published Sunday, September 8th, 2013

The dual lives of Soddy-Daisy's Jack Brown come to an end

ABOUT THIS STORY

Staff writer Ellis Smith has been covering the inquiry into Jack Brown's financial affairs for more than 10 months. He has conducted dozens of interviews with Brown's neighbors, acquaintances, clients and law enforcement officials. He also has reviewed court and tax documents related to the case. This story is the result of the entirety of that reporting as well as attendance at Brown's Sept. 3 funeral.

Funeral speeches are supposed to include certain words. The deceased was a loving father. An adoring husband. At peace now.

But there are other words that require a little more faith to digest. The deceased was a good person. He was honest. She went to heaven. Depending on the funeral, those words can furrow a brow, whiten a knuckle, or cause a crossed leg to nervously bob up and down.

Not so at the funeral of Jack Edwin Brown, the small-town tax preparer accused of swindling dozens of Soddy-Daisy residents. At the mention of heaven, cries of "Amen" drowned out any doubt that this man had passed the Pearly Gates.

To his friends, Jack Brown was a shining example of how to live. He loved to laugh. His smile was infectious. He couldn't utter three sentences without saying how much he loved his wife, Janet Brown. And he was proud of his son, Jason Brown, who worked at the family business.

Unfortunately, the family business unraveled in late 2012. Scrutiny by a bankruptcy trustee and several creditors indicates that Brown's Tax Service was a front for a family Ponzi scheme. The schemers identified likely victims by their tax records, then convinced them to fork over their retirement savings, the trustee claimed.

Many of the victims were widows and retirees who went to church with the Browns. They were neighbors, friends and sometimes family.

No charges have been filed, and the U.S. attorney declined to comment on, confirm or deny the existence of an investigation, though several victims reported they had been contacted by federal investigators.

Jack Brown died owing more than $12 million to people who thought they were investing their life savings with him. But his funeral isn't about recrimination and blame. It's about remembering the good times. It's about grace. If people can forgive Jack Brown, maybe they'll someday find forgiveness for their own sins.

"If Jack were standing here right now, he'd want to tell you that heaven is real," said Tony Wilson, the pastor at White Oak Baptist Church.

The proprietor of Brown's Tax Service made friends easily. He was generous. He sang in a quartet and occasionally preached at Sale Creek Church of God. He did the preacher's taxes. He did taxes for a lot of people at church. Sometimes, if a customer was short on money, he'd just do their taxes for free and tell them to make up the deficit when they could.

"That's the Jack we'll remember," wrote Betty Hankins on a memorial website for Brown.

The song, "I Can Only Imagine," pipes in over the loudspeakers. Some in the overflow crowd at Williamson & Sons Funeral Home hum along.

The family chose not to hold the service at the Sale Creek Church of God, where the Browns once attended. Neither Terry Bolton nor his son, Kenneth Bolton, preachers at the Church of God, spoke at the funeral.

The elder Bolton invested money with Brown. Others in the church followed his lead. Some got their money back, paid with interest out of funds from investors who didn't get their money back. Ponzi schemes only work as long as people keep paying into them. The early investors are paid back with the money from later investors, who often end up with nothing.

These types of details weren't brought up at the funeral. That was a different Jack Brown, and not one they wanted to remember.

"Jack loved to laugh," Wilson said.

The Baptist preacher told the story about the night he visited Brown in the intensive care unit. Brown had been sick for a while with a number of illnesses. His heart was failing, and he'd lost a leg. Brown could barely speak, but he motioned for Wilson to come over. After several failed attempts, Brown made the sign for a pen and paper. But in his weakened condition, his writing was no more legible than his words were audible.

"All I could make out was 'I almost,' and 'last night,'" Wilson recalled.

Wilson kept trying to understand, but to no avail. So the former tax preparer began a humorous pantomime. He cocked his head over to the side, closed his eyes and stuck out his tongue.

Jack was telling him he had almost died that night, in a funny way. Wilson wanted to laugh at the funny face Jack was making, even though the subject matter was serious.

"Then he held up two fingers," Wilson said.

Brown had almost died twice, and already he was trying to make his friend chuckle. Back at the funeral, the mourners begin to laugh, softly at first but soon spreading to the overflow room at the back of the chapel. Even in death, Brown had a way of making people smile.

"There was a brightness surrounding Jack," Wilson said, as people nodded.

Aside from Wilson's soothing words and spiritual exhortation, there's little earthly reassurance for Jack Brown's family. He didn't leave them in very good shape, financially.

An investigation by bankruptcy trustee Jerry Farinash tied Jack Brown's wife and son to the scheme to defraud investors. They both worked out of the office and ran things when the family patriarch was in the hospital, and profited from what Farinash called a Ponzi scheme.

Less than a year after the scheme came to light, the family's mountainside retreat, including two mansions and a sports barn, are wrapped up in litigation. Their horses no longer roam the rolling hill next to U.S. Highway 27. The grass has grown almost tall enough to obscure the semi-trailer in Brown's former front yard with the word "auction" painted on the side. Most of the four-wheelers, recreational vehicles and automobiles are sold or seized. Janet Brown had to turn over her jewelry.

Jason Brown is trying to start his own tax service. It's named Anchor Tax Service -- A.T.S. for short -- and is offering 10 percent off personal income tax returns.

"Sorry I missed you last year," a flier says. "I am looking forward to serving your income tax and bookkeeping needs again."

But Jason Brown's attempt to follow in his father's footsteps has run into flak. Some wonder how a person whose signature appears on some of the family's questionable investment documents can be allowed back into an accounting office.

"It doesn't make sense, don't none of it make sense," said Jean Barnes, who is owed tens of thousands of dollars. "You couldn't find anybody to say nothing against him until all this happened."

Jason Brown did not respond to requests for comment, and messages left with Anchor Tax Service were not returned.

At his previous job working for his father, Jason Brown received $542,000 in bonuses over three years, but neglected to report them to the Internal Revenue Service, according to bankruptcy filings. Jason Brown also received a $52,000 yearly salary and a $26,400 yearly housing allowance for "preparing $40 tax returns and doing some light bookkeeping," wrote Farinash in a bankruptcy filing.

"Jason Brown has no formal education in accounting and is not a licensed accountant of any nature," Farinash wrote. "His work at Brown's Tax Service did not require him to have a residence and there was no reason for him to receive a 'housing allowance' other than to further enrich him from the proceeds of the Brown Ponzi scheme."

In fact, tax preparers aren't required to pursue any license whatsoever in Tennessee, according to an official at the Tennessee Board of Accountancy. As long as Jason Brown doesn't call himself an accountant or use the term CPA, he can legally prepare taxes.

Farinash wants to consolidate everything Jason Brown owns with the estates of his father and mother, who consented to the involuntary bankruptcy process and waived their discharge. That means the $12 million in debt will follow them for the rest of their lives, and any wealth they acquire could be seized to pay back creditors. Jason Brown has not cooperated in this process, according to court documents, invoking his Fifth Amendment right to abstain from incriminating himself.

Back at the funeral home, "Jesus Loves Me" begins piping in over the speakers. Ushers quietly herd the crowd toward the body of Jack Brown. Starting with the latecomers in the overflow room, mourners file past Brown's remains, then out a side door directly into the blistering afternoon sun.

In the simple coffin, Jack Brown's wrinkled hands are folded over his chest. He looks like a nice old man taking a nap.

As the mourners reach for their sunglasses to block the light streaming in from outside, they tell each other that Jack Edwin Brown was a loving father. An adoring husband. He's at peace now.

Contact staff writer Ellis Smith at 423-757-6315 or esmith@timesfreepress.com.

about Ellis Smith...

Ellis Smith joined the Chattanooga Times Free Press in January 2010 as a business reporter. His beat includes the flooring industry, Chattem, Unum, Krystal, the automobile market, real estate and technology. Ellis is from Marietta, Ga., and has a bachelor’s degree in mass communication at the University of West Georgia. He previously worked at UTV-13 News, Carrollton, Ga., as a producer; at the The West Georgian, Carrollton, Ga., as editor; and at the Times-Georgian, Carrollton, ...

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