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Do IT this week: Layering
Ohio tells Fair Finance plans to trade securities for $250 million on hold
By Jim Mackinnon
Beacon Journal business writer
Published on Thursday, Nov 26, 2009
The Akron headquarters of Fair Finance Co., raided Tuesday by the FBI, were empty on Wednesday.
A note on the main entrance says Fair Finance closed for the Thanksgiving holiday week and plans to reopen Monday. A look through the windows shows rows of file cabinets with the drawers missing.
Meanwhile, the state of Ohio has put a hold on a new offering of up to $250 million in securities by the company.
Now under the ownership of an Indianapolis company, Fair Finance has a rich history in this part of Northeast Ohio.
Fair Finance's roots go back to 1934 in Akron when car dealer Ray Fair founded the business to provide loans to customers during the Great Depression.
The business since 1956 has had headquarters at 815 E. Market St., now flanked on one side by the East Market Game Room and on the other by University Park Nursing and Rehabilitation Center.
Fair Finance, which also does business as Fair Financial Services, was sold by the Fair family in 2002 to a company run by Indiana businessman Timothy S. Durham.
At the same time the FBI
searched the Akron offices, agents also raided Durham's Obsidian Enterprises offices in Indianapolis.
The company has another Akron site, plus says it has offices in Ashland, Cuyahoga Falls, Medina, North Canton, Wadsworth and Wooster.
Efforts to reach Fair Finance executives in Akron and in Indiana were unsuccessful Wednesday.
An FBI spokesman on Wednesday said the search warrants that allowed agents to raid the place on Tuesday remain sealed in federal court.
The company routinely advertised consumer financial products that paid high interest rates and were not federally insured.
The Indianapolis Business Journal last month investigated Fair Finance and questioned whether the company could pay back nearly $200 million owed to Ohio investors who bought the company's investment certificates. The products were available only to Ohio residents.
The Ohio Division of Securities has put on hold a Fair Finance request filed in late October that the company be allowed to sell up to $250 million in new securities in Ohio. The state says it needs Fair Finance executives to answer more questions about its application before acting on the request.
The state previously granted Fair Finance the right to sell securities for a 16-month period that expired on Tuesday, said Dennis Ginty, spokesman for the Ohio Department of Commerce.
That means for now, Fair Finance is not licensed to sell securities in the state, Ginty said.
''The company is not authorized to sell any securities in Ohio unless and until a new registration filing is accepted by the division,'' Ginty said Wednesday.
The securities division was not a party in Tuesday's raid and has not taken any enforcement actions against Fair Finance, he said.
Congressman John Boccieri, D-Alliance, on Wednesday sent out a statement calling for the federal government to seize all of the assets of Timothy Durham and Fair Finance Co. as the investigation proceeds.
Akron resident Lou Laurich, 67, said he invested $8,000 with Fair Finance earlier this month after reading ads that promised a high interest rate.
The retired engineer talked with friends about whether to give the company some of his money.
''I thought I'd take a chance,'' Laurich said. ''If it's out, it's out.''
A friend who is a retired banker told him Wednesday that he and the other investors may not be out any money, Laurich said. ''It's too soon to jump to conclusions,'' he said.
Another customer who stopped by the closed offices said he was concerned with news reports of the raids but otherwise declined to speak with a reporter and photographer.
Since its founding about 75 years ago, Fair Finance has evolved.
It originally loaned money to people who otherwise could not afford a car or truck. Ray Fair moved the business into other areas and acquired other financial services businesses in the area.
His son Donald took over the company, according to an Akron Beacon Journal profile published in 1985. The company stopped making vehicle loans in 1959 and evolved into providing second mortgages and small consumer loans, as well as financial investments.
The Fair family was active in local philanthropies and donated the one acre of land off Cedar Street where the Akron Community Foundation built its headquarters in 1997. Donald Fair was a foundation trustee.
While it has been described as a consumer loan company, the company's Web site says Fair Finance ''has established itself as a leader in 'Contract Factoring' and 'Accounts Receivable Management' '' for sales and service companies throughout the United States.
Jim Mackinnon can be reached at 330-996-3544 or jmackinnon@thebeaconjournal.com.
The Akron headquarters of Fair Finance Co., raided Tuesday by the FBI, were empty on Wednesday.
Get the full article here.
Comments
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Posted 04:09 AM, 11/26/2009
I always thought their ads were too good to be true and noticed no FDIC. The fine print always said some risk involved. I passed.
Posted 09:34 AM, 11/26/2009
A sad example of character.
Our family did business for years while the Fairs owned the business. We got skeptical when this new company started raising interest rates and expanding, and we started getting our money out.
In seven years this man ruined 68 years of a good name and business.
Akron, OH
Posted 12:14 PM, 11/26/2009
P
O
N
Z
I
you ain't got no alibi,
you fraudin', hey, hey, you fraudin'!
Akron, OH
Posted 12:42 PM, 11/26/2009
Loaning money is a tricky business
