|An 81-year-old Murfreesboro woman is seeking more than $1.5 million in damages against a local certified public accountant for allegedly mismanaging more than $800,000 of her retirement fund.
Patsy R. Linkermann filed the lawsuit Aug. 24 in the Circuit Court of Rutherford County, arguing Ralph H. Turley mishandled multiple investments that she and her late husband, Carl, who died in 2001, had entrusted him with for more than 15 years.
“It is an extraordinarily sad story,” said attorney Russell Willis, who is representing Linkermann in the case. “This is all the money they had. She had to sell her house and downsize everything to be able to live. It’s shocking to me that we would have a professional who would do such a poor job – make such poor decisions.”
The Linkermanns hired Turley in 1995 and informed him that their primary investment objectives were to generate monthly income and preserve their initial capital, but they did not want any funds to be invested in the stock market because they could not afford the risk, according to court documents.
Turley assured the Linkermanns he would invest their initial retirement funds in a prudent manner that would generate returns of at least 8 percent and they would never lose money, according to the lawsuit.
As part of the agreement, Turley was given the authority to invest in businesses and make loans to individuals, either secured or unsecured, mortgage loans, as well as other investments.
Willis said Turley’s decision to invest the Linkermann’s savings solely in private loans was a breach of his fiduciary duty and professional malpractice.
As such, the type of loans Turley authorized garnered an “unacceptable risk of loss to the Linkermanns that they did not appreciate or understand, violated their stated investment criteria, were not in their best interest, and violated what is generally accepted as the prudent investor rule,” the lawsuit stated.
“If you have a professional telling you all of this stuff is true – a longtime resident with good a reputation – he should have been sophisticated enough to say that 8 percent was too risky,” Willis said. “He was aware she was not interested in the stock market.”
Turley is also accused of failing to keep and provide adequate records of financial transactions, to disclose self-dealing payments to himself and to family members, and to initiate legal action to collect delinquent loans that were made to local business owners.
The suit also alleges Turley filed various federal income tax returns that were prepared with false or incorrect information.
“The biggest problem I have is there is a complete lack of real documentation,” Willis said. “I don’t have all of the records. I can trace some of the money going into his hands, but I don’t know where it went from there.”
By April 2010, Linkermann allegedly “confessed to Linkermann that he had no money to distribute and that her money was gone,” according to the lawsuit.
Several messages were left for attorney Ken Burger, who is representing Turley in the case, but none of the calls were returned by deadline.
The suit also includes three local accounting firms: Jobe, Hastings & Associates; Dempsey, Vantrease & Follis, PLLC; and Grannis & Associates, P.C.
Turley worked for Jobe, Hastings & Associates from 1995 until October 2002, before being employed with Demsey, Vantrease & Follis from November of that year until July 2008.
Grannis & Associates then hired him in November 2008, and he worked there until his retirement in May.
Earlier this year, Linkermann filed a complaint with the Board of Accountancy, a regulatory board with the Tennessee Department of Commerce and Insurance.
“The board reviews complaints regardless of someone’s current employment status,” said Christopher Garrett, communications director for the Department of Commerce and Insurance.
No one from Grannis & Associates could be reached by deadline to comment on the matter. A female employee, who refused to identify herself, with Jobe, Hastings & Associates said the company had “no comment” about Turley or the case.
“We believe these charges are without merit,” said Percy E. Demsey III, a senior partner at Demsey, Vantrease & Follis. “We look forward to being vindicated in the matter.”
Willis acknowledged that all three firms are well-respected businesses in Murfreesboro, adding that he “does not think these firms are bad.”
“All of these people involved are good people,” Willis said. “I think it started out with good intentions, but it became too much for [Turley] to keep up with, and he got lost.”
However, he said the firms were included in the lawsuit because each one had a responsibility to ensure that Linkermann’s money was being appropriately managed.
Turley’s wife, Stephanie, and his son, Robert, are also named as defendants in the suit.
According to court documents, Stephanie Turley received more than $25,000 from the Linkermanns’ investment account without a written promissory note. As of the filing, those funds had not been repaid to Linkermann.
Robert Turley received $8,500 as well, but he has failed to pay the same in accordance with the promissory note, according to court documents.
The lawsuit also alleges that Johnny Jones, who is the owner of The Jones Company, owes Linkermann more than $250,000, an amount that was accumulated over a period of several loans Turley authorized during the late-90s and early-2000s.
The Jones Company is a commercial real estate business. It is not affiliated with nor should be confused with the well-known residential real estate firm, John Jones Real Estate.
Depositions are in the process of being scheduled, and no court date has been set, Willis said. He said the case could take up to a year to be resolved but looks forward to representing Linkermann in court.
“Every few years, it seems as though someone is taken advantage of,” Willis said. “The light needs to shine on these sorts of things so people will be more vigilant. These firms should do a better job of watching for their clients.”