Letter To Andrea Seidt, Commissioner Of Ohio Securities Commission
Letter
As the majority of Ohio customers of a potentially fraudulent consumer loan company reside in U.S. Congressman John Boccieri's (D-Alliance) 16th Congressional district, Boccieri today made public his correspondence with Ohio Securities Commissioner Andrea Seidt and issued a statement regarding the stability of the Fair Finance Company and the security of the investments for Ohio consumers. Boccieri's statement follows:
"The federal government must act to freeze the assets of Mr. Durham while the investigation into any alleged wrongdoing with Fair Finance is ongoing. I am committed to working with law enforcement and others to ensure any criminal act is prosecuted to the fullest extent under the law. We've seen the greed on Wall Street and I cannot stand by while bets are taken on the backs of my constituents and their life savings and retirements are being gambled away from them."
News reports today confirm the FBI raided the Akron, Ohio office and one Indiana-based office of Fair Finance Company, a consumer-loan company which Ohio securities regulators report will not be allowed to sell additional investment certificates until CEO Tim Durham can confirm the company is capable of paying them back. Previous news reports questioned Durham's ability to repay investors who are now owed nearly $200 million. Additional Ohio-based Fair Finance locations include Wadsworth, Medina, Wooster, Canton, and Ashland. There are two Akron-based locations and one in Cuyahoga Falls.
In his letter to Ohio Securities Commissioner Andrea Seidt earlier this month, Boccieri urged an investigation into the practices of Fair Finance and recommend that if the commission finds even the slightest evidence of fraud or improper business activities, to take all necessary steps to immediately freeze the assets of Fair Finance Company and Tim Durham until the completion of a full investigation. As a result of Boccieri's recommendation and others, the FBI began their search warrant process.
Boccieri wrote in his letter, "We both agree that we have a duty to protect the savings of millions of Ohioans from fraudulent practices...Fair Finance products are not insured by the FDIC and the entirety of Fair Finance customers reside in northeastern Ohio, the majority in the 16th Congressional District. Given the evidence of rising company debt and several law suits filed against the owner of Fair Finance for fraud and nonpayment, I am deeply concerned that this company continues to register securities and offer them to Ohio consumers. This information...warrants an immediate investigation of the Fair Finance Company's Ohio operations and a full assessment of the ability of Fair Finance to fulfill their obligations to Ohio consumers."
While the search warrants are sealed, the FBI urges "anyone who has had dealings with Fair Financial Services or has information or concerns" to call the FBI at 1-800-CALL-FBI.
***The full text of Boccieri's letter to the Ohio Securities Commissioner is below.
November 19, 2009
Andrea Seidt, Commissioner
Ohio Securities Commission
77 South High Street, 20th Floor
Columbus, Ohio 43215-6131
Commissioner Seidt:
I am writing to you regarding the stability of the Fair Finance Company and the security of the investments for Ohio consumers. According to recent reports, Ohio consumers purchased over $197 million dollars in investments in this company, yet this company currently owes debts equaling 70 percent of the company's assets. This information, coupled with multiple pending suits for fraud and nonpayment and recent news reports about excessive spending by the owner of Fair Finance, warrants an immediate investigation of the Fair Finance Company's Ohio operations and a full assessment of the ability of Fair Finance to fulfill their obligations to Ohio consumers.
An October 24th report in the Indianapolis Business Journal raised concerns the company continues to issue investment certificates that, due to increasing debt and losses, it cannot repay. The owner of the Fair Finance Company and his related business firms owe the company more than $168 million, a sum accounting for 70 percent of the Fair Finance Company's assets. Additionally, since the company came under new ownership in the last 7 years they incurred $168 million in related party loans. Over the same period, the sale of investments certificates to Ohio residents rose while the company's core consumer finance business shrunk. Even more concerning is the fact that growth in the sale of Fair Finance investment certificates is supported by a promised rate of return over three times the highest advertised rate being offered at national banks.
We both agree that we have a duty to protect the savings of millions of Ohioans from fraudulent practices. Furthermore, Fair Finance products are not insured by the FDIC and the entirety of Fair Finance customers reside in northeastern Ohio, the majority in the 16th Congressional District. Given the evidence of rising company debt and several law suits filed against the owner of Fair Finance for fraud and nonpayment, I am deeply concerned that this company continues to register securities and offer them to Ohio consumers.
Therefore with more than $197 million in outstanding certificates at stake for hard working Ohio families, I urge you to take immediate action to protect Ohio's consumers and investigate the soundness of these financial products. Also, if the commission finds even the slightest evidence of fraud or improper business activities, please take all necessary steps to immediately freeze the assets of Fair Finance Company and its CEO, Tim Durham until the completion of a full investigation.
Sincerely,
John Boccieri
Member of Congress
CC: Richard Cordray, Ohio Attorney General
30 E. Broad St., 17th Floor
Columbus, OH 43215
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