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Ira Brody has emerged as one of the GOP's leading contenders to be state treasurer. But who is he, and why does he have so much trouble answering questions about his background?more>>
By Phil Williams Chief Investigative Reporter
NASHVILLE, Tenn. - A potential scandal is brewing around a man who helped fund a lot of GOP campaigns and almost became Tennessee's state treasurer.
Last year, Ira Brody's Republican friends nearly put him in charge of your money. Brody argued that he could do for the state what he had done for his own company.
But, now, Brody's former company is accusing him of engaging in a criminal fraud that cost it hundreds of millions of dollars.
"What we have to do is become creative while still managing risk," Brody told a committee of Republican lawmakers in late 2008, as they prepared to take control of the Tennessee General Assembly and elect their own state constitutional officers.
From that first interview, the New York investment banker appeared to have made the connections to get control of billions of dollars of Tennessee taxpayers' money.
"I make contributions pretty freely because I believe in Republican causes," Brody told NewsChannel 5 Investigates. As the attached summary shows, since 2005, those contributions appear to have topped $200,000.
Even after we uncovered a questionable concept to take out life insurance on state retirees -- an idea that one activist called "creepy" -- Brody insisted his business experience made him the man for the job.
"I believe that I am uniquely qualified to do this job and do it well," he said.
But in a lawsuit just filed in New York by his former company, Concord Capital Management, Brody is accused of running what it calls a "criminal campaign."
"There's no question that these allegations, if they are true, constitute many, many crimes," said former federal prosecutor Gary Blackburn, who reviewed the lawsuit.
Concord -- formerly known as Inscap -- made money off complex insurance transactions.
But the lawsuit describes "a shocking scheme -- involving fraud, forgery and bribery -- in which a renegade group of executives (including Brody) ... looted the assets of Concord."
As a result, it says, "Concord lost hundreds of millions of dollars."
Blackburn called the transactions described in the complaint as "death bets."
"They are betting that people are going to die within a certain time period and, instead of basing the reliability of the loan that the bank makes to finance the premium on the value of the policy, they base it on a resell value of the policy to other persons, then misstate that value," the Nashville lawyer explained.
The lawsuit claims that Brody collected unauthorized fees after he "forged at least six fee letters by 'Photoshopping' the insureds' signatures."
When a banker sent an email to Brody about one transaction, the lawsuit claims Brody responded, "Shhhh. Not so loud. I did not cc everyone else. I went [to] Spitzer school of secrecy."
Brody began building a political reputation in Tennessee then bought more than 100 laptops in 2008 for a Murfreesboro school.
His company also had a luxury suite at Titans games where he entertained Republican lawmakers.
The lawsuit claims Brody used the stolen money to buy "a Disney World vacation, 200 computers, home furnishings, outings to Miami night clubs." There were also "private jets, limousines, ticket brokers, boxes at sports arenas."
"If the complaint's accurate, that was all smoke and mirrors," Blackburn said. "He was able to project the image of success by stealing from the company that he worked for, according to the complaint."
The company says it became aware of the elaborate scheme after Brody resigned to campaign for the state treasurer's job.
"After Brody left -- and he could no longer block access to Concord's books and records -- the forgeries, empty trusts and looting were discovered," the lawsuit adds.
NewsChannel 5 Investigates tried to reach Ira Brody, but that call was not returned.
Fifth Third Bank is also named in the suit, but a corporate spokesperson could not be reached for comment.