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Mountain City Employees Indicted

Former Bookkeeper and Current City Recorder Both Face Charges

By Tamas Mondovics


An investigation by the Tennessee Comptroller’s Office has resulted in the indictment of Donna Nelson, a former bookkeeper, and Sheila Shaw, the current recorder for the Town of Mountain City in Johnson County. 

Based on the investigation, on July 15, 2022, the Johnson County Grand Jury indicted Nelson on one count of theft over $2,500 and one count of official misconduct. Shaw was also indicted on one count of official misconduct.

Mountain City Mayor Jerry Jordan officially suspended the city recorder on Thursday, July 21, 2022.

A release from Mayor Jordan posted on the town’s Facebook page states, “Sheila Shaw has been suspended until further notice due to her being charged with official misconduct.” It also states that “the decision to suspend Shaw must be confirmed by the city council at its meeting on August 2, 2022.”

According to the Tennessee Comptroller’s office, the investigation of Nelson and Shaw began after Mountain City officials identified several questionable transactions.

Investigators determined that Nelson stole at least $3,959.71 from the town between July 2017 and September 2021.

“One of Nelson’s responsibilities included collecting payments for water and sewer services. Occasionally, customers’ payment checks were unable to clear because the customer’s bank account did not have an adequate balance to cover the payment. These insufficient funds payments were known as “bad checks.” Nelson would then collect money from these customers in order to settle their accounts.”

Investigators also said that Nelson kept at least $2,369.71 in town collections by failing to remit repayments made by customers who had initially submitted bad checks. 

In May 2019, $92.99 in cash was collected to replace a customer’s bad check, but officials said that “Nelson kept $90 for her personal use from this transaction.”

She is also accused of cashing 11 personal checks from herself or her family members totaling $1,260 from the town’s cash drawer, which the bank later returned for insufficient funds. 

The Comptroller’s report added that Nelson did not repay “these bad checks to the town, nor did she pay the town’s $30 returned check fee, which totaled $330.” 

Investigators also questioned 10 other repayments for bad checks totaling $1,142 that were never deposited into a town bank account; however, town records did not include adequate documentation to determine conclusively that these funds had been repaid.

Nelson resigned from her position with the Town of Mountain City on September 30, 2021.

The Comptroller’s reports also stated that Mountain City Recorder failed to impose one of her duties by failing to deposit at least $5,582.63 in cash. 

“Shaw kept this cash in her office, and some of the money had been collected more than a year prior,” the report said, adding, “Shaw told investigators “she did not make deposits in a timely manner because she believed someone may realize what Nelson had been doing,”‘ the report said.

“Mountain City officials should establish clear procedures for how bad checks are handled,” said Comptroller Mumpower. “This includes developing a formal record of which customers’ payments have been rejected and when those customers have repaid the town. These records should help the town track and collect its debts.”

To view the investigative report, go to To view a map depicting Comptroller investigations, go to

If you suspect fraud, waste, or abuse of public money in Tennessee, call the Comptroller’s toll-free hotline at 800.232.5454, or file a report online at: Follow us on twitter @TNCOT and Instagram @tncot.