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Justice News

Department of Justice
U.S. Attorney’s Office
Eastern District of Tennessee

FOR IMMEDIATE RELEASE
Friday, January 13, 2017

Former Insurance and Annuities Salesman Sentenced to Thirty-Six Months for Scheme to Defraud Elderly Investors

CHATTANOOGA, Tenn. – On Jan. 13, 2017, John Allen Morris, Jr., 51, of Knoxville, Tenn., was sentenced by the Honorable Travis R. McDonough, U.S. District Judge, to serve 36 months in federal prison. Morris was also ordered to pay over $1.2 million in restitution to identified victims of his offenses.

 

In August 2016, Morris pleaded guilty to one count each of wire fraud, mail fraud, bank fraud, and wrongful use of a government seal, all charges contained in a May 2016 federal indictment.

 

A detailed description of his scheme to defraud is included in the plea agreement on file with U.S. District Court. The agreement provides that during 2005-2006, Morris was employed as an insurance and annuities broker with a legitimate insurance company. His scheme to sell fraudulent annuities to elderly clients then began in late 2006.

 

The scheme devised by Morris started with the establishment of two fictitious companies in which he convinced elderly clients to cash out legitimate annuities and invest in them, promising a higher rate of return. Morris created and provided his clients with imaginary elaborate and personalized financial statements reflecting the supposed status of their accounts. He established multiple accounts at various banks into which he would deposit investment checks from his clients, and later use these funds to pay off initial investors in a Ponzi-like scheme, as well as pay personal bills, buy material items for himself and his family and invest himself in his own ventures. These schemes included a Lamborghini car kit selling enterprise and “Football Tech,” a company created to train high school football players by attempting to attract prominent former NFL players and coaches into contributing to camps for kids based on Morris’s claims of his own football coaching expertise.

 

Agencies participating in this investigation included the Federal Bureau of Investigation, U.S. Postal Inspection Service, and Tennessee Department of Commerce and Insurance. Assistant U.S. Attorney Steve Neff represented the United States.

 

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Topic: 
Financial Fraud
Updated January 13, 2017