You've probably already done this, but have you checked the user:group ownership of the folder?
On another note, there is an alternate method to chroot. You can create a folder in the users home directory, then bind it to the folder in your primary site like this:
mount --bind /home/e-smith/files/primary/html/yourfolder /home/e-smith/files/users/username/files/yourfolder
Set file/folder permissions accordingly. When the user logs in through ftp, they can access the folder in the primary site through the mounted folder in their home directory.
To make it survive a reboot, put the command in /etc/rc.d/rc.local. (You might have to uses /bin/mount instead of just mount here).
Hope that was helpful