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'via Blog this'Some of the companies named in the federal investigation of an alleged multistate mortgage and investment fraud scheme have left trails of misinformation and deceit in public records and other documents.
And the now-deceased man linked to most of those companies, Charles D. "C.D." Candler, was accused 15 years ago of running a pyramid scheme and ultimately convicted of theft in cases unrelated to the current investigation.
The corporate charters for at least two companies linked to Candler or his Knoxville business address were revoked a decade ago. They had scant assets, but names very similar — and in one case, identical — to legitimate firms that disavow any connection to Candler. None was licensed to do business in Knox County.
Candler, 67, a former strip club operator and race car driver, has a documented history of slippery business practices, tax avoidance and bankruptcy. On March 1, shortly before agents from the FBI, IRS and U.S. Postal Inspection Service searched his office, he drove his Mercedes-Benz into a cemetery and shot himself to death.
He was the only individual listed in a letter from the IRS to potential victims of fraud by sellers of "various investments or investment products" under investigation. The others sellers listed were all business or corporate names: Benchmark Capital Inc, Benchmark Capital Investments LLC, "Cornerstone Mortgage" and "Southern Bankers."
Those names, or variations of them, are all linked to Candler's small rental office suite at 5941 Merchant Center Drive in Knoxville, or an office in Greenville, S.C., also linked to him. Both offices are now closed.
The letter also listed J. Allen and Associates, an accounting firm in Blount County. Owner Joyce Allen is listed as a representative of Benchmark on some Benchmark documents.
A now defunct website — www.benchmarkcapital.org — appeared to be that of a Chicago-based Benchmark parent company. Candler is the registered owner of that website, which listed only a post office box address. A Chicago street address of 222 South Riverside Plaza is listed on a corporate Christmas card sent to an investor by Benchmark Capital Inc.
"That name doesn't even sound familiar to me," said a manager in the Chicago office of Behringer Harvard, the firm that operates the 35-story office complex at that address. He referred all other questions to Behringer Harvard corporate offices.
The registry that names Candler as owner of the website lists the technical support person as Tiffiny Thompson, with the same Merchant Center Drive address.
Thompson did not respond to repeated attempts to contact her for an interview.
Candler's corporate jet was registered to a nonexistent company, J Allen Inc. That name is nearly identical to the domain name for the website of J Allen and Associates. Through her attorney, owner Joyce Allen said she was unaware Candler had registered the plane in that name and that he had not even asked her if he could.
Benchmark Capital Inc. was formed in Tennessee in 2001 with the stated purpose of giving "excellent service and value to customers and clients by providing various financial and investment services and products, (including but) not limited to investment counseling and annuity investments."
The firm never filed an annual report. Two years after it was incorporated, its charter was revoked.
Cornerstone Mortgage Inc. was formed in Virginia in 1992. In 2000, it registered in Tennessee to do business under the name "Cornerstone Mortgage and Investments Inc." By 2002, its Tennessee charter had been pulled for not filing an annual report
It is not clear from available records exactly when Candler became associated with the Benchmark and Cornerstone names. When those names were incorporated in Tennessee, Brian K. Murphy was listed as the registered agent for each.
Murphy is the former pastor at Browns Gap Baptist Church in North Knox Cunty. Today, he operates Knox Gold Exchange in Powell. After the News Sentinel tried to contact him, lawyer James A.H. Bell sent the following email to a reporter:
"Our office represents Mr. Murphy, his wife Leanne and their business on other unrelated issues. Mr. Murphy's relationship with Mr. Candler was nearly a decade ago and Mr. Murphy has no knowledge of any of Mr. Candler's recent business or personal dealings, and respectfully declines to be interviewed for a story that is not 'a story.' "
"Cornerstone Mortgage" and "Southern Bankers" shared the same office address and phone number in Greenville, S.C.
Benchmark Capital Investment LLC was chartered in South Carolina in 2002. Records on a breach of contract case against the firm list Candler as president. Randall S. Hiller, the Greenville, S.C., lawyer who represented the firm and is the currently listed as registered agent, did not return a telephone call.
South Carolina records also list Hiller as the applicant to reserve the name "Southern BaBenchmark Capital Investment LLC was chartered in South Carolina in 2002. Records on a breach of contract case against the firm list Candler as president. Randall S. Hiller, the Greenville, S.C., lawyer who represented the firm and is the currently listed as registered agent, did not return a telephone call.
South Carolina records also list Hiller as the applicant to reserve the name "Southern Bankers Inc." for future incorporation there.
In the 1990s, Candler owned CCI Building Systems, a contracting firm that built free-standing outbuildings. His business practices resulted in judgments against him in local civil courts and landed him in U.S. Bankruptcy Court. Eventually, he was convicted in Knox County Criminal Court of theft for keeping payments for projects he did not do.
"Bluntly stated, C.D. Candler is a con man," Knoxville attorney John M. Neal wrote in a bankruptcy court pleading on behalf of some of Candler's creditors. "He essentially ran a pyramid scheme."
Candler collected a "substantial" down payment from customers, then used that money to pay costs associated with other projects, Neal wrote. "He would not have the resources to construct a building for a given customer unless he was able to sell a job to (a new) customer, whose deposit he would then misapply."
Bankruptcy court records show that Candler also owed the IRS at least $94,000.
"The $94,000 … may or may not accurately portray what he owes," U.S. Bankruptcy Court Judge Richard Stair Jr. said in a written finding. "We will never know."
Before CCI Building Systems, Candler operated the Katch One strip club in West Knox County. He also raced stock cars in sanctioned events.
Chris Corum, a former racer who co-hosts "The Lead Lap" racing radio program on WNML-FM, remembers Candler as a "hobby type racer," and that he sometimes had a Katch One logo on the side of his car.
In 1995, Candler was granted a patent for a motor vehicle engine design. That he was intelligent enough to obtain such a patent was one of several reasons Stair cited when he ruled in 1997 that Candler would not be given a pass from his debts.
"This is not an unintelligent and unsophisticated consumer," Stair wrote. nkers Inc." for future incorporation there.
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