JOHNSON COUNTY, Tenn. (WJHL) — The owner of Sunset Gardens Assisted Living Facility in Mountain City was arrested Monday at her place of employment, the Central Office of Johnson County Schools, and charged with various drug offenses, identity theft, child endangerment and more.

According to a news release from the Tennessee Bureau of Investigation (TBI), Wendy Henley, was arrested after an investigation by the TBI’s Medicaid Fraud Control Division and the Johnson County Sheriff’s Office.

Henley is listed on the Johnson County Schools website as its School System Nurse Practitioner. Johnson County Schools provided the following statement:

On March 17, 2025, Johnson County Schools learned of the criminal indictment of a school system employee, Ms. Wendy Henley.  Johnson County Schools has no information that the charges relate in any way to Ms. Henley’s role with the school system, and we have already received her notice of resignation, effective immediately.  As Johnson County Schools will play no role moving forward in terms of either prosecuting or proving the criminal allegations levied against Ms. Henley, however we would refer all further questions on this matter to the District Attorney’s office.

Mischelle G. Simcox, Ed.D; Director of Schools

The investigation reportedly began after authorities received a referral from Adult Protective Services regarding allegations involving Henley last summer.

During the investigation, agents found that Henley allegedly used a patient’s insurance benefits card to purchase items for the facility.

“In July, when agents and Adult Protective Services visited the facility to speak with Henley, they discovered that seventeen residents, including two hospice patients, had been left in the care of two juveniles who were not authorized to provide direct patient care,” the TBI reported.

The facility was then evacuated and residents were transferred to other local facilities.

On Monday, a Johnson County Grand Jury returned indictments charging Henley with the following:

• Two counts of Identity Theft
• Two counts of Financial Exploitation of a Vulnerable Adult
• Possession of Schedule II Drugs
• Two counts of Possession of Schedule IV Drugs
• Possession of Schedule V Drugs
• Two counts of Child Endangerment
• Reckless Endangerment

According to the Tennessee Department of Health, Henley has faced disciplinary action before. On the state’s website, a past action states:

“in September 2022, while managing Sunset Gardens Assisted Living as owner and operator, Licensee removed controlled substances as well as other medications from Sunset Gardens and took them to her home. Licensee claimed she did this to prevent theft. Guilty of unprofessional conduct; to wit: unauthorized use or removal of narcotics, drugs, supplies, or equipment from any health care facility, school, institution, or other workplace location.”

Tennessee Department of Health past action report

The following action was taken, according to the Tennessee Department of Health:

“RN license and APRN certificate suspended with terms; suspension stayed; license placed on probation for no less than three years beginning May 30, 2023, and to run concurrent with TNPAP; must obtain continuing education hours.”

Tennessee Department of Health past action report

Henley was arrested and was being held in the Johnson County Jail on a $25,000 bond, as of Monday. News Channel 11 reached out to Johnson County Schools for a statement but has not yet received one.