An involuntary bankruptcy has been filed against the longtime operator of a Soddy Daisy tax business, and a string of investors are coming forward saying they are owed millions of dollars.
Acquaintances said Jack E. Brown and his family lived a lavish lifestyle in recent years, while promising investors a guaranteed return of at least 15 percent on money placed with him.
Brown's tax office on Dayton Pike closed abruptly last week. A sign on the door says it was due to health reasons.
The petition filed in Chattanooga Bankruptcy Court names Brown and Brown Tax Service and lists some of those owed money from an alleged pyramid scheme.
The list includes:
Carl Wayne Hixson and Michael Eric Hixson, Soddy Daisy $480,000
James R. Raulston Soddy Daisy $167,000
Randy Raulston Soddy Daisy $30,000
Carl Wayne Hixson Soddy Daisy $100,000
Pamela Hixson Soddy Daisy $40,000
Leonard and Janice Thompson Rockwood $30,000
Mary Cunningham Rockwood $400,000
Teresa Hagler Rockwood $24,000
Several investors said Brown gained their trust over many years of doing their taxes. They also knew that he was a leading member of the Church of God. A number of the investors are from church groups.
One woman said Brown, from doing her taxes, learned that she had gained a large amount of money from an inheritance. She said that years ago he got her to place some of the money in an annuity with an established national firm. She said that seemed a sound investment.
Then, last year, she said he approached her with an idea to make much more of a return with her money - a guaranteed 15 percent. She said she agreed to take her money out of the annuity. She was sent a check from the national company with a warning that there was a large penalty for early withdrawal and tax consequences. She said Brown told her he would get the penalty waived and that her earnings the first year would more than pay the taxes.
She said she agreed to sign the check over to Brown. She said she never got any kind of documentation or paperwork - just his word.
The woman said at first she received regular payments on the "investment," then the doors of the business suddenly closed.
Acquaintances said several members of the Brown family, including son Jason, are involved in the business.
They said they live in a gated complex just south of Sale Creek with two large homes. They said the property includes a "barn" that has a swimming pool, gym and theater. The property has extensive fencing.
Acquaintances said that when Jason Brown divorced and remarried "the family flew down to a Caribbean Island for the wedding."
Jack Brown has been hospitalized recently and is in declining heath, acquaintances said.