Business assets of Ponzi scheme suspect sold in Bankruptcy Court - | Chattanooga News, Weather & Sports

Business assets of Ponzi scheme suspect sold in Bankruptcy Court

CHATTANOOGA, TN. (WRCB)  --  Jack Brown's former business was sold to the highest bidder in Bankruptcy Court Tuesday.

Patricia Simpson and her husband Gordon showed up Tuesday morning with a handful of other creditors. Simpson invested $188,000 with Jack Brown, money she'll never see again.

"Hoping and praying that there will be some money found, and we'll get something back for all our hard work," Simpson says.

It is Trustee Jerry Farinash's job to sell off what Brown owns, hoping to help investors get some of their money back. This time it's Brown's former tax business,  Brown's Tax Service.

"Other than hard assets like cars, tractors and things, this was the single largest other possible asset that we felt like was available," says Farinash.

After the first offer, the court took a break. Back in session Accountant Eric Pelton came up with a better deal.

"The offers they were talking about were quite low and we felt like, since we already have an office in Soddy Daisy, that we could improve on that," Pelton says.

The judge took Pelton's offer to pay back 31 percent of the gross revenue over four years. Farinash believes Pelton will likely keep many of Brown's 5,000 former clients.

"If he does that will be more funds available to pay the creditors of Mr. Brown," Farinash explains.

"We pride ourselves on giving a family their money's worth and respecting the fact they worked hard for their money," Pelton says.

However, for investors like Simpson it's too late.

"It's just heartbreaking when you know somebody and you love them and you just can't believe they'd do this to you let alone all these other people and there are a lot of people," Simpson says. "I guess we have learned a valuable lesson at 78 and 71 years of age."


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