State Shuts Down Village Life Operations
(Story created: 2/4/03)
The state of Tennessee has shut down a company in Smyrna. This comes on the heels of an exclusive NewsChannel 5 investigation.
Village Life promised to pay off your debts.
But the state says what Village Life was really doing was defrauding people out of hundreds of thousands of dollars.
In court documents filed Tuesday, the state claimed Village Life had illegally sold unregistered securities and misled investors.
A judge issued a temporary restraining order against Village Life and its owners.
"It will keep them from doing business in any way," says Daphne Smith, assistant commissioner for securities for the Tennessee Department of Commerce and Insurance.
"It will preserve assets. It will keep them from destroying records or any other way doing harmful thing to investors."
Under the terms of the restraining order:
- The company can't do any more seminars.
- All of Village Life's bank accounts are now frozen which means money doesn't come in -- or go out.
- And in the next day or two, the state will appoint someone to take control of the company and its books -- and figure out where all of the money has gone.
Following is the text of a news release from the Department of Commerce and Insurance:
Commissioner of Commerce and Insurance Paula A. Flowers on Tuesday filed a complaint against three Rutherford County residents alleging the illegal sale of unregistered securities in Tennessee, through their company, Village Life, Inc.
Acting on a complaint filed by the Dept. of Commerce and Insurance and the Tennessee Attorney General's Office, Davidson County Chancellor Ellen Hobbs Lyle on Tuesday issued a Temporary Restraining Order to prevent any transfer or disposal of the company's assets, and to protect and preserve the company's books and records until Flowers can name a receiver to take management control of the company.
Freddie Lee Carr and Jenelle Cedeno Carr, co-owners of the company, and Jamie West, office manager for the firm, are not registered with the state as broker-dealers or agents to sell securities, as required under the laws of the State of Tennessee. Lyle's order prohibits the three from engaging in any further marketing of unregistered securities.
In a 17-page complaint filed Tuesday in Lyle's court, the state alleged that Village Life operated an illegal scheme that uses the ``investments'' of new members to pay off the expected returns to new members. Such a scheme generally collapses when there are not enough new ``investors'' to satisfy ongoing claims for payments.
Operating through a series of seminars and a website, VLI offered four programs to promote ``debt-free living'' that required investors to pay a down-payment and six monthly payments and to recruit at least four new members to the program. VLI claimed that upon completion of the investment program, participants could finance a home, pay off a mortgage, pay of a car loan or buy a car, or pay off credit card debt.