A federal criminal indictment has been returned against two men who authorities say swindled some 258 investors out of more than $5 million. Among the alleged victims were a number of prominent Chattanoogans.
The indictment charges Douglas Dyer and James Brennan with wire and mail fraud as well as tax evasion.
Dyer, a former president of the Chattanooga Quarterback Club, is also charged with willfully disobeying an order of Federal Judge Travis McDonough.
The SEC announced in late July of last year that it had won a court-ordered asset freeze to halt "an ongoing fraud by two former Chattanooga brokers with disciplinary histories who allegedly raised more than $5 million from investors without using the money as promised."
The SEC said Dyer and Brennan sold purported shares in eight similarly named companies to more than 240 investors nationwide since 2008 without ever registering the stock as they promised. Instead, according to the SEC’s complaint, Brennan and Dyer transferred investor funds into their personal accounts or those belonging to their wives. The number later climbed to 258.
The SEC action said over a five-year period that Carole Johnston Brennan received $30,000 of the funds and Alison Ford Dyer received $286,000.
SEC attorney Robert Schroeder said following publicity about the case that his office "was inundated" with people with complaints about the pair. He said some went back to 2003.
He said some complainants alleged that the pair sought individuals to send $7,500 and a video and they "could help them become stars."
An attorney acknowledged there are not enough assets to cover the millions investors are owed.
He said the SEC had been sent "tons" of financial data, but the SEC said it has not been told who sent what amount of money to Dyer and Brennan and where the money went.
Authorities said it appeared that money went into bank accounts, then was quickly dispersed out of the accounts.