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."



Latest Hamilton County Jail Booking Report

Here is the latest jail booking report from Hamilton County: AVIU, ALDRIN  3881 RUFUS RD MASON,  Age at Arrest: 31 years old Arresting Agency: Chattanooga CRIMINAL IMPERSONATION --- BIRO, ANDREW  5916 THURMAN LN HIXSON, 37343  Age at Arrest: 26 years old Arresting Agency: Hamilton County VIOLATION OF PROBATION (DISORDERLY CONDUCT) VIOLATION ... (click for more)

Cleveland Honored By Environmental Health Association

The city of Cleveland has been chosen to receive the 2016 Community Partnership Award presented by the Tennessee Environmental Health Association, Mayor Tom Rowland said Monday. The award is given to an individual or organization that has made significant impact either on the profession of environmental health or the environmental health of the community. This is the first ... (click for more)

Make America Good Again - And Response

“No people can be great, who have ceased to be virtuous.”   Samuel Johnson (1709 – 1784) Last week I witnessed first hand the 2016 Republican National Convention in Cleveland, Ohio. As I observed the happenings within the Quicken Arena, the one theme that continued to pop up again and again, was  Make America Great Again .  Of course, that being ... (click for more)

Roy Exum: Keep Mike Carter’s Genius

Mike Carter, who has just been chosen as the “Best Overall” member of the Tennessee Legislature by a group known as the Tennessee Forum and “Legislator of the Year” by Citizens for Home Rule, is truly both. A lawyer and then a Sessions Court judge for 8 ½ years, he is overwhelmingly favored to win a third term during next Thursday’s election and rightly so. While it is laudable ... (click for more)

Dunbar Promoted To Head Wrestling Job At Ooltewah

J.D. Dunbar had been promoted to head wrestling coach at Ooltewah High School. Dunbar, an assistant with the Owls’ mat program since 2012, becomes a head coach for the first time at the high school level. He replaces Bryant Blackmon, who recently resigned. The 36-year-old Dunbar is also the school’s strength and conditioning coach and assistant head football coach on ... (click for more)

Another Big Week For Chattanooga Football Club

More than 10,000 fans gathered at Finley Stadium last Saturday to see a 5-3 penalty kick win over Miami United.   CFC keeper Gregga Hartley made a save and scored the winning penalty kick, helping his team to advance to the national semifinals on Saturday.  They will host Sonoma County Sol at 7:30 in the comfy confines of "Fort Finley"  Chattanooga is the top ... (click for more)