Jack Brown dies; at center of alleged local Ponzi scheme
A Hamilton County man at the center of an alleged ponzi scheme, has passed away. Jack Brown, who ran Brown's Tax Service in Soddy-Daisy, admitted to taking millions in investments and using the money to pay off other creditors.
Brown passed away Saturday. Before his death, he told bankruptcy trustee Jerry Farinash he planned to invest the money into stock via E-trade, but admits he began losing money in 2010, about a year after his health took a turn for the worst. As it stands, more than $10 million is owed to his creditors and investors. It is unclear how much money they will get back.
It has been almost a year since Brown's Tax Service suddenly closed down. Signs are still taped to the front windows, saying it shut down due to Brown's health issues. Also out front is a giant sign advertising an auction for Brown's assets. The auction has been postponed indefinitely.
"It's a shame that he did that to so many people," says Gordon Simpson.
Seventy-nine-year-old Gordon Simpson is one of Brown's victims. It is a spot he never thought he would be in. He says he knew Jack Brown for almost 30 years.
"Back when we first started, he didn't start out that way," he says.
Simpson says he had done business deals with Brown in the past and made money off of them. Simpson says he considered Brown a friend. Brown was even Simpson's Sunday school teacher at one time.
"He told a friend of mine that had some money invested that God gave him a real good gift of making money."
But Simpson says somewhere along the way Brown started making poor choices.
"He wasn't making money, he was taking money for a long time, that I didn't know anything about."
As for Simpson, he invested close to $750,000 with Brown. He was told he would see only three to four percent of that once the bankruptcy case is resolved, if he is lucky.
"We're not broke by any means, but we're kind of bent. Let's put it that way," says Simpson.
He just feels bad for those who now have nothing.
"One lady put $20,000 in there, she told me, and said that was all she had. Now she's having to borrow money to buy her medicine and stuff," says Simpson.
The auction of Brown's assets was scheduled for June and has yet to be rescheduled. We were unable to reach Jerry Farinash to ask when it would be rescheduled because of the Labor Day holiday.
Brown's service is set for September 3rd at 2p.m.at Williamson & Sons Funeral Home chapel.
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