A former local insurance company claims representative, who had pleaded guilty in February to embezzling $2.4 million from his employer, has been sentenced to 32 months in federal prison.

Mickey R. Kendrick, 48, who said in court that he currently lives in Cosby, also was ordered on Monday by U.S. District Judge Ronnie Greer to spend three years on supervised probation once he completes his prison sentence.

Kendrick had faced a statutory maximum of 10 years in prison, a fine of up to $250,000 and up to three years of supervised probation.

But a pre-sentence report prepared by the U.S. Probation Department recommended an advisory sentencing guideline range for Kendrick of from 30 to 37 months in federal prison.

Assistant U.S. Attorney Neil Smith told the court during the sentencing hearing that the government recommended a sentence "at the top end" of the 30-to-37-month advisory guideline sentencing range.

In contrast, Assistant Federal Defender Tim Moore, who represented Kendrick, asked the court to impose a "fair" sentence that would be "as low as possible."

Judge Greer also ordered Kendrick to make $2.4 million restitution to the Tennessee Farmers Mutual Insurance Company at a rate of 10 percent of his gross income per month.

After listening to Kendrick express remorse for having embezzled the money and noting that Kendrick had cooperated with the FBI in its investigation of the case, Judge Greer said he was not going to sentence at either the top or bottom of the sentencing range.

Judge Greer announced that he felt a 32-month sentence would be appropriate.

Since it appeared unlikely that Kendrick can repay the money before his prison sentence and term of supervised probation end, Judge Greer said, it might be necessary to either extend the period of probation or to allow the amount owed to become a judgment against Kendrick.

Judge Greer also found that Kendrick did not have the ability to pay a fine.

Kendrick, formerly a local claims representative for Tennessee Farmers Mutual Insurance Company (TFMIC), had pleaded guilty in U.S. District Court in February to one count of an indictment that charged him with embezzlement by an agent and employee of an insurance company affecting interstate commerce.

Kendrick was indicted last October by a federal grand jury on 22 counts of embezzling money from his company.

At the time of his arraignment last fall, Kendrick had pleaded not guilty to all 22 counts of the indictment, which had alleged that he had embezzled "approximately $2.4 million" from TFMIC.

But in February, Kendrick changed his plea to guilty on count one of the indictment.

On Monday, Judge Greer said he would ask the U.S. Bureau of Prisons, in keeping with Kendrick's request, that Kendrick be allowed to serve his sentence at the federal prison in Manchester, Ky.

Kendrick was allowed to remain free on bond pending notification by the Bureau of Prisons to report to prison.

Kendrick is well known in local high school sports circles.

He served as supervisor of the Smoky Mountain Officials Association from 2001 to 2005.

As supervisor, Kendrick was responsible for assigning game officials to referee high school basketball games throughout Greene and surrounding counties.

Prior to that time, Kendrick officiated high school basketball games throughout East Tennessee.

Kendrick, according to the plea agreement filed in the case, was employed as a senior claim representative by TFMIC at the Chuckey district office from 1983 until his termination on or about March 23, 2006.

"As a senior claim representative, the defendant would handle property and casualty claims for and against TFMIC insureds, particularly claims arising from automobile accidents," the plea agreement said.

"As a senior claim representative, the defendant was authorized to issue checks in payment of claims drawn on an account of TFMIC at First Farmers & Merchants National Bank.

"After issuing a check in payment of a claim, the defendant was to have the retained copies of such checks placed in the claim files along with the supporting documentation for the issuance of the checks by the defendant, such as automobile repair bills, medical bills, and car rental receipts."

The plea agreement alleged that "from on or before May 2000 until his termination by TFMIC in March 2006," Kendrick issued, and caused to be issued over 400 checks for fictitious payments on claim files to embezzle money, funds and property from TFMIC."

During the Monday morning sentencing hearing, Judge Greer asked Kendrick what happened to the $2.4 million he embezzled.

Kendrick replied that he had none of the embezzled funds left. He maintained that all the money had been funneled through the Korner Market, a Tusculum Boulevard convenience store that he then owned. Kendrick said he sold the business in 2005, at which time the embezzlement stopped.

He also claimed that the money, in turn, had been taken from that business and spent by others who spent the funds on illegal drugs, house payments, vehicles and other expenses.

After Assistant U.S. Attorney Neil Smith pointed out to the court that an FBI investigation showed that Kendrick also had benefited personally from some of the embezzled funds, Kendrick agreed that he had paid for "hunting trips" with some of the embezzled funds.

Judge Greer pointed out that, on average, $40,000 to $50,000 per month had been funneled through the Korner Market by Kendrick and said he didn't find credible Kendrick's explanation for the money's disappearance from the business.

The plea agreement that Kendrick signed earlier this year said, "It was part of the defendant's scheme to embezzle from TFMIC that the defendant, using his authority to issue checks against TFMIC's accounts in payment of legitimate claims, issued and caused to be issued checks made payable to persons who had been legitimate claimants, usually for claim files that had been closed, for fictitious losses and claims.

"The defendant would forge or cause to be forged the endorsements of the named payees on the checks and would deposit the checks into bank accounts he owned or controlled, to include all accounts at Greene County Bank (now GreenBank) in the name of 'Korner Market,' a business in Greeneville, Tennessee, which the defendant then owned and controlled, converting the funds to his own use and benefit."

Kendrick said he sold the Korner Market in 2005. Its current owners have no connection to Kendrick, federal officials said.

Kendrick, according to the plea agreement, "would offer explanations and excuses to other TFMIC employees as to why there were no supporting documents for the fraudulently-issued checks, often promising to provide the supporting documents at a later time."