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Mickey McCamish didn't know what to think when he saw the business card left by an FBI agent at his Heritage Landing home last spring.

"My wife immediately asked me what I had done," McCamish recalled with a laugh Friday.

The retired Navy captain was not the subject of the FBI probe. But nearly $100,000 of investments he and family members made with a pair of Chattanooga financial brokers were part of an investigation that led to guilty pleas in a financial fraud that cost investors millions of dollars.

Since 2008, Douglas A. Dyer, 57, and James Hugh Brennan III, 67, raised more than $5 million from McCamish and hundreds of other investors for their Broad Street Venture. They told local friends and members of the UTC Quarterback Club, which Dyer once headed, they would invest the money in buying companies to take public or sell later for big gains.

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Doug Dyer

But most of the promised investments were never made and the investors were swindled, according to the FBI and the U.S. Securities and Exchange Commission.

Dyer and Brennan raised millions for eight investment funds they created under different versions of the "Scenic City F-10" name.

But U.S. Attorney James Brooks said they were not licensed to sell such securities and illegally "diverted a significant portion of the money to their personal accounts which they then spent on personal items."

On Wednesday, Dyer and Brennan pleaded guilty to federal charges of wire fraud and tax evasion. Dyer also pleaded guilty to willfully disobeying a federal court order for continuing to try to arrange business deals and investments after regulators in two states issued "cease and desist" orders barring him from engaging in such business.

"He befriended and then fleeced some of the most philanthropic people in our city. And the real tragedy is that some of the money they lost was going to go to schools and local charities," said Paul Smith, a retired East Ridge business owner who invested his own money and that of others enticed into the investment scheme and its promise of rich rewards. "Doug was a well-spoken, great salesman, so people trusted him."

McCamish said most investors knew Dyer, Brennan and their families and regularly saw Dyer at University of Tennessee at Chattanooga athletic events. Dyer still sat in the some of the best seats at UTC games during the past year, even after the Tennessee Department of Commerce and Insurance and the SEC charged him and Brennan with securities fraud for illegally selling stock and diverting money to their own accounts.

"They just thought they were totally above the law," McCamish said. "We couldn't believe that someone who was so involved in our community would deceive so many people and take so much money. So once we realized what was happening, we stayed on it with the FBI and the securities regulators to make sure that they didn't set up shop somewhere else and take advantage of other people."

Dyer and Brennan face up to five years' jail time for each of the wire fraud and tax evasion charges, and Dyer could be jailed for another six months for willfully disobeying U.S. District Judge Travis McDonough's order.

The two were released on bond after their guilty pleas last week and are scheduled to be sentenced Aug. 25 in Chattanooga.

Lee Davis, an attorney for Dyer, said the two agreed to plead guilty, accept responsibility for their actions and work to make restitution as best they can.

"It's Mr. Dyer's intent to accept responsibility and to make restitution, although obviously it will take a long time to do that," Davis said Saturday.

Davis acknowledged that the Broad Street Ventures funds have been depleted and Dyer and Brennan will no longer be able to act as investment brokers.

In their plea agreement, they also admitted they improperly listed the funds they got as long-term capital gains, avoiding a significantly higher tax rate for ordinary income.

The SEC action said that over a five-year period, Carole Johnston Brennan, Jim Brennan's former wife, received $30,000 of the funds and Alison Ford Dyer, Doug Dyer's wife, received $286,000.

Alison Ford Dyer and Doug Dyer

Before starting Broad Street Ventures, Dyer and Brennan were experienced brokers and bankers.

Brennan was with Raymond James from 1984 to 1991 and with First Allied Securities for less than a year in 1996. Dyer was with Raymond James from 1987 to 1994 and with First Allied from 1996 to 1997. Dyer's LinkedIn site also says he was a vice president at the former Commerce Union Bank and Brennan's LinkedIn page indicates he is a University of Virginia MBA graduate.

"I heard about this investment fund and when I drove up to Chattanooga and talked with [Dyer and Brennan], they showed me all of the investments they had done in the past and all of the list of great clients they had, so I agreed to invest $25,000 in one of their funds," said Montellio Alston, a 58-year-old retired construction worker who lives in Decatur, Ga.

Alston said Saturday he fears he has lost of all of his investment.

"They stole my money," he said.

Dyer and Brennan operated Broad Street Ventures from an office in the James Building in downtown Chattanooga for years before shutting it down last year.

They have faced repeated regulatory violations for their financial dealings over the past two decades.

In 1999, the Financial Industry Regulatory Authority barred Brennan from the industry and fined him $10,000 after alleging he engaged in unsuitable trading in a customer's account. FINRA also disciplined Brennan in 1998 for failing to supervise stock trades by Dyer at another brokerage.

Also in 1998, FINRA fined Dyer $10,000 and suspended him for 60 days, after accusing him of unauthorized trading.

The pair were cited by California's Corporation Commissioner in 2005 for illegally selling unregistered securities there. They were ordered to "cease and desist" and give up their broker licenses.

Last year, the Tennessee Department of Commerce and Insurance filed a cease and desist order against Broad Street Ventures, Brennan and Dyer, alleging they continued to sell unregistered securities and had engaged in fraud by failing to disclose the existence of a desist and refrain order previously issued in California.

The U.S. Securities and Exchange Commission issued an asset freeze on July 22.

"We allege that Brennan and Dyer have been telling investors the same lies for several years without fulfilling any of the promises they've made," Walter Jospin, director of the SEC's Atlanta office, said in a statement last year.

Smith said Dyer and Brennan continued to send emails to investors indicating that their money was being used to merge or buy stock in other companies, leading to the contempt of court charge.

Contact staff writer Dave Flessner at dflessner@timesfreepress.com or at 423-757-6340.