LOUISVILLE (WATE) – The federal investigation of an alleged mortgage scam based in Knoxville could potentially involve millions of dollars in losses to dozens of customers.
Treasury department investigators from the IRS aren’t talking about this case, which involves several Knoxville area companies. But one investor was stunned when she received a letter from the IRS criminal investigation unit.
Joy Joines is proud of the home she and her late husband, Kenneth, built in a picturesque cove in Louisville. She calls it her “little piece of heaven,” but she now fears she may lose everything.
According to a letter from the IRS, Joy has been identified “as a possible victim of a fraudulent investment scheme.”
“When I called that mortgage company to find out what was going on, they told me, sell it or sign the house over to them,” she said.
Joy is familiar with several names in the letter: J. Allen and Associates, Inc., Benchmark Capital, Inc. and Benchmark Capital Investments LLC. Benchmark’s former office in North Knoxville is now closed.
Although the name Charles D. Candler (C.D. Candler) wasn’t familiar to Joy, on the afternoon of March 1 the investment company manager drove to Greenwood Cemetery in Knoxville and killed himself, according to police reports.
“Benchmark Capital is who my reverse mortgage come through,” Joy said.
She and her husband took out a reverse mortgage in July 2005 which enabled them to have access to a portion of the equity in their home. Two of her great grandchildren now live in that home. Joy has custody.
Supplementing her fixed income are the monthly payments Joy receives from the reverse mortgage. “J. Allen and Associates is who my husband went through to get the reverse mortgage,” she said.
To find out about the investigation, Joy says she visited Allen’s accounting office in Louisville. “They told me I won’t be getting my check anymore and I will have to make a house payment.”
Carl Bruner is a reverse mortgage specialist. He says people ages 62 and above with equity in their property, like Joy, are eligible. He doesn’t know Joy or any other parties involved in the investigation.
I asked Bruner, if a person with a reverse mortgage receives a letter saying she won’t be receiving her monthly payments any more and will have to make house payments, what does that mean?
“I would think she didn’t receive a reverse mortgage,” Bruner said. “Now they’ve flipped it on her. They want her to send money to them. I never heard of that product.”
As a potential victim of an alleged scam, Joy has been forced to hire an attorney to delay possible eviction over a mortgage she knows nothing about.
“I would love to have some answers. I’d like to be able to know that my house is not going to be taken away from me,” Joy said.
The number of potential victims of this alleged scheme is unknown, but reportedly the cost to people could run into millions of dollars.
6 On Your Side called Joyce’s attorney for comment Monday, but received no response. The IRS has not yet completed its investigation.