Bank Sues Tenn. Congressional Candidate for $1.8M

By ERIK SCHELZIG | Associated Press Writer

NASHVILLE, Tenn. (AP) - Republican congressional candidate Monty J. Lankford and his medical equipment company are being sued for $1.8 million for what a Tennessee bank calls fraudulent practices.

Lankford is running against incumbent Democratic Rep. Lincoln Davis in the 4th Congressional District.

The lawsuit filed in Davidson County Chancery Court earlier this week alleges that Lankford and TLC Medical Oxygen & Hospital Equipment Inc. last year secretly acquired assets from a Knoxville company that had put them up as collateral in $2.2 million loan from the bank.

The First Tennessee Bank National Association lawsuit says the bank never gave permission for those assets to be sold.

Lankford, 52, lives in Franklin, just outside the 4th District which spans 24 counties from southern Middle Tennessee to northern East Tennessee. In a statement he called the lawsuit "bogus, meritless and politically timed."

"This bank made a horrible business decision, they know it and they're trying to get bailed out just like these Washington banks and financial institutions," he said.

"What's worse is that they have invested in Lincoln Davis, given him campaign cash, and he is the one driving this story because he knows that he could lose this race."

A political action committee run by First Tennessee's parent organization, First Horizon National Corp., has given $1,000 to Davis this election cycle. But overall the PAC has given $6,500 to Democrats and $9,000 to Republicans.

Davis campaign spokesman Jon Boughtin dismissed what he called "conspiracy theories" from Lankford.

"Mr. Lankford's legal troubles with fraud and conspiracy may be inconvenient for his political ambitions, but they are for a judge to decide," Boughtin said in an e-mail. "Any attempt to blame our Congressional Campaign for the filing of this suit is baseless and pathetic."

The bank alleges that Lankford bought MMS Inc. assets from owner Elizabeth C. Sweeden in October and November of 2007. Lankford planned to make Sweeden an executive in his company after she transferred the rest of her company's assets to TLC and closed down her own business, according to the lawsuit.

"Defendants have been unjustly enriched and have effectively deprived (the bank) of its security interest in the MMS Collateral," the lawsuit states.

A 2007 federal tax return filed by MMS indicates that the company sold assets from its Chattanooga and Nashville locations to TLC for $1.12 million.

Lankford and TLS acted with "with malice and improper motive or means," to interfere with the bank's business relationship with MMS and Sweeden, according to the lawsuit.

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