"It was, federal authorities allege, 'an elaborate hoax,' a sophisticated and complicated scam that lasted more than 10 years.
By the time it began crumbling early last year, it had taken in more than $46 million, and cost investors more than $18 million, according to authorities the U.S. Attorney’s Office.
On Nov. 12, five women and one man who are accused of various roles in different companies linked to it are scheduled to go on trial in U.S. District Court. The trial date was set on Tuesday by U.S. Magistrate Judge Bruce Guyton.
Before any charges were filed, the main player, Knoxville businessman Charles D. “C.D.” Candler, took his case directly to the highest court of all.
In March 2012, as U.S. Postal
Inspectors, the
FBI
and the IRS were investigating Candler’s businesses, he drove his car into
Greenwood Cemetery on Tazewell Pike and shot himself to death. He is named in
the indictment as an unindicted co-conspirator.
Candler’s main business was Benchmark Capital Inc., which had offices on Merchants Center Boulevard in Knoxville and in Greenville, S.C.
State public records show Benchmark Capital Inc. was formed in 2001, but never filed an annual report. Two years after it was incorporated, its charter was revoked.
'The business purpose of Benchmark was to defraud investors by taking their funds in exchange for worthless and nonexistent investments, and paying a portion of funds received to earlier investors under the guise of dividends, interest and mortgage payments,' a federal indictment states.
The indictment outlines a series of sophisticated deceptions, including misleading websites, bogus IRS documents and a fake Benchmark parent office in Chicago, that mainly lured elderly retirees to invest the equity from their homes into bogus annuity investments.
Telephone calls to the toll-free number of the 'Chicago office' were answered by people in the Knoxville office. And the Knoxville office had a postal meter machine that was used to put a Chicago postmark on replies to investor queries made to Chicago.
The indictment states that in addition to those already arrested, there were other participants 'known and unknown to the grand jury.'
The six defendants are:
* Joyce E. Allen, owner of J. Allen and Associates, a Louisville, Tenn., accounting firm through which some Benchmark investments were sold. She is charged with conspiracy to commit mail fraud and wire fraud, conspiracy to commit money laundering, and uttering a counterfeit investment document.
* Sharon Kay Thomas, an employee of Allen’s firm. She is charged with conspiracy to commit wire fraud and conspiracy to commit money laundering.
Allen and Thomas, the first defendants charged, were arrested in July of last year. Last month, the other four defendants were charged in a superseding indictment that adjusted some of the charges against Allen and Thomas.
* Brian K. Murphy, former pastor at Browns Gap Baptist Church in North Knox County and gospel singer. He currently operates the Knox Gold Exchange in Powell.
Murphy is charged with conspiracy to commit mail fraud and wire fraud, and conspiracy to commit money laundering.
Murphy was once president of Cornerstone Mortgage, a firm that shared space in Benchmark’s Knoxville office.
While he was affiliated at Cornerstone, Murphy 'actively engaged in the sale of worthless investments, including investments purportedly underwritten by Benchmark,' the indictment alleges.
The indictment also suggests that it was Murphy who came up with the idea of using the postal meter to bolster the image of a Chicago office.
State records show Cornerstone was formed in Virginia, and in 2000 it registered in Tennessee to do business under the name 'Cornerstone Mortgage and Investments Inc.'
By 2002, its Tennessee charter had been pulled for not filing an annual report.
Murphy was listed as the original registered agent for Benchmark Capital and Cornerstone Mortgage when they were incorporated in Tennessee, state records show.
* Tiffiny Thompson, who was an employee of Benchmark Capital.
The indictment says she was 'responsible for the day-to-day operations of Benchmark.'
Thompson faces charges of conspiracy to commit mail and wire fraud and conspiracy to commit money laundering.
* Paulynn Wright, a Knoxville mortgage broker. She is charged with conspiracy to commit mail fraud and wire fraud.
* Dona Rector, also a Knoxville mortgage broker. She is charged with conspiracy to commit wire fraud.
All of the defendants are free on their own recognizance pending trial."
