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."



Early Morning Fire Damages Hixson Home

Fire caused substantial damage to a Hixson home early Saturday morning. Fortunately, no one was injured. The Chattanooga Fire Department received the alarm at 3 a.m. and responded to 6208 North Innsbrook Drive with five fire companies. Battalion Chief Charles Patten said smoke and flames were visible in the attached garage when the first firefighters arrived. The two ... (click for more)

Marcus Davis Shot On Walker Avenue Friday Night

Marcus Davis, 25,  was shot Friday night on Walker Avenue. At approximately 10:52 p.m., Chattanooga Police responded to the 1900 block of Walker Avenue on a person shot call.  The victim suffered a gunshot wound to the left knee, and was transported to a local hospital with the non-life-threatening injury. Chattanooga Police ask anyone with information regarding ... (click for more)

Mackey Should Be Thankful For The State Troopers On Highway 153

This is in response to a statement made by Warren Mackey at the commission meeting.  His question was to the mayor regarding the state troopers writing tickets on Highway 153, saying they were on a rampage.   It is apparent that Mr. Mackey doesn’t travel this highway.  His only concern was that the ticket money was going into state funds and not into county funds. ... (click for more)

Roy Exum: A Must-Read For Parents

If you have a child or if you love one, what you are about to read could be one of the most important lessons in your life. I have a great friend in Dallas – Sandy Pohfal – who regularly shares stories with me that are moving, inspirational or important. This is all three. This story was written by a celebrated author, Christie Craig. She has written hundreds of articles for ... (click for more)

Signal Mountain "Grounds" East Hamilton, 28-19

Signal Mountain was determined to run the football and take time off the clock Friday night in the second half of its 28-19 non-district victory over rival East Hamilton before a standing-room-only crowd at Hurricane Hill. “That’s our kind of football,” Eagles coach Bill Price said after the season opening game for both teams. “It was a tough football game and we just got out ... (click for more)

Maynor Leads Soddy Daisy Past Hixson, 49-36

If you wanted to see a lot of offense in a high school football game, then you should have been at  Soddy Daisy's Robert Talaska Field Friday night. Defense was all but non-existent on either side as the host Trojans took advantage of five touchdown passes from southpaw senior quarterback Hunter Maynor to outlast the Hixson Wildcats, 49-36. The last two minutes of the ... (click for more)