ILNews

Indianapolis accounting firm settles with Fair Finance trustee

Back to TopCommentsE-mailPrint

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.



ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Indiana State Bar Association

Indianapolis Bar Association

Evansville Bar Association

Allen County Bar Association

Indiana Lawyer on Facebook

facebook
ADVERTISEMENT
Subscribe to Indiana Lawyer
ADVERTISEMENT