Wednesday, October 22, 2014

You Don’t Know Bo. The Bo Mitchell link to Barry Stokes, mastermind behind most destructive Ponzi scheme in Tennessee history.

TNGOP releases documents, unveils revealing a disturbing link between Bo Mitchell and one of the most destructive Ponzi schemes in Tennessee history

Press release, NASHVILLE, Tenn.- When $19 million dollars goes missing, people ask questions. When an elected official has a connection to the company that lost it, voters get mad.

Metro Councilman and State Rep.
Bo Mitchell

The Tennessee Republican Party today made public a series of court documents and personal correspondence, as well as various media reports, that reveal a disturbing link between current State Representative Bo Mitchell (D—Nashville) and Barry Stokes, a shadowy figure behind one of the most destructive Ponzi schemes in Tennessee history.

Stokes was the mastermind who, as CEO and sole owner of 1 Point Solutions, LLC, a Dickson, Tennessee-based company, “engaged in the business of third party administration for various types of employee benefit plans such as 401(k) retirement plans, Flexible Spending Accounts (FSAs), and Health Savings Accounts (HSAs)” for numerous companies and government entities. A U.S. Department of Justice press release reveals Stokes was charged with 78 counts of embezzlement, wire fraud, money laundering, and mail fraud. He embezzled “over $19 million from thousands of victims’” accounts. Stokes pled guilty to the charges.

A deeper look through court filings and rulings reveal a familiar name was connected to Stokes: Bo Mitchell. In a personal memo, Mitchell admitted to being “hired (to 1 Point Solutions, LLC) by Stokes…to establish a market share of sales within the public sector.“ In other words, Bo Mitchell was hired to target taxpayer-funded government entities. Later in the memo, Mitchell takes credit for securing “over 17,000 participants and…billing in excess of $60,000 per month.” In April of 2006, both the Stokes Ponzi scheme and the fact that 1 Point Solutions was a front company for the scheme were uncovered. Soon thereafter, Stokes and 1 Point Solutions, LLC, filed for bankruptcy. With the scheme’s house of cards caving in, Mitchell parted ways with the company and appears to have pursued a career in political consulting.  Ironically, 2006 was also the year Stokes made his largest single contribution to the Tennessee Democratic Party to the tune of $20,000. Bo Mitchell—Stokes’ just-departed employee—worked as a consultant for the TNDP. Mitchell collected almost the same dollar amount Stokes contributed to the TNDP as detailed in 3rd quarter, pre-general election, and 4th quarter financial disclosures.

Barry Stokes, the politically
ambitious con man died
in prison in 2010
In 2007, Mitchell was elected to the Nashville Metro Council.

In 2008—two years after the shocking revelation of the Ponzi scheme and the sudden downfall of both Stokes and 1 Point Solutions, a Nashville City Paper profile of Mitchell confirms he “had the unfortunate distinction of working for 1 Point Solutions” and being connected to Stokes. In fact, it states Bo Mitchell was introduced to political insiders by Stokes. From the article, “more than one councilman said their initial introduction to Mitchell came through Stokes.”
Then in 2009, two years after he was elected to Metro Council and a year after Stokes pled guilty to the charges, Bo Mitchell filed two separate claims. One showed he cashed out his entire 401(k) Account in 2006—just prior to 1 Point Solutions filing for bankruptcy—taking the employer contribution to the account with him.

The second claim was for $40,000—money Mitchell claimed was owed to him by the bankrupt Ponzi scheme company for signing up 17,000 people. He asserted this was post-employment commission money that he should be paid. Keep in mind, this was well after it was made public the company was a front organization for a Ponzi scheme and after Mitchell should have learned he brought people into it. The second claim was rejected by the court for “insufficient documentation.” A review of the filings show Mitchell took credit for signing up Nashville Metro schools, Metro government, Hamilton County schools, and several other school systems, government entities, and companies. All told, Mitchell's clients’ losses accounted for nearly one million dollars of the $19 million lost in the Ponzi scheme, a substantial portion of which was taxpayer money.

Tennessee Republican Party Chairman Chris Devaney stated, “These documents reveal an alarming connection between Barry Stokes, the Bernie Madoff of Tennessee, and Bo Mitchell. Representative Mitchell’s actions raise serious questions about his judgment and integrity as an elected official in charge of taxpayer dollars. How does one learn that he’s responsible for signing 17,000 participants into a Ponzi scheme and then, in good conscience, attempt to go back and get more money that was obtained in such a destructive way? The voters of Nashville should be very concerned.”

To provide documentation relating to the case, the TNGOP has posted the documents and a timeline at:

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