September 7, 2011
Department of Justice
United States Attorney William C. Killian Eastern District of Tennessee
MAYNARDVILLE RESIDENT PLEADS GUILTY TO POSSESSION OF COUNTERFEIT SECURITIES AND MONEY LAUNDERING
KNOXVILLE, Tenn. - Joan Black, 66, of Maynardville, Tenn., pleaded guilty today before U.S. District Judge Thomas W. Phillips, to one count of possession of counterfeit securities and one count of money laundering. Sentencing has been set for January 11, 2012.
According to a filed plea agreement, Black admitted that as early as October 2007, she began soliciting investors to purchase annuities through her company, Benefit Capital, Inc. Black told investors that the annuities were issued by an insurance company in Galveston, Tex., and were guaranteed to pay an annual interest rate of 10 percent. However, she admitted that the annuities she was marketing were bogus and were not issued by the insurance company. Black went to a printing company in Knoxville, and had fictitious annuity portfolios bearing the name and corporate logo of the Galveston insurance company printed without their knowledge to further the investment scheme.
Black also admitted that from October 2007 though at least December 2008, she was paid approximately $673,500 by five different investors. Instead of investing those funds, she deposited them into a bank account she controlled and converted the funds for her own personal use.
“These financial fraud crimes are harmful to the victims. Regardless of the manner of the scheme, it was simply theft of large sums of money from people who thought they were investing in a legitimate enterprise,” said U.S. Attorney Bill Killian.
This investigation was conducted by U.S. Postal Inspection Service and IRS Criminal Investigation. Assistant U.S. Attorney D. Gregory Weddle represented the United States.