5:20 p.m. City invites applications for vacant Maddox seat

Hours after Gov. Rick Scott suspended Commissioner Scott Maddox, city officials are inviting applications to fill his vacant seat.

Registered voters who live within the city limits can apply to fill the Commission seat on an interim basis by submitting a resume and cover letter for consideration.

"Seat 1 has been vacated following a suspension from the Governor's Office. This seat must be temporarily filled, with the selected candidate serving either through the remainder of the seat's term (Nov. 16, 2020) or until such time as the existing Commissioner is able to return to service, whichever occurs first, the City said in a statement.

4:21 p.m. Maddox removed from office

Gov. Rick Scott has suspended City Commissioner Scott Maddox, following his indictment on 44 counts of racketeering, bribery, extortion and bank and mail fraud.

3:36 p.m. update: Maddox, Carter-Smith plead not guilty, released until trial

Federal Magistrate Judge Charles Stampelos releases Scott Maddox, Paige Carter-Smith after both plead not guilty to 44-count racketeering, bribery and fraud indictment. Trial set for Jan. 14.

“The purpose of this is to not put you or others in the unfortunate circumstance of obstruction of justice,” Judge Stampelos said.

Stampelos ordered Maddox and Carter-Smith to stay in Northern District of Florida. He said that means no trips to Disney World or dinner outings to Thomasville, Georgia.

"We're going to fight this indictment tooth and nail," said Stephen Dobson, attorney for Maddox. "I sure don’t anticipate any kind of plea deal at all in this case.”

Maddox and Carter-Smith were ordered not to contact former or current Governance clients

Assistant U.S. Attorney Steve Kunz said the investigation is ongoing.

City Commissioner Scott Maddox, the former "boy mayor" and one of the city's most prominent politicians, was indicted by a federal grand jury on charges he shook down city vendors for bribes, pocketing hundreds of thousands of dollars in cash in exchange for official action.

Also charged in the 44-count, 66-page indictment was Downtown Improvement Authority Executive Director Paige Carter-Smith. The sealed indictment was handed down Tuesday, according to federal court records, and unsealed today once Maddox and Carter-Smith were in federal custody.

Maddox was arrested this morning by the FBI, according to court documents, which also said Carter-Smith was going to turn herself in. They were both in U.S. Marshal’s custody inside the federal courthouse, according to a source close to the case.

Both have an initial appearance scheduled for 3 p.m. today in federal court in Tallahassee. Both Maddox and Carter-Smith have made previous statements through their attorneys that they are innocent.

The latest:

"This is unsettling news, and I trust the legal system will set matters straight," Tallahassee Mayor John Dailey said. "We are committed to operating with full transparency and holding ourselves to the highest ethical standards. 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."

Dailey was expected to hold a news conference if Gov. Rick Scott decides to remove Maddox from office.

Neither Maddox nor his aide returned phone calls from the Democrat. Maddox appeared to delete his Facebook page over night. Carter-Smith also could not be reached for comment.

How the FBI's corruption probe began

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 shadowed 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.

It is not clear whether more charges will follow or others will be indicted.

Maddox’s indictment opens the door for Gov. Rick Scott to suspend Maddox from office, which would create a vacancy on the five-person City Commission. If Maddox were suspended, commissioners would have 20 days to appoint someone to fill his seat. If they don’t, the governor gets to make the appointment.

According to the federal prosecutors, Maddox, former mayor and ex-chairman of the Florida Democratic Party, conspired with Carter-Smith to run two companies, Governance Inc., and Governance Services LLC, as one entity called "Governance."

Maddox in the middle:

What the indictment says about Maddox and Carter Smith

According to the indictment, "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."

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 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 of his that were 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 County 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 their members, 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 in the indictment, but not named. They include an architectural engineering firm being considered for water resources engineering, a ride-sharing company believed to be Uber that weighed in 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 the Community Redevelopment Agency boundaries.

"LOVE IT WHEN A PLAN COMES TOGETHER"

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.

Between May 2012 and October 23015, Company A paid Governance $61,500.

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!"

Company D paid Governance $146,000 between November 2012 and October 2017.

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."

That company paid Governance $138,000 between November 2012 and March 2017.

UNDERCOVER DEVELOPER

The indictment said Carter-Smith sent the company, Southern Pines, a consulting agreement in December of 2016, offering to provide marketing and government consulting services for $10,000 a month. Around that time Maddox took a trip to Las Vegas with the company's representatives.

Back story:FBI Fakeout? Southern Pines Development site offers promises but no substance

"During this trip, Maddox told an anecdote about threatening to destroy a former client's business deals if the former client did not pay Maddox his fee," the indictment said.

More:What happened in Vegas? Photo emerges of Maddox with undercover FBI agents

ARMS' LENGTH RELATIONSHIPS

The indictment also said Maddox and Carter-Smith defrauded a bank 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 Street 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 202 W. Carolina,” the indictment said.

Maddox submitted a false “Arms-Length Affidavit” to BB&T on Aug. 22, 2011, and falsely said the buyer was not an agent, representative or owner of the seller and submitted a false statement that "the buyer was an unrelated party to SCM, a company owned by Maddox.

Similarly, Maddox bought 510 N. Adams for $550,000 in March 2007, using a commercial loan of $495,000 from BB&T. Governance and Maddox personally guaranteed the loan, and he submitted a declaration of limited liability as president of Governance. Maddox said he would promptly notify BB&T if any other person or legal entity acquires ownership of Maddox Acqusitions, which he failed to do when he sold Governance and Maddox Acquisitions to Carter-Smith in 2010.

The sale went through and BB&T forgave $129,503 of the remaining debt.

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. Again he filed a false arms-length affidavit, according to the indictment.

BB&T forgave about $133,000 of the remaining debt on the mortgage.

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.

How much jail time could Maddox and Carter Smith face?

The maximum punishment for the offenses they've been charged with include: 30 years for bank fraud and false statements to a financial institution, 20 years for racketeering conspiracy, extortion and honest service frauds, five years for use of interstate facilities in committing bribery, making false statements to a federal officer, and conspiracy to defraud the United States, and three years for making a false statement on a tax return.

The duo also face criminal forfeiture of any real and personal property that derived from the proceeds traceable to alleged violations in the first 35 counts, which deal with racketeering, bank fraud, and extortion. If any those properties and possessions can't be located or was sold or commingled with other property, the government will seek forfeiture of any other property in their possession.

Tallahassee officials react to the corruption charges

"I have not read the indictment 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," said former City Commissioner Gil Ziffer, who served with Maddox for six years before deciding not to run for re-election this year.

However, Ziffer said, he never saw anything on the commission to indicate that Maddox sold votes.

City Commissioner Curtis Richardson, who has known Maddox since he was mayor, said the news was very unfortunate and he would pray for Maddox and his family.

"It was expected," Richardson said of the news of the indictments. "It was just a matter of time. We'll see where it goes from here."

He agreed with Ziffer and 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.”

And the expansion of the CRA boundaries was not initiated by Maddox but by County Commissioner Kristin Dozier.

"I don't see where vote buying comes in," Richardson said.

He saw the indictments as the beginning of the end of a dark period for Tallahassee.

"We can begin to put this behind us and move forward as a city," Richardson said.

This is a breaking story. Check back for updates.

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