Woman Who Invested Almost $700,000 With Browns Files Suit Against Jason And Kim Brown, Office Staff, Bank, Insurance Firm

Thursday, July 11, 2013

A woman who invested almost $700,000 with the now-defunct Brown's Tax Service in Soddy Daisy said she was talked into signing up for an annuity plan that would not mature until she was 115 years ago.

Margie Y. Elliot also said that Jack Brown induced her to make numerous withdrawals from the annuity even though there were large penalties and tax losses each time that she did not know about.

She filed suit in Chancery Court against Jason and Kimberly Brown, Ellen Brown, Angie W. Wilson, Soddy Daisy Money Express, ABC Daycare and Learning Center, Compumed Billing, Community National Bank and North American Company for Life and Health Insurance.

Chancellor Jeff Atherton signed an order to show cause and ordered the defendants to appear before him on Sept. 4 and show why there should not be an accounting of Ms. Elliot's funds.

The suit notes that Jack and Janet Brown cannot be sued because they have filed for bankruptcy. It says they and other defendants were part of a Ponzi scheme that took large amounts of money from a host of individuals - including many in the Soddy Daisy area where the Browns were located.

Ms. Elliot said the Browns prepared her taxes and learned that she had over $700,000 in investments.

Though she was already 68, she was talked into purchasing an annuity for $697,788.87 even though it would not mature until 2057.

The penalty for withdrawal was 18 percent the first two years, 17 percent the third year, 15 percent the fourth through seventh year, 14 percent the eighth year, 12 percent the ninth year, 10 percent the 10th year, eight percent the 11th year, six percent the 12th year, four percent the 13th year and two percent the 14th year.

The suit says that type annuity with high early withdrawal penalties "is the type of annuity that earns the highest commission to the agent of North American that is selling the policy."

It says, "There was no need for an annuity that was 47 years to mature because in 47 years she would be 115 years old were she to live that long and she knows of no one that has lived to the age of 115."

The suit says Ms. Eliot was talked into making withdrawals of $37,500, $37,500 and $41,176 to invest with Jack Brown. She had penalties of $7,500 each time as well as tax liabilities.

It says funds from investors were diverted to Brown officials, including Jason Brown, son of Jack and Janet Brown. The suit says he was paid $52,000 in salary, a housing allowance of $26,400 and bonuses as much as $385,500.

The suit says Community National Bank knew of the Brown operations, but "the bank deliberately ignored the Brown Ponzi scheme because the account was generating fees, the Browns had individual or joint accounts with the bank, which increased their deposits and that allowed the bank to loan more money based on its higher deposits."

It says the insurance company called Jack Brown to ask about an annuity policy stretching until the holder was 115 years old, but did not call Ms. Elliot to ask her why.

The complaint says Ellen Brown and Angie W. Wilson worked in the office and were also in on the Ponzi scheme. It says Ellen Brown is a sister-in-law of Jack Brown and Angie W. Wilson is the niece of one of the Browns. 

The suit was filed by attorneys Owen Maddux, Jerry Tidwell and W. Adam Izell.

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