Federal charges have been brought against Janet Brown in connection with a Ponzi scheme that resulted in the loss of over $12 million by a host of investors.
A bill of information was filed against Ms. Brown on a charge of bankruptcy fraud.
She has agreed to plead guilty and is facing up to five years in prison and a fine up to $250,000.
Her husband, Jack Brown, died last September. The Browns operated Browns Tax Service for many years in Soddy Daisy.
A large number of Brown tax clients said Jack Brown began offering to invest their money for them at an extremely high rate of interest. Then the tax office suddenly closed and the investors found they would not be paid. A group of them forced the Browns into bankruptcy.
The charge is that Janet Brown lied during a bankruptcy hearing when she was asked by Trustee Jerry Farinash if she was holding any more jewelry. She said she was not. However, three days later she turned over to her attorney, Tom Ray, a large bag of jewelry that was appraised at $25,000.
The plea agreement says, "The defendant testified at a meeting of creditors, under oath, that she did not have any additional jewelry (assets) hidden. That testimony occurred on April 16, 2013. The exact questioning was as follows: Jerry Farinash, the Chapter Seven Trustee, asked the defendant "have you turned over to me all of the jewelry that you own on the date that this involuntary bankruptcy was filed against you except for the three pieces that you just told me about?" Brown's answer was "yes." The three excepted pieces consisted of a golden wedding band, a high school ring and Janet Brown's mother's ring. Three days later, on or about April 19, 2013, the defendant turned over to her lawyer, Tom Ray, a bag containing a large amount of jewelry. Ray in tum
relinquished the bag of jewelry to the trustee, Jerry Farinash. During the meeting of creditors, the defendant affirmatively stated that she had disclosed and relinquished all of her jewelry, when in fact she had not turned over the jewelry, and she had knowingly failed to do so. The jewelry was subsequently appraised and it has an approximate value of $25,000. As part of this plea agreement, the defendant admits that she knowingly concealed the aforementioned bag of jewelry in an attempt to hide the jewelry from the bankruptcy trustee and the bankruptcy court."
The plea agreement says, "The defendant agrees to disclose fully all assets in which the defendant has any interest or over which the defendant exercises control, directly or indirectly, including those held by a spouse, nominee, or other third party."
Ms. Brown is represented by attorney Mike Little.