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."



Perdue Previews President Trump’s 1st 100 Days

Senator David Perdue (R-GA) previewed President Donald J. Trump’s first 100 days on CNBC’s “Squawk Box” this morning. Job One Is Getting Economy Going:  “Job one is getting the economy going again and getting people back to work. You'll see all this work on Obamacare first. Then there will be the tax package that will follow that. Following both of those will be the ... (click for more)

Rutherford County Man Arrested, Charged In Cannon County Deaths

Special agents from the Tennessee Bureau of Investigation have arrested and charged a Rutherford County man accused of killing two individuals and injuring a third in a Cannon County incident from over the weekend. At the request of 16 th  District Attorney General Jennings Jones, TBI special agents began investigating an incident that occurred on Jan. 14, on Choctaw ... (click for more)

Bakewell Mountain Community Thanks Commissioner Fairbanks

The residents of Bakewell Mountain want to formally thank Commissioner Randy Fairbanks for standing up for our community in protecting our property rights and families. He personally made several trips to our properties and homes to see how the proposed gun range would affect our daily lives with noise, traffic, and a decrease in property values. Sometimes the little guys need ... (click for more)

Roy Exum: Just One Year Later…

If I hadn’t actually seen it happen, I would never have believed it. Not only did I wonder if it could ever happen, more often than not my disgust and dismay of such rampant disorder has filled me with more gloom and doom than you’ll find in a liberal Democrat on this, Donald Trump’s Inauguration Day. But I have got to proclaim that Thursday night I have never been as proud of the ... (click for more)

Vols Promote Scott To OC; Canales New QB Coach

KNOXVILLE, Tenn. --  University of Tennessee football head coach  Butch Jones  announced today the promotion of  Larry Scott  to offensive coordinator. Additionally, Mike Canales has agreed to terms to become the quarterbacks coach and defensive backs coach  Charlton Warren  was given additional duties as special teams coordinator. ... (click for more)

Cleveland Wrestlers Whip Walker Valley, 60-12

The undefeated and top-ranked Cleveland Blue Raider wrestling team just keeps rolling along, winning the close ones and also winning the ones not so close. Thursday night at Walker Valley, the Blue Raiders recorded five pins, three technical falls and two forfeits in a 60-12 victory over the Mustangs. Those pins came from Bryce Pond, Colton Landers, Austin Sweeney, Dylan Jones ... (click for more)