A race to find millions in dollars that rightfully belong to Fair Finance creditors now includes a lawsuit against Daniel Laikin, who used to run comedy movie maker National Lampoon Inc. and might owe Fair Finance nearly $20 million.
And there remain strong indications that there is an active criminal investigation into whether Akron-based Fair Finance Co. was being run as a Ponzi scheme since it was purchased in 2002 by two Indiana businessmen, Timothy Durham and James Cochran.
Fair Finance has been in bankruptcy proceedings since February after FBI raids in late November shut its offices.
Fair Finance's court-appointed trustee, Brian Bash, last week sued Laikin, who has addresses in Indiana and in Malibu, Calif., seeking more than $19 million that Laikin borrowed from Fair Finance through its Indiana-based corporate parent, DCI Investments. The lawsuit seeks eight West Hollywood properties Laikin allegedly bought with millions in loans from Fair Finance.
The trustee said he believes ''time is of the essence due to the probability that Laikin will attempt to dispose of the real property . . . in light of his problems with the federal government, and because the trustee is informed that Laikin has listed the real property for sale.''
The lawsuit says the trustee believes Fair Finance was bled dry by large insider loans.
At stake is an estimated $208 million in Fair Finance investment certificates purchased by more than 5,000 Ohio residents primarily in the greater Akron-Canton area.
''At the time of the purchase in 2002, the debtor [Fair Finance] was a strong, viable, reputable company. By 2009, the debtor had been utterly looted through insider loans, resulting in the shutdown of the debtor's business after the FBI raid,'' the lawsuit says.
Bash's lawsuit says that Fair Finance, its Ohio-based corporate parent Fair Holdings and DCI are so entangled financially that they are essentially one company. Durham and Cochran formed Fair Holdings to purchase Fair Finance, with DCI owning all of Fair Holdings. Fair Finance was founded in 1934 as a loan and investment company.
Bash gave a brief overview of the lawsuit and other related matters during a status update conference call Thursday morning in U.S. Bankruptcy Court in downtown Akron.
Bankruptcy court chief Judge Marilyn Shea-Stonum said there may be an ongoing investigation into Fair Finance by the state of Ohio.
Bash said he and his team have gotten access to Fair Finance documents taken by the FBI in November's raids.
He also said he has ongoing communications about Fair Finance with the FBI, Department of Justice, Securities and Exchange Commission and Ohio Division of Securities.
Bash's lawsuit says Laikin, a director of Fair Finance from 2006 through 2009, is or was an owner of DCI.
He is awaiting sentencing on criminal charges related to securities fraud involving National Lampoon, where he had been the chief executive. The charges were brought by the SEC and the U.S. Attorney's Office for the Eastern District of Pennsylvania.
Durham, co-owner of Fair Finance, succeeded Laikin as CEO at National Lampoon.
Laikin pleaded guilty last year to charges that he manipulated the stock price of National Lampoon, the producer of racy comedies including Stoned Age and Endless Bummer as well as Animal House and the National Lampoon Vacation series.
The civil lawsuit alleges that the owners of Fair Finance ''utterly looted'' the company through the use of insider loans and used Fair Finance as a ''cash cow to personally enrich the owners and other insiders and affiliates.''
The 85-page court document alleges that DCI ''has wrongfully received no less than $66 million'' from Fair Finance and that ''defendant Laikin has wrongfully received no less than $19 million from the debtor.''
In addition, Fair Holdings owes Fair Finance at least $76 million, the lawsuit states.
Fair Holdings and DCI ''conducted no business other than to draw money out of the debtor through the loans,'' the lawsuit alleges.
''We are continuing to pursue and investigate any parties that had dealings with Fair Finance,'' Bash said in court.
Jim Mackinnon can be reached at 330-996-3544 or firstname.lastname@example.org.