Two East Tennessee women face federal charges for their alleged involvement in an investment fraud scheme that duped dozens of people out of tens of thousands of dollars.
Federal agents arrested Joyce E. Allen, of Louisville, Wednesday morning. She is the owner of the Blount County accounting firm J. Allen & Associates. Allen faces six counts of counterfeit securities. Defense attorney Ralph Harwell is representing Allen.
Sharon Thomas, of Knoxville, turned herself in also on Wednesday. Both Thomas and Allen face one count each of conspiracy to commit money laundering. Thomas is in the process of retaining defense attorney John Eldridge.
The arrests come after a multi-agency federal investigation into Knoxville-based Benchmark Capital, Inc. Their office was formerly located on Merchants Center Drive in North Knoxville; it has been closed for several months. 10News previously reported in March that the Internal Revenue Service-Criminal Investigation Division (IRS-CID) notified Benchmark's investors that they could be "a possible victim of a fraudulent investment scheme."
Benchmark was owned by Charles "C.D." Candler. He shot himself to death on March 1 while sitting in his car at the Greenwood Cemetery on Tazwell Pike in Northeast Knox County. That was days before IRS, FBI, and U.S. Postal Service agents raided Benchmark's Knoxville office, and another office in Greenville, SC.
Several investment companies, including Cornerstone Mortgage and Southern Bankers, both based in Greenville, SC, used Benchmark's services. The IRS-CID letter that was sent to dozens of Benchmark's investors across the southeast listed Allen's accounting firm, J. Allen & Associates, as a representative of Benchmark.
Both Allen and Thomas appeared before U.S. Magistrate Judge Clifford Shirley Wednesday afternoon in a Knoxville Federal courtroom. The hearing was an initial court appearance for both women after a federal grand jury returned the indictments against them.
Attorneys for both women told the judge they need more time to read through the indictment before their clients entered pleas. The indictment had been sealed until the end of the hearing on Wednesday afternoon. Both defendants saw the document for the first time in court.
"I think I know what she (Allen) will say, but I'd like her to have an opportunity to read the charges against her," Harwell told the judge.
Judge Shirley released Allen and Thomas without bond, but with a list of conditions. Allen is allowed to continue working at her accounting firm, with the stipulation that she handles no money or investments on behalf of her clients. She told the judge her primary job is as a tax preparer.
Both women are scheduled to appear in federal court for a formal arraignment on Monday, July 23.