11th-hour heart palpitations scuttle Ponzi scheme meeting

11th-hour heart palpitations scuttle Ponzi scheme meeting

January 8th, 2013 by Ellis Smith in News

Soddy-Daisy tax preparer Jack E. Brown

Soddy-Daisy tax preparer Jack E. Brown

Photo by John Rawlston /Times Free Press.

Accused Ponzi schemer Jack E. Brown suddenly experienced heart palpitations today as about 50 creditors waited in a basement room to hear his explanation of what happened to more than $12 million they are owed.

The former tax preparer was scheduled to testify over the phone at a creditors' meeting from his hospital bed, but bankruptcy trustee Jerry Farinash called off the hearing at the eleventh hour as Brown's blood pressure spiked to unsafe levels.

"Right before we started, [Brown] asked the nurse to come in and check his blood pressure," Farinash said. "She said he was indeed having heart issues. Whether he was able to manufacture that or not, I cannot confirm."

The medical emergency was somewhat irrelevant because Brown and his family have said through their lawyer that they intend to invoke their Fifth Amendment right not to incriminate themselves in response to all questions, Farinash said.

Brown's business empire, which he ran with his wife and son, owes millions to dozens of retirees and widows who gave their life savings to the family in exchange for informal promissory notes, court records show.

Instead of investing the money, the Browns spent lavishly on a lifestyle that included classic cars, large homes and a large gymnasium with arcade games and a full basketball court, according to accusations made by victims' attorneys.

Brown's Tax Service, which was the central hub for his operations, will be sold and the business records transferred to another tax preparer, Farinash said.

Victims will be able to access their tax records once the sale is completed.

Though no criminal charges have been filed, Farinash said to stay tuned.

"Patience is a virtue," he said.

See tomorrow's Times Free Press for more details