There is a physical building on 1200 Toolebeck Road in Aiken, but whether Compass Academy will open as a school on that site seems uncertain, after fraud, deceit and large-scale mismanagement of accounts have been alleged in its fundraising.

Jonathan “Jay” W. Brooks of Aiken, the money man behind the school, has been named in a civil suit by the S.C. Attorney General, accusing Brooks of “misappropriating investor funds for personal use,” among a litany of other violations of S.C. code relating to the sale of securities. These include Brooks telling the Securities Division of the Attorney General's Office that he had no invoices, records or receipts for the Compass Academy account, which had allegedly seen $5 million go through it.

The investigation is directly related to millions of dollars in securities sold by Brooks to investors in Compass Academy, a private school under construction west of Aiken.

These violations have, through his attorney Stan Jackson, been denied by Brooks.

“We are working with the Attorney General's Office, and we will get these cleared up,” Jackson said.

The legal issues may not stop in civil court. The Attorney General's Office confirmed that there is a possibility of a criminal investigation.

“I can confirm that a criminal referral has come for review,” said Mark Powell, communications director for the Attorney General's Office. “We cannot comment on items under review.”

A criminal referral is made when an attorney litigating a civil matter feels there could be criminal acts involved. This does not mean that a criminal case is being made or will be made. The case is simply being reviewed.

The civil complaint cites violations when Brooks allegedly sold Compass Academy investors securities – their investment in the school which were meant to be repaid with eight percent interest – illegally.

According to documents, Brooks allegedly sold securities that were not registered legally, made false statements about them to investors, defrauded investors, and was not properly licensed to sell these securities.

The Compass Academy Business Plan offered to several prospective investors “contained one or more misstatements of material fact.”

“Specifically, Defendant Brooks lied, among other things, about the number of his and (J. Brooks Financial) clients invested in (Brooks Realty) and Compass Academy,” the complaint reads. “Defendants have, on one or more occasions, misappropriated investor funds for personal use.”

Brooks would not speak of the accusations Wednesday at his office, he instead accused others of being involved in trying to smear him.

Late Wednesday, Brooks again made vague allegations against “competition” in an email to those involved in the Compass Academy project.

“We have had forces plotting against us from the start,” he wrote in an email obtained by the Aiken Standard. “Nobody likes competition, especially if that competition poses a major threat to their sustainability. It breaks my heart to tell you that those negative forces have stooped to all time lows.”

Brooks goes on to deny any wrongdoing in the email and ends saying, “We did nothing wrong, and time will give evidence to this.”

He tells the recipients that all information requested by the Attorney General's Office has been submitted to them.

However, Wednesday afternoon, that was not the view of the Attorney General's Office, and Jackson also said earlier that there were documents outstanding. All of the assets of Brooks and his firms J. Brooks Financial Inc., Brooks Real Estate Holdings LLC, and Compass Academy LLC have been frozen by the Securities Commission.

This is an action taken extremely infrequently by the Securities Commission, according to a local financial attorney who spoke under condition of anonymity as he is not familiar with the Brooks case.

“I've only seen this a couple of times in the 15 years I've practiced,” he said, talking Wednesday. “It's not easy for the AG to get a TRO.” A TRO or temporary restraining order was granted for all of these accounts by Circuit Court Judge Casey Manning who said the Attorney General's case had a “good chance of succeeding.”

“Plaintiff has shown that there is a danger of irreparable harm to the public interest ... if the defendants (Brooks and his companies) access to the funds is not restrained,” Manning wrote.

The complaint and the Attorney General's Office do not suggest any wrongdoing by any other party involved in the project outside of Brooks and the registered agents of his companies.

If you are an investor and have a question or concerns, the Securities Division of the Attorney General's Office can be reached at 803-734-9916.