Tennessee Woman Gets 30-Year Sentence For Role In $20 Million Ponzi Scheme

A Tennessee woman - the only of six charged by authorities to stand trial rather than plead guilty - learned that she will spend the next 30 years in federal prison for her role in a Ponzi scheme that duped investors out of more than $20 million.  Joyce Allen, 67, received the sentence after a federal jury convicted her of ten fraud charges following a September 2014 trial.  The sentence is one of the longest ever handed down to a woman in a Ponzi scheme prosecution.

Allen operated J. Allen & Associates ("JA&A"), a Tennessee company which offered tax planning and preparation services.  In addition, JA&A was accused of soliciting its clients to purchase various annuity investments called offered through Benchmark Capital, Inc. ("Benchmark"), a company operated by Charles D. Candler.  According to authorities, Allen would identify current clients with significant assets, such as real estate or retirement accounts, and suggest that they could realize greater returns through an investment with Benchmark.  In many instances, investors were told that they could take out a loan against the equity in their real estate and use the resulting investment proceeds from a "Home Equity Annuity" to cover their monthly mortgage payments.  In total, the scheme took in $46 million from investors.

However, Candler and Benchmark were not operating a legitimate investment company, but rather were using incoming investor funds to pay returns to existing investors in a classic Ponzi scheme.  After funds began to dry up in early 2012, multiple federal agencies began an investigation.  Candler committed suicide in March 2012 in a Tennessee cemetery, and five individuals including Allen were indicted later that year.  In addition to Allen, authorities charged Sharon Thomas, an employee at JA&A; Brian Murphy, a former pastor who solicited investors; Tiffany Thompson, a Benchmark employee; Paulynn Wright, a Knoxville mortgage broker; and Dona Rector, also a Knoxville mortgage broker.  All five pleaded guilty, and received the following sentences:

  • Wright: 4 months
  • Rector: 2 years probation
  • Thomas: 25 months
  • Murphy: 45 months
  • Thompson: TBD

Allen was also ordered to pay over $20 million in restitution.  Her ability to pay restitution is unknown.

The original indictment against Allen is below:

 

Indictment of Joyce Allen and Sharon Kay Thomas (1)