NEWPORT, Tenn. (WVLT) - 59-year-old James Holt made his first court appearance inside the federal building in Greeneville.
The Newport police captain currently being held without bond until his trail date because the court ruled him a dangerous threat to society. He was also placed on suicide watch Wednesday night.
Investigators say they found an unregistered shot gun at his home and evidence that he purposely re-wrote his arrest reports.
Holt is facing two federal charges. One if them is carrying a hand gun during a commission of a crime. That could get him a minimum of five years behind bars. The second is the distribution of hydrocodone on May 27.
Holt will be back in court for a detention and preliminary hearing on Tuesday at 9:30.
The TBI says James Holt, a Captain for the Newport Police Department, bought and sold stolen goods at the store owned by his wife, Newport Alderwoman Kathy Darlene Holt.
Additionally, investigators learned James Holt bought and sold prescription drugs, including Hydrocodone and Xanax.
Some of those transactions happened while Holt was on duty and in a school zone.
The investigation also revealed another Newport Police Captain, Roger Lynn Schults, participated in the illegal activity, though in a lesser extent, while on duty.
Investigators further determined Kathy Holt was complicit with the operation and that the Holts’ son, Kenneth Trece Myers, was also involved.
Wednesday, a special Cocke County Grand Jury returned indictments for all four individuals, charging 59-year-old James Holt with 10 counts of Official Misconduct, 8 counts of Money Laundering, one count of Conspiracy to Commit Money Laundering, and 5 counts of Sale & Delivery of a Controlled Substance.
The Grand Jury indicted Shults, 54, on four counts of Official Misconduct and one count of Conspiracy to Commit Money Laundering. 50-year-old Kathy Holt was charged her with one count of Conspiracy to Commit Money Laundering and three counts of Money Laundering.
Finally, the Grand Jury indicted Myers, 31, on one count of Conspiracy to Commit Money Laundering. James Holt will soon be booked into the Washington County Jail. Schults, Kathy Holt, and Myers will be booked into the Cocke County Jail.
TBI also searched the Newport Police Department and Kathy Holt’s store, the Pit Stop Mobil Mart.
A detective captain with the Newport Police Department has been arrested by TBI and FBI agents.
James Finley Holt, 59, is charged with illegal distribution of drugs
and the possession of a firearm in furtherance of drug trafficking.
The affidavit alleges that Holt was selling hydrocodone and Xanax for stolen property.
Prosecutors say Holt was distributing drugs from his official Newport Police Department vehicle. On one occasion, they say he told an
individual working on behalf of law enforcement that he was going to pick up the drugs.
Agents of the TBI followed him directly to the Newport Police Department and straight back to the location where Holt delivered the drugs.
An initial appearance is scheduled for 10:00 a.m., Thursday, July 24, 2014, in U.S. District Court in Greeneville.