A Trial Date Today

With their trial scheduled for today and looking for any report on the outcome, we had to post a story a little like ours.  It's a little dated but still work reading some excerpts below.  You can read the whole article at The Daily Times .  If you want to read some court documentation go to United States District Court

~ ~ ~ ~ ~ ~ ~ ~

All Maryville resident Kent Burleson wanted to do was retire comfortably.

Unfortunately for him, he was one of many investors who lost their retirement savings as part of an investment fraud case involving Louisville accounting firm J. Allen & Associates.

The firm’s owner, Joyce E. Allen, and her former employee, Sharon K. Thomas, are currently under an indictment by a federal grand jury for several counts of counterfeit securities, which also include conspiracy to commit money laundering, fraudulent investment control, fraudulent securities and fraudulent investment contracts. Thomas faces just one count of conspiracy to commit money laundering.

The arrests came after a multi-agency federal investigation into Knoxville-based Benchmark Capital Inc., a venture capital firm originating in Menlo Park, Calif. Its Knoxville office, formerly located on Merchants Center Drive, closed several months ago.  The indictment stated that “one of the business purposes of J. Allen Inc. was to identify potential investors through providing tax planning and tax preparation services, then defrauding those investors by selling them investments that Allen knew to be worthless.” Allen and Thomas are scheduled for trial on Sept. 25 in U.S. District Court in Knoxville.

Burleson was one of many investment victims who appeared during the pretrial hearing in Knoxville on Monday. He later spoke with The Daily Times about his frustrations of losing his retirement savings, which took him about 30 years to build as a lineman and splicer for AT&T.
“I first started with (Benchmark) in late March of 2009,” Burleson said. “I moved my pension over from AT&T from where I retired. I also moved my 401(k) over. From there on, I drew an interest check every month. The balance I put in there the first day is what the balance was three years later — it didn’t go up, it didn’t go down. That’s what I lived off of every month.
“The FBI froze the (investor) accounts. From there on, I haven’t drawn a penny, and I probably never will,” he added.

Warning signs
Burleson said understandably that it initially shocked him when he heard the news of the frozen accounts, and how he and other investors had lost their savings.  “I should have known something was going on,” he said. “In early January, the SEC (Securities and Exchange Commission) out of Atlanta called me and a few other investors and they asked me where Benchmark was investing this money, and I had no idea. If I had been smart, I would have gone over there and taken my money out. “What happened was me and one of the other investors went over (to Benchmark) the next day and we told Joyce Allen about the SEC calling me, and she told us everything was fine,” Burleson continued. “She said they were investigating some woman who had worked for her for a while for embezzlement. She told us we had nothing to worry about. That wasn’t true, because she knew something was going on. She knew the whole time.”

Burleson said that late last year, Allen talked him into refinancing his house and letting Benchmark borrow the equity.  “I made my house payments, insurance, taxes and all,” Burleson said. “I got a $67.50 check every month that I could use how I wanted to. They paid the mortgage for the first three months and then everything blew up and I had to pay it myself. When I first signed up, I owed $23,000 on my house, now I owe $76,000 and I have to buy it all over again. I loaned them the money, and now it’s all gone.”

‘Thoroughly investigate’
Burleson said that he works a part-time job, and they live off his wife’s disability income.  “When it came time to retire, I thought I had invested well,” Burleson said. “We got our knowledge from one of the other guys who retired. He’s been in that plan for 10 years. He told a few others, and we took him at his word. He thought (Benchmark) was on the up-and-up, too. I know six of us retired from the phone company invested with them, and that’s probably $3 million worth of investments. I lost $400,000 in cash. By the time I pay (my house) off, I’ll be dead.”

Burleson and three other defrauded investors have met with Knoxville attorneys, who are doing research on their behalf to see if there are any hidden funds that could be recovered, whether it be through insurance premiums or any accounts that are stored overseas. He said he will file a civil suit if more money is found.  “We have no idea where this is going to go,” Burleson said. “The charges brought against (Allen), if they find more money, whether they will bring up additional charges against her, we don’t know. But I hope they will.

Burleson concluded with a little advice for potential investors.
“Thoroughly investigate where you will put your money,” he said. “Talk to anybody to see if the company is on the up-and-up. I made a mistake and didn’t do that. Everything was running smooth and we figured if it worked good for (my colleague), we just basically stepped into it.”