If you're looking for a place to take the family on a quick trip without spending a ton of money in gas, Jamestown is an ideal spot for a One Tank Trip. More >>
If you're looking for a place to take the family on a quick trip without spending a ton of money in gas, Jamestown is an ideal spot for a One Tank Trip. Located on the Cumberland Plateau halfway between Nashville and Knoxville, the town has lots to do and see.More >>
LOUDON (WATE) - In a few days, a former insurance agent will be released from the Loudon County Jail after serving six months for defrauding customers. Some say Jerry Litton ran a small Ponzi scheme.
Customers knew and trusted Litton, who was a licensed agent, and they're angry that he's getting out of jail.
Three people who spoke to 6 On Your Side did business with Litton for years, but they now regret it.
Jerry Litton did business as Tennessee Home Solutions. He's serving time after he pleaded guilty in February to five counts of theft over $10,000.
The story Rita Ritchey, her father Don, and their friend, Glenn Pressley, tell started in 2005. Rita says that's when her mother, Anna, took out a tax deferred annuity investment with Litton.
Three years later, her mother needed some money gained from the interest. "She never did receive it," Rita said. "We called Mr. Litton to receive two years of interest payments and she never did receive it."
Rita says her mother's $26,000, three-year investment was supposed to gain eight percent each year, according to Litton, but it didn't.
"It was misrepresented to her as an annuity," Rita said. Instead, she says it was an "investment fraud."
Don Ritchey says he invested $25,000 of his own money with Litton. He had redeemed the money from another annuity Litton had arranged a few years earlier.
Don says Litton directed him to withdraw his money from ING and put it in Tennessee Home Solutions and he received a small monthly payment.
But in 2008, Don got bad news from Litton, who claimed the money he invested in Tennessee Home Solutions was lost in a real estate deal.
Glenn Pressley tells a similar story about his late father, who invested with Litton. "He (Litton) comes to Dad and says they're not paying you a lot and I can get you eight percent in Tennessee Home Solutions."
Glenn's father lost "$30,500 and some few cents," he said. "That's a lot of money for a hard working man."
David Lewis is a registered financial advisor in Knoxville who operates Resource Advisory Services. He doesn't know any of the people involved in this report.
Lewis says annuities are considered safe investments intended to provide a stream of income when you retire.
"Now a lot of people don't get to that point," Lewis explained. "They're sold as investments just for today and they're sold on a discussion of how safe they are. The people who sell them, one of the questions you always want to ask is how much will you personally make if I buy this annuity?"
Lewis also says if you're asked to redeem an annuity early, customers are hit with a big penalty. "Always ask them what are you getting paid if I do this?"
In the Litton case, he didn't use the plaintiffs' money to purchase any annuity. The court concluded he pocketed the money into Tennessee Home Solutions instead.
When Litton is released from jail on June 29, he'll begin five and a half years of probation. He's also been ordered to pay restitution, but his former clients have unanswered questions.
"How many more people has he done it to?" Rita said. "There are many others out there who think their money was put with a trustworthy, God fearing insurance broker reinvesting their interest. It's not. It's probably gone."
Six people brought suit against Litton. When he leaves jail, they're not sure how long it will be before they receive restitution.
Some have waited four years. They hope it doesn't take that long before they get their money.
If you have a consumer issue, call the 6 On Your Side Hotline at 865-633-5974 or email firstname.lastname@example.org.