KNOXVILLE (WATE) – Six defendants in the Benchmark Capital fraud case face a Nov. 12 trial in U.S. District Court.
The trial date was set Tuesday during a hearing before U.S. Magistrate Judge Bruce Guyton.
A federal indictment alleges that defendants Joyce Allen, Sharon Kay Thomas, Brian Murphy, Tiffiny Thompson, Paulynn Wright and Dona Rector had various roles in a scheme that began in 2000. The scheme led numerous victims to invest the equity in their homes in fraudulent investments.
Allen pleaded not guilty Tuesday to charges of conspiracy to commit mail, wire fraud and money laundering.
Kay Thomas pleaded not guilty to conspiracy to commit wire fraud and money laundering. Allen and Thomas two were initially indicted in July 2012.
Murphy, Thompson and Wright are charged with conspiracy to commit mail and wire fraud and money laundering. Rector is charged with conspiracy to commit wire fraud.
“To hear them say not guilty, and to hear them plead that, and knowing they are guilty,” said Joyce Joines.
Joyce Joines may never get justice. She worries now her Louisville house may be foreclosed. A bank is she saying she owes around $100,000 on it, even though she paid it off years ago.
Her husband Kenneth took out a reverse mortgage in 2005 before he died, believing it would give her income for life, along with $900 a month she receives from another retirement fund.
In 2012, PNC Mortgage wrote saying Joy was behind in her mortgage payment.
According to the court documents, there’s no evidence that any funds sent to Benchmark were ever invested in a legitimate annuity.
Joyce Allen’s Louisville-based accounting firm J. Allen and associates was part of the Benchmark scheme.
“Money out of my house was going to Benchmark, and she (Joyce) was collecting checks of it. How it was working, I don’t know,” said Joines.
Joines said Joyce Allen had been the couple’s accountant for 21 years, and says Allen, along with a family friend had referred the couple to Benchmark Capital.
It was a similar story for the 500 or so other investors.
Many of the investors live in Blount and Knox County, Tennessee, and others in South Carolina, Virginia and Kentucky.
“They were referred to by family members and relatives, co-workers, people they trusted, who told them the firsthand experience they have had with Benchmark,” said K.O. Herston, of Herston Law Group.
K.O. Herston is a Knoxville based attorney, who has worked on securities and fraud cases.
Last year, he was approached by around 30 or so investors who had been scammed.
“This was just a straight up garden variety Ponzi scheme,” Herston said.
According to the indictment, more than $42.6 million was invested in the Benchmark scheme, resulting in a net loss of more than $18 million to investors.
The scheme unraveled early last year, following the suicide of Charles Candler in March 2012.
One investor, Kent Burleson in Maryville, lost $437,000 after pouring his entire retirement savings into Benchmark, starting in 2009.
“I’ve lost it all, including that I have to pay my house all over again, and people won’t get that money back,” said Burleson.
In 2012, federal authorities seized around $2.2 million dollars in assets and from bank accounts tied to benchmark through Joyce Allen and the company’s operator Charles Candler.
In 1998, Candler was involved in fraudulent dealings in a company called CCI Builders, in which he was charged with theft in Anderson County.
The fear is the investors may never get what they lost.
“We’re talking about loses of tens of millions of dollars, ” said Herston.
Cornerstone Mortgage, headed by Brian Murphy, is also part of the scheme.
Murphy pleaded not guilty to fraud and money laundering charges.