Ponzi scheme widow to begin one-year sentence in August

Ponzi scheme widow to begin one-year sentence in August

June 20th, 2014 by Ellis Smith in Business Around the Region

Brown's Tax Service

Brown's Tax Service

Photo by WRCB-TV Channel 3 /Times Free Press.

Janet Brown, wife of deceased Soddy-Daisy Ponzi schemer Jack Brown, will spend a year in federal prison for admittedly concealing assets during bankruptcy proceedings associated with a $12 million Ponzi scheme.

She pleaded guilty to one count of bankruptcy fraud for withholding $25,000 in jewelry from bankruptcy trustee Jerry Farinash, which carries a sentence of 12 to 18 months in jail with no possibility of parole.

During the exchange with Farinash in April 2013, the trustee asked Brown if she had turned over everything of value to the court, including her jewelry. She replied that everything had been handed over.

Farinash then showed a photo of Janet Brown wearing a necklace and asked where it was.

"I thought I gave you everything," she protested.

Brown invoked her Fifth Amendment right to remain silent and avoid self-incrimination 61 times during the hearing, avoiding questions about her role at Brown's Tax Service, which Ponzi victims allege was a front for a wide-ranging scheme to defraud windows and retirees out of their savings.

Janet Brown allegedly helped draw up documents and was complicit in the scheme to identify likely victims through their tax records, victims said.

But Brown's attorney, Mike Little, said that Brown was as much in the dark as anyone else, and was deceived by her late husband's actions. Little said that Brown wasn't trying to hide the jewelry, it simply slipped her mind.

"She realized about two days later that she had more, she turned it in of our own volition, but the damage was already done," Little said. "This was one act."

Though creditors are out more than $12 million as a result of the implosion of the apparent Ponzi scheme at Brown's Tax Service, the Brown family has suffered as well.

Jason Brown, whose signature appears on several documents connected with the scheme, has taken odd jobs around town and attempted to launch his own venture, Anchor Tax Service, to make ends meet. Janet Brown was forced to move in with family after the Brown's lavish compound, cars and outbuildings were sold at a bankruptcy auction.

Despite allegations against the Brown's business practices and questions about how they funded such a lavish lifestyle through a small rural tax service, the family enjoys support among many in the community, Little said

"She has strong relationships with her siblings, and she has a grown son and grandchildren who are dear to her," her attorney said. "Plus she had many friends in the community who said good things about her, she has a strong church behind her and has been employed through all this."

Brown's jail term begins Aug. 22.