In one of eight lawsuits pending against Latitude 360 CEO Brent Brown, Tommy and Linda Tharp allege Brown solicited investment money from them with promises he could not, or never planned to, keep.
The 72-year old Mr. Tharp worked his whole life as a phone installer, a physically demanding position in the New Mexico heat, to save up enough for retirement. Yet now, even at his advanced age, Mr. Tharp must rise each day to install phones in the unforgiving heat in order to pay for the medical expenses he incurred during his recent bout with bladder cancer and subsequent infection.
Brent Brown, on the other hand, is the CEO of a publicly traded company who is said to make $356,000 annually. Each day when Mr. Brown rises, he is faced with the decision of whether to drive his Aston Martin or his Land Rover to work. This stands in stark contrast to the Tharps’ life, who must work each day in order to make monthly payments to the IRS in order to pay off the taxes incurred for clearing out their 401k at Brown’s behest.
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The couple first met Brown in 2005 when he was a stockbroker. He convinced the Tharps to invest the $300,000 they had been saving for retirement with him. Brown promptly invested the money in highly speculative, high commission products and the money disappeared within a few years.
After Brown lost their money the Tharps were distraught, yet still had some money left for retirement. They figured every investment carried risks, so they moved on and focused on what they still had. The couple lost contact with Brown until he reached out to solicit another investment in March 2010.
This time, Brown was seeking $100,000 for an entertainment complex. He guaranteed they would make a profit, claiming that the investment was a “sure thing.” In return for their money Brown issued a promissory note, yet provided no investment prospectus or any other documentation regarding the investment.
Over the next few months the Tharps consistently inquired about their money, but Brown claimed he was still raising the rest of the funds necessary for the entertainment center, and that once it was complete the money would be repaid quickly. However, his search for money came up short, and Brown once again returned to the Tharps.
The remaining $118,000 that the Tharps had in their 401K was removed, and transferred to the control of Mr. Brown who gave them another promissory note with the same terms as the previous one. Yet, these notes would hold little value once the entertainment complex went under.
How the Tharps are Fighting Back
The Tharps are hoping to recoup the money they lost with their lawsuit against Brown.
Had the ill-advised investments been avoided, the Tharp’s would have had the funds necessary to deal with the medical bills, and stay retired. However, the couple’s attorney, William Lewis of our Business Trial Group, pointed out that the Tharps lacked financial sophistication. “[T]hey didn’t have the knowledge base going into the investment and, simply, they trusted Brent Brown,” he said.
Although the fact that the Tharp’s trust was certainly misplaced does not constitute fraud in itself, Brown’s business ventures have left a trail of wreckage. The eight lawsuits totaling nearly $8 million, around $133,000 in unpaid taxes, millions in unpaid rent, and bounced employee checks suggest there is something much bigger going on than the unfortunate investments made by the Tharps.
Soon, though, Mr. Brown will be forced to confront these allegations in court.
Senior citizens (aged 65 and older) make up 13% of the country’s total population- 40 million people according to the most recent census. They are also the country’s most targeted group for fraud, and need to vigilantly investigate any investment opportunity.