Louisville woman named in Ponzi scheme suit
By Robert Norris | (email@example.com)
A civil lawsuit filed in Knox County Chancery Court against a Louisville accountant alleges the financial advisor persuaded a Knoxville couple to invest in a Ponzi scheme that is likely to cost them about $1.7 million in investments.
The Knox County Chancery Court suit was brought by Bradley and Judith Barkhurst against Joyce Allen, whose office is at 3625 Vista Road, Louisville.
Benchmark Capital Inc. and Amparo Candler, widow of and representative of the estate of Charles Candler, are also named as defendants in the suit filed by Knoxville attorney Dudley Taylor.
Charles Candler, who was under fraud investigation by federal authorities, shot himself to death on March 1, according to the Knoxville Police Department.
In response to the lawsuit, Knoxville attorney Ralph Harwell filed a cross-complaint on behalf of Allen, owner of J. Allen and Associates Inc., against Benchmark Capital, Charles Candler and Amparo Candler.
The Barkhursts allege Allen learned about their real estate holdings when she prepared their tax returns. Allen suggested that the Barkhursts could make better use of the equity in their properties if they borrowed substantial sums against the value of those properties and invested those funds with Benchmark Capital over a period of years, according to the suit.
After the Barkhursts became concerned about the safety of their investments, Allen arranged for the couple to meet in 2011 with Charles Candler, who was presented as the principal behind Benchmark Capital, the suit alleges.
“Unfortunately, the assurances of Allen and Candler proved to be false. Plaintiffs have now learned that Candler and Allen used BCI as the investment entity for a Ponzi scheme. Plaintiffs were first made aware of this by postal inspector Wendy Boles and David Martin, special agent in the Criminal Investigation Division of the Internal Revenue Service,” the lawsuit says.
The suit also claims that authorities informed the Barkhursts there is likely to be little or no recovery of their $1.7 million investment. Allen and Candler are accused of engaging in fraud and intentional misrepresentations beginning in 2002 and continuing through 2011.
The lawsuit states Benchmark Capital has been administratively dissolved, and also that it was organized for the benefit of Charles Candler, the sole shareholder, although there is no public record to substantiate that.
The Barkhursts’ suit asks for three times their actual damages of $1.7 million for a total of $5.1 million, plus punitive damages of not less than $2.5 million.
In the cross-complaint, Allen alleges she was deliberately misled by Candler; Brian Murphy, an agent for Benchmark Capital, and Tiffany Thompson, who worked for Candler, about the legitimacy of the investments.
The cross-complaint, which does not name Murphy or Thompson as defendants, claims Allen’s husband lost his entire IRA investment with Benchmark Capital, that other family members suffered losses from their investments with the company and that she has lost clients because a conspiracy to fraudulently deceive her about Benchmark Capital.
Allen is seeking a judgment over the cross-complaint defendants and an amount not exceeding $500,000 for her personal loss, damages and attorney fees.