The investigation into what happened with more than $200 million of Fair Finance Co.'s money is nearly over, says the trustee overseeing the Akron firm's bankruptcy.
In 30 days, details should be ''known to all,'' trustee Brian Bash said Tuesday.
''We are pretty much through the investigative piece of the puzzle here. There are some odds and ends we have to do,'' Bash said during a monthly teleconference status update in U.S. Bankruptcy Court in Akron. ''We have dealt with more than 70 entities. It has been no easy task.''
Bash, a Cleveland attorney appointed trustee by the court, spoke only of the civil Chapter 7 bankruptcy process, not an ongoing federal criminal investigation. The federal government is looking into a possible Ponzi scheme involving thousands of Ohio residents who bought investment certificates from the now-defunct Akron consumer loan and accounts receivables firm owned by two Indiana businessmen.
The civil and criminal investigations are ''two separate tracks,'' said Tim Morrison, first assistant U.S. Attorney for the Southern District of Indiana.
The forensic accountant Bash hired has finished reviewing Fair Finance's paper and computer records, seized by the FBI on Nov. 24, 2009. The accountant ''is developing significant information. That will be made public in about 30 days,'' Bash said.
The trustee said he expects to file additional lawsuits against people he believes owe a lot of money to the Fair Finance estate. In other court documents, including a lawsuit filed Friday seeking $1.2 million from the brother-in-law of Fair Finance co-owner Timothy Durham, Bash has said the company had been ''utterly looted'' since 2002 by insider loans.
''The [lawsuit] activity is going to significantly increase after mid-February,'' Bash said.
Bash said his investigation also looked into whether any holders of Fair Finance investment certificates had been colluding, or were ''in cahoots'' with Fair Finance and cashed out their money before the offices closed in November 2009.
There is no evidence so far that shows any collusion involving certificate holders, he said. The investigation looked at $48 million in interest payments sent to certificate holders from 2006 through 2009, he said.
''That is the analysis right now,'' Bash said.
For decades, Fair Finance, founded in 1934, sold investment certificates — short-term loans — to Ohio residents that promised higher-than-bank-rate interest. The certificates were not government insured. The Fair family sold the business in 2002 to Indianapolis businessmen Timothy Durham and James Cochran; while federal investigators said in court records they suspected the company was being operated as a Ponzi scheme, no one has been charged or arrested.
Fair Finance sold about $220 million in investment certificates to 5,300 Ohio residents, primarily in Northeast Ohio, as well as to organizations and businesses in the region. Certificate holders are considered unsecured creditors.
Public records show that almost immediately after the sale of Fair Finance closed in January 2002, money from the Akron company was loaned to unprofitable businesses operated by Durham and Cochran. Over the years, records show Fair Finance loaned millions of dollars to Durham-controlled businesses as well as to business colleagues and friends, with little of the money actually paid back.
During Tuesday morning's court hearing, Mark Carson, a Cuyahoga Falls resident who bought Fair Finance investment certificates, told Chief Judge Marilyn Shea-Stonum that he is being called daily by Worthington-based Fraud Recovery Group regarding his investments. Carson said he wondered what he should do.
FRG, which has held at least one meeting in the area in recent months to solicit Fair Finance investors, says it might be able to use a special provision of the tax code to help people recoup some of their money through federal income tax refunds.
The judge, along with Bash and Bash's attorney Kelly Burgan, advised that he talk with his own tax professional before acting. They also urged Carson and other Fair Finance investors to carefully review the credentials and history of Fraud Recovery Group before making any commitments.
Fraud Recovery Group is not affiliated with either the trustee or the court. The federal government last year sued FRG, saying it should not be allowed to prepare income tax forms. FRG is fighting the lawsuit and says it has a better than 94 percent success rate filing income tax returns. The company said it expects to go to trial in 2012.
''A lot of hard-working people put their trust in Fair Finance,'' Shea-Stonum said. ''I do not want to see you in any further way hurt.''
The judge said Fair Finance creditors seeking information on the bankruptcy case or who have questions need to go to the trustee's Fair Finance website, http://www.fairfinancetrustee.com.
''I have urged Mr. Bash from the get-go to find efficient ways to communicate with people who have claims,'' she said. The judge said that for legal reasons she has not seen the website.
''They're working the case, as best I can tell, very, very diligently,'' Shea-Stonum said of Bash and his staff.
While the chance of a full recovery of funds is ''extremely bleak,'' the trustee is working hard to recover money that can be distributed to Fair Finance certificate holders, she said.
The next trustee status update is scheduled for 9:30 a.m. Feb. 15 in U.S. Bankruptcy Court in downtown Akron.
Jim Mackinnon can be reached at 330-996-3544 or email@example.com.