A Columbia-based attorney has been appointed receiver of all the frozen assets of Compass Academy, Jonathan “Jay” Brooks, Tracy Brooks and related companies.
Sherri Lydon, a former federal and state prosecutor, who now specializes in white-collar criminal defense, was selected by Circuit Court Judge Clarence Newman. At the top of the new receiver's list is to see if the school can get up and running on target.
“Conducting an investigation into the feasibility of completing the construction of Compass Academy and beginning classes for the 2013-2014 school year is to be a high priority of the Receiver,” Newman writes.
Jay Brooks, his wife Tracy, and Jay Brooks' companies, J. Brooks Financial and Brooks Real Estate Holdings, are under accusations of illegally selling unregistered securities to fund the establishment of a new school, Compass Academy.
They also are accused by the Securities Division of the Attorney General's Office of using those funds to buy groceries, their house, vacations and jewelry rather than investing them.
After having the assets frozen, Compass Academy asked that a receiver be put in place to marshal and tally all resources.
“We want the school to have the opportunity to open as planned,” said Stan Jackson, attorney for Compass Academy.
Newman selected Lydon from two candidates presented by the Attorney General's office that all parties agreed were experts and experienced.
Lydon has prosecuted complex drug cases, as well as cases involving bank, mail, insurance and wire fraud. She also has handled tax matters and public corruption, according to her resume presented in court.
She was one of the lead prosecutors in Operation Lost Trust, an FBI investigation which shook the state more than 20 years ago and resulted in numerous convictions of lawmakers and lobbyists for public corruption.
In 2003, then S.C. Attorney General Henry McMaster asked Lydon to be the Chief of the State Grand Jury. In that position, she led the successful prosecution of South Carolina's largest securities fraud case involving Carolina Investors and Homegold.
As receiver, Lydon will have a broad scope of authority, including subpoena power, the employment of staff, the liquidation of assets (with court approval) and can be aided by the Sheriff's Office of Aiken and Richland counties.
Within 30 days, Lydon must present “a full and detailed inventory, under oath, of all property, assets and effects of every kind.”