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Indianapolis accounting firm settles with Fair Finance trustee

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Somerset CPAs P.C. will pay $500,000 to settle litigation brought by the bankruptcy trustee of Fair Finance Co., the Ohio-based firm convicted financier Tim Durham used to conduct a major Ponzi scheme.

Trustee Brian Bash alleged that Indianapolis-based Somerset received $760,454.90 in fraudulent transfers while working for Durham’s related companies. In a bankruptcy-court motion filed Wednesday, Bash said he was willing to accept the $500,000 to avoid expensive litigation over the complex case.

Somerset President Pat Early was traveling and unavailable for comment Thursday morning.

Bash’s claim involved dozens of transfers through 11 entities, including Fair Holdings, DC Investments and Obsidian Enterprises. In reality, Bash alleged, all of the payments to Somerset came from Fair Finance through a series of loan transactions. He alleged that Fair Finance had received no value for the fees because the related entities were insolvent.

Somerset disputed its liability and some of the factual allegations of the trustee’s claims, Bash noted. The firm admits no responsibility under the settlement.

The firm has already placed the $500,000 in a trust account for release upon the judge’s approval, it said.

Somerset is the seventh-largest accounting firm in the Indianapolis area with 56 CPAs, according to IBJ research.

Durham, the financial fraudster convicted in June, switched accounting firms in 2005 after he couldn’t get a clean audit. His former accounting firm, BGBC, told him it couldn’t issue an unqualified audit report for 2003 or 2004 because Fair’s “conduct indicated it was not being run for its own benefit.”

Somerset later accepted Fair as a client and issued a clean opinion for 2004. Early told IBJ that Durham provided “additional collateral he had not brought to the table when he was dealing with them.”

Somerset didn’t provide a clean opinion for 2005, and Durham dismissed the firm as his auditor.

In related news, Durham's attorney is protesting the proposed sentence recommended in the presentecing report that Durham spend around 225 years in prison and pay $209 million in restitution. Click here to read more.



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  1. I gave tempparry guardship to a friend of my granddaughter in 2012. I went to prison. I had custody. My daughter went to prison to. We are out. My daughter gave me custody but can get her back. She was not order to give me custody . but now we want granddaughter back from friend. She's 14 now. What rights do we have

  2. This sure is not what most who value good governance consider the Rule of Law to entail: "In a letter dated March 2, which Brizzi forwarded to IBJ, the commission dismissed the grievance “on grounds that there is not reasonable cause to believe that you are guilty of misconduct.”" Yet two month later reasonable cause does exist? (Or is the commission forging ahead, the need for reasonable belief be damned? -- A seeming violation of the Rules of Profession Ethics on the part of the commission) Could the rule of law theory cause one to believe that an explanation is in order? Could it be that Hoosier attorneys live under Imperial Law (which is also a t-word that rhymes with infamy) in which the Platonic guardians can do no wrong and never owe the plebeian class any explanation for their powerful actions. (Might makes it right?) Could this be a case of politics directing the commission, as celebrated IU Mauer Professor (the late) Patrick Baude warned was happening 20 years ago in his controversial (whisteblowing) ethics lecture on a quite similar topic: http://www.repository.law.indiana.edu/cgi/viewcontent.cgi?article=1498&context=ilj

  3. I have a case presently pending cert review before the SCOTUS that reveals just how Indiana regulates the bar. I have been denied licensure for life for holding the wrong views and questioning the grand inquisitors as to their duties as to state and federal constitutional due process. True story: https://www.scribd.com/doc/299040839/2016Petitionforcert-to-SCOTUS Shorter, Amici brief serving to frame issue as misuse of govt licensure: https://www.scribd.com/doc/312841269/Thomas-More-Society-Amicus-Brown-v-Ind-Bd-of-Law-Examiners

  4. Here's an idea...how about we MORE heavily regulate the law schools to reduce the surplus of graduates, driving starting salaries up for those new grads, so that we can all pay our insane amount of student loans off in a reasonable amount of time and then be able to afford to do pro bono & low-fee work? I've got friends in other industries, radiology for example, and their schools accept a very limited number of students so there will never be a glut of new grads and everyone's pay stays high. For example, my radiologist friend's school accepted just six new students per year.

  5. I totally agree with John Smith.

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