Alleged Ponzi scheme collapses in Soddy Daisy
SODDY DAISY, TN. (WRCB) -- Jack Brown with Brown's Tax Service in Soddy Daisy is in hot water after abruptly closing the business.
A sign that reads, "Due to health issues, Brown's Tax Service is closed as of November 6, 2012," is posted around the building. However, many wonder if that's truly the case. Court documents allege a Ponzi scheme.
Frankie Trantham had to see it for herself Friday.
"I know it has to be true, because I had money with him," says Trantham.
Trantham says she invested $20,000 with Brown, money she may never see again.
"That was the last $20,000 that I had and it really hurt," says Trantham.
According to Trantham and others who spoke to Channel 3, nearly a thousand investors trusted Brown with their money.
"It's sad that you trusted a man all these years, and then this happens," says Trantham.
The Soddy Daisy Police Department tells Channel 3 they received a number of complaints about Brown's Tax Service, but all they can do is pass along the information to the IRS. The IRS will not talk about specifics of an investigation.
Channel 3 obtained court documents from a Dayton attorney, who filed a motion Friday to ask that someone take over Brown's property. In that motion, a claim that investors gave Brown more than $4 million for stocks and securities.
The court documents also claim Brown used the money to purchase assets for himself and his family and tried to cover it up in an elaborate scheme.
Channel 3 was unable to reach the Browns Friday from behind their gated property near Sale Creek.
However, investors have plenty to say.
"Jack, I trusted you, I loved you. You said you loved me and your whole family did. I'm very disappointed," Trantham says.
Channel 3 learned Jack Brown has been extremely ill and is currently in the hospital. His son Jason helped run the business. Channel 3 could not reach him for a comment Friday.
The Soddy Daisy Police Department is encouraging anyone who used Brown's Tax Service and lost money to file a complaint at the department.