A potential loss of $55,000 in investments with Fair Finance is not the first time at least one Akron area investor has been caught in possible investment trouble.
The retired Akron man and his wife, who asked that their names be withheld from publication, also invested $195,000 in Evergreen Homes.
Earlier this year, David Willan, owner of that business along with Evergreen Building and Evergreen Investment, was convicted by a Summit County jury of engaging in a pattern of corrupt activity and 68 additional felonies involving various financial crimes.
Prosecutors alleged that Willan defrauded 18 investors out of $2 million and that homeowners took out 22 second mortgages totaling $356,640. Willan is serving a 16-year prison term.
Regarding Fair Finance, court documents and other records show that the FBI, the U.S. Attorney's Office in southern Indiana and the Securities and Exchange Commission are investigating whether the Akron-based business and related companies in Indiana and Dallas are part of what is called a ''Ponzi'' scheme that defrauded Ohio investors.
The FBI raided the Akron and Indianapolis offices on Nov. 24. The Akron offices remain closed, although a lawyer for Indiana-based Fair Finance co-owner Tim Durham has said the business is hoping to reopen on Monday.
No charges have been filed against the owners of Fair Finance, which sells financial products solely in Ohio. The company reported a financial loss in 2008.
''What are you supposed to do?'' asked the retired Akron man. ''You try to do the right thing and get the better return where you can and all at once, you go belly up.
''It's just one of those things. It happens. Look at (Bernie) Madoff. People lost their fortunes with this guy.
''I still got the means to keep my head above water.''
Still, the couple, who are in their 80s, are hopeful of recovering their investment.
''My wife is all over me over these crappy investments. Who can you trust anymore?''
The man said he knew his investments in Fair Finance were not federally insured as a bank deposit would be, but said the interest rates were better than at a bank.
''I'm just hoping something can materialize on this Fair Finance where at least we get something. I don't know about Evergreen,'' he said.
''That's money I couldn't afford. It's just money I thought was well spent, but that wasn't. We just got taken to the cleaners on it,'' he said.
The man estimated he'd been investing in Fair Finance for about 20 years. He put in a little bit in the beginning and when he'd get an extra $5,000 or $10,000, he'd invest more.
Fair Finance was acquired in 2002 by the out-of-state interests who are under investigation.
''Rather than put it in the bank and get 2 to 3 percent, I put it in there and get 6, 7, 8 percent. It was an ongoing thing from time to time,'' he said.
The couple used Fair Finance and Evergreen for their investments instead of the bank, he said.
''I'm about ready to call (President) Obama for a bailout,'' he said.
Another investor
Joseph Boughner of Apple Creek and his wife aren't optimistic that interest payments due this week on some of their CDs will be paid.
On Tuesday, Boughner said he spoke to his attorney, who advised him that he could sue Fair Finance once the company defaults on his interest payments, which are due on the 3rd, 4th and 5th of the month. But his lawyer has warned that if he does sue, he might merely be getting in line with other potential creditors and could only get pennies on the dollar returned.
Boughner declined to say how much he had invested except to say it was significant. On about 20 percent of his CDs, he said he knew the investment was risky when he first invested about five years ago.
''I knew they weren't FDIC insured. I had several friends with them for 10 to 15 years and they never missed a payment. About a month ago, there was something floating around the Internet that gave him (Fair Finance CEO Timothy Durham) bad press. We looked at that and thought maybe they were just giving him a bad time,'' said Boughner.
''We wondered if we should do something, but we didn't do anything. That was a mistake,'' he said.
''Keep in mind, as you well know, they've been in business since 1934 and everybody I've talked to that's done business with them — I have a brother-in-law with a pile of money — never lost a cent.''
''My feeling is I'm screwed. I don't think I'll see it. I'm going to try,'' he said. ''I'm not happy about it. It's not going to put us on the bread line — yet.''
Retired welder
A retired welder in Navarre who invested $12,500 with Fair Finance and asked that he remain anonymous said he was always a little worried that the return on his investment might be too good to be true.
He started with $500 five years ago. But once he was consistently getting 8 percent to 10 percent returns, he added more money.
''I always knew it was not FDIC insured,'' he said. The Fair Finance employee would always tell him any investment is risky.
''I didn't rush headlong into this. My eyes were open. I was very cautious,'' he said.
The interest payments would arrive on the 15th of each month — the day he chose for his interest payments. If the 15th fell on a holiday, he'd always get it a day earlier.
''It's not my life savings, but I would love to have it back. I'm cheap. I told my wife, that's two trips to Paris. That's a kick-ass tractor I have not bought because I'm so cheap,'' he said.
''I'm sure I'm in a position to absorb it more than others,'' he said.
On Monday morning, he said he stopped by the North Canton Fair Finance branch after he heard about the FBI raid. A sign said the office would reopen after the Thanksgiving holiday.
But it was still closed and investors were gathered at the door.
The man said he saw an 85-year-old man who appeared distraught.
''He couldn't talk. There were tears in his eyes,'' he said. ''This guy couldn't afford to lose it. My heart went out to him.''
If you own Fair Finance investments or are a business customer of the company and you have information that you believe is useful to the Beacon Journal, you can e-mail us at newstips@thebeaconjournal.com.
Other contacts:
The Ohio Division of Securities investor protection information hot line at 800-788-1194 and 614-466-6140.
The FBI at 800-CALL-FBI.
Betty Lin-Fisher can be reached at
330-996-3724 or blinfisher@
thebeaconjournal.com.
