published Thursday, October 31st, 2013

Son of Jack E. Brown says he wasn't involved in dad's alleged Ponzi scheme

The son of late tax preparer and apparent Ponzi schemer Jack E. Brown apologized on his father's behalf to a group of creditors today, and claimed he had little to do with his father's ruinous financial dealings.

Jason Brown, who now works at an auto shop to make ends meet, testified in a morning meeting that he had urged his dad to apologize, but the elder Brown had declined to apologize directly to victims, right up until he passed away earlier this year.

"I'm very sorry for what he did to you," Jason Brown said. "We're in the same boat as you are now. We've lost everything. My daddy was my life, all my life."

Jason Brown pushed back on questions from bankruptcy trustees who have said in court filings that he was intimately involved in the dealings of Brown's Tax Service, which trustee Jerry Farinash has said was a front for a wide-ranging Ponzi scheme.

The younger Brown drew a large salary which the trustee said did not match his duties at the firm, including hundreds of thousands of dollars that were not reported to the IRS. Brown now says those were gifts, and have been retroactively reported to the authorities.

No charges have been filed in the case, which has been ongoing for almost a year.

The tax service used information from victims' tax returns to determine who was capable of becoming an "investor" in the business, Farinash said. While some investors were paid back using money from other investors, many never received a dime and have lost hundreds of thousands of dollars. For some of the widows and retirees affected by the scheme, the loss represents their entire life savings.

"The trust I had with him was a lifelong trust," Brown said of his father. "He was a man of gold all my life. I understand now that those notes and was was brought up wasn't the right thing to do."

Testimony will continue this afternoon.

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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