Janet Brown Gets Year In Federal Prison For Bankruptcy Fraud; Attorney Says It Was Her Late Husband Who Masterminded Ponzi Scheme

Thursday, June 19, 2014

Janet Brown was sentenced Thursday morning to serve a year in federal prison for bankruptcy fraud.

Her attorney, Mike Little, said it was her late husband, Jack Brown, who was the mastermind of a Ponzi scheme that authorities said bilked "investors" out of some $12 million.

He said, "Ms. Brown thought her husband was successful. Ms. Brown was fooled."

Prosecutor Perry Piper said Ms. Brown was active at Brown's Tax Service in Soddy Daisy, where "many people were bilked out of millions of dollars. They lost their life savings."

Judge Curtis Collier said he was not considering the Ponzi scheme, but he said the bankruptcy fraud was a serious offense. He said, "Our bankruptcy system cannot work if people are not truthful."

Prosecutor Piper said Ms. Brown stated under oath at a bankruptcy hearing that she had turned over all her jewelry. He said three days later she turned in a bag of jewelry worth about $25,000.

Attorney Little said Ms. Brown voluntarily gave up the jewelry. He said, "At the time her world was falling apart."

He said Ms. Brown was having to give 24-hour care to her husband, whose leg had been amputated. He said the couple lost everything after they were forced into bankruptcy and had to move to her sister's house.

Attorney Little said Ms. Brown has been working for a physician group while out on bond.

Ms. Brown said she wants to get out and help provide for her family, saying that is all she has left.

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 the bankruptcy.

The plea agreement says, "In 2013, the defendant was the subject of an involuntary bankruptcy petition filed under Chapter 7 (which is under Title 11 of the bankruptcy code), in the Chattanooga Division of the United States Bankruptcy Court for the Eastern District of Tennessee, No. 13-10281.

"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 turn 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."



Elmore Charged In Home Invasion After Victim Sees Him In Court With Woman Who Was Charged Earlier

Evan Alexander Elmore has been arrested in a Jan. 14 home invasion after the victim saw him sitting in court with a woman who was charged in the case earlier. Elmore, 22, of 6807 Hickory Lane, is charged with aggravated robbery and aggravated burglary. Briona Turner was arrested earlier after the victim told police a woman who previously spent the night several times at his ... (click for more)

Robinson Arrested After Multiple Shots Fired At Car On Foust Street

Police have arrested Darrell Lebron Robinson after multiple shots were fired at a car driving along Foust Street. Robinson, 33, of 221 Vreeland St., Red Bank, is charged with three counts of aggravated assault, reckless endangerment and vandalism. Two women and a man said they were in a black Cadillac Escalade on Tuesday when they noticed Robinson. They said he pointed ... (click for more)

Repeal Obamacare, Congressman Fleischmann - And Response

Chuck: I'm writing to express my strong opposition to the plan that is being rolled out by Paul Ryan to replace Obamacare. And as I'm writing this, I'm remembering all the times you and all of your Republican colleagues over the last six years campaigned on REPEALING  Obamacare and used that call to action as the basis for your reelection. And I'm also remembering the ... (click for more)

Roy Exum: You, The Bald-Headed Lady

You were wearing a pretty sweat shirt and blue jeans when I saw you outside the Infusion Center at Erlanger Hospital on Wednesday. You were the one who was nearly bald and I was the guy you greeted with a huge smile as we said hello in passing. You reminded me exactly of my brother Franklin. Years ago when chemotherapy began to rob him of his hair, Franklin was pretty devastated ... (click for more)

'Canes Bounce Back With 8-7 Win Versus Trojans

Soddy-Daisy one-hit East Hamilton on Monday in a 6-2 win. The Hurricanes gathered for a little chat after the game, and discussed their plight more before Tuesday’s batting practice. Apparently, a few words went a long way toward yanking the ‘Canes out of a slump starting the season. “The players and coaches talked after Monday’s game and we got some things ... (click for more)

Jones Sends Vols Through First Spring Practice Session

KNOXVILLE, Tenn. --  Tennessee took the field for the first of 15 spring practices on Tuesday , putting in two hours of work in helmets and shorts at Haslam Field. "I liked the energy. I liked our approach," said Vols coach Butch Jones after Tuesday's workout. "Everyone was trying to lead. That gets back to everyone can lead in their own way, shape and ... (click for more)