be straightened out now."

Company D paid Governance $146,000 between November 2012 and October 2017, the indictment said. Company E paid the firm $138,000 between November 2012 and March 2017.

Bank statements falsified

The indictment also said Maddox and Carter-Smith defrauded a bank out of more than $250,000 through two fraudulent short sales, lied to federal agents about Governance and violated federal tax laws by filing false returns with the IRS.

Maddox bought a two-story office building at 208 W. Carolina St. with an $855,000 loan from BB&T and defaulted on the loan five years later. In February 2011, he proposed a short sale of the property to Governance Services for $375,000, nearly $500,000 less than what he paid for it.

He told a Governance client he needed money to fund the short sale, and the client gave him a check for $120,00, the indictment said. He also got two checks from family members totaling $95,000, all of which he deposited in the Governance bank account for Carter-Smith to use to buy 208 W. Carolina.

“Without these checks and the $120,000 deposit, Gov. Services would not have had sufficient funds to purchase 208 W. Carolina,” the indictment said.

Similarly, Maddox bought 510 N. Adams for $550,000 in March 2007, using a loan of $495,000 from BB&T. Governance and Maddox personally guaranteed the loan, and he declared he was president of Governance. Maddox said he would notify BB&T if anyone else bought Maddox Acquisitions, which he failed to do when he sold Governance and Maddox Acquisitions to Carter-Smith in 2010.

Around March 2012, Maddox told BB&T he wanted to do a short sale on 510 North Adams. He had an offer from Governance Services for $225,000 — more than $250,000 less than what Maddox had paid originally. In both cases, Maddox filed a false arms-length affidavit, claiming he had no relationship with the buyer.

During these short sales, Maddox submitted a financial affidavit that stated he had no significant assets beyond the 510 N. Adams Street property. The affidavit failed to mention $34,000 in his personal bank account, real property in Madison County, the balance and interest due to him from a condo loan, and about eight vehicles.

Maddox’s former colleagues react

City Commissioner Curtis Richardson, who has known Maddox since he was mayor, said he was never lobbied by Carter-Smith and witnessed no evidence of Maddox trying to buy votes.

"Uber was a 5-0 vote, based on merits presented to us," Richardson said. "I don’t see how Scott could have guaranteed delivery of any votes. That’s where I’m befuddled.”

Tallahassee reacts:

Gil Ziffer, who stepped down from the commission after serving alongside Maddox since 2010, had a harsher view of the indictments.

"I have not read the indictment,” Ziffer said, “but having seen the overall implications I'm pissed that one of my colleagues would be conducting the people's sacred trust in such a manner.”

Investigation ‘ongoing’

During the federal court proceeding, Stampelos ordered Maddox and Carter-Smith to surrender their passports and refrain from any contact with current or former employees of Governance or witnesses and victims in the case. Stampelos also told them not to discuss the case with anyone except their lawyers.

“The purpose of this is to not put you or others in the unfortunate circumstance of obstruction of justice,” Stampelos said. “Don’t talk to anybody about this case. You’re going to do yourself harm if you do so.”

Dobson asked the government to disclose individuals who were listed but not named in the indictment so Maddox and Carter-Smith can avoid any contact with them. Stephen Kunz, the assistant U.S. attorney, initially objected.

“The investigation is ongoing with respect to these matters,” Kunz said, adding that releasing the names could impair the investigation.

“If they haven’t finished it, they can at least tell us who they can’t talk to,” Dobson said.

Kunz agreed to release the names. It wasn’t clear whether the names would be released publicly or just to the defense team.

The U.S. Attorney’s Office noted that the indictment constitutes mere allegations and is not evidence of guilt.

“All defendants are presumed innocent and entitled to a fair trial, during which it will be the government’s burden to prove guilt beyond a reasonable doubt,” the office said.

Contact Jeff Burlew at jburlew@tallahassee.com or follow @JeffBurlew on Twitter.

The charges

1 count of Racketeering Conspiracy

2 counts of Bank Fraud

4 counts of False Statements to a Financial Institution

7 counts of Extortion

8 counts of Wire Fraud

4 counts of Mail Fraud

9 counts of Bribery

2 counts of Making False Statements

1 count of Conspiracy to Defraud the U.S.

6 counts of Filing False Tax Returns

Anatomy of an FBI Fakeout: