Investors in Tim Durham’s Fair Finance Co. shoved the company into bankruptcy court Monday morning, a move intended
to reduce the risk assets will disappear while securities fraud probes continue.
Ohio attorneys David Mucklow and
Michael Moran filed the involuntary Chapter 7 bankruptcy case in the U.S. Bankruptcy Court for the Northern District of Ohio
on behalf of Fair Finance investors they represent. The filing seeks appointment of a trustee “to take possession of
the property ... in order to protect and preserve the assets.”
This is the second time in recent days
that Ohio attorneys have launched legal efforts to marshal assets of the Akron, Ohio, company. On Feb. 4, attorneys filed
a motion in a class-action lawsuit asking an Ohio state court to appoint a receiver.
Mucklow told IBJ
he believes bankruptcy is a better option because the federal bankruptcy court has jurisdiction over
assets related to Fair and its co-owners—Durham and fellow Indianapolis businessman Jim Cochran—that
are beyond state lines, while the state court does not.
Investors and attorneys have been
frustrated for weeks that Tim Morrison, the U.S. attorney for the Southern District of Indiana, has not pursued legal action
to lock down Fair’s assets and those of Cochran and Durham.
Morrison’s office on Nov. 24 filed a civil
lawsuit alleging Durham operated Fair as a Ponzi scheme and seeking to seize his assets, including his Geist mansion. But
the office dropped the case six days later. “Having received appropriate assurance [that assets] are not being dissipated,
that litigation stopped,” Morrison said at the time. He has declined to elaborate.
His office filed the suit
a month after IBJ reported that Durham and Cochran had used Fair almost like a personal bank since buying it in 2002.
The story said that he, his associates and related firms rung up more than $168 million in insider loans—debt
that might imperil Fair’s ability to repay Ohio investors who purchased $200 million of the company’s
investment certificates.
Fair Finance has been closed since the FBI raided its offices Nov. 24.
Neither
Durham nor Cochran has been charged with a crime. Both men have denied wrongdoing.
IBJNews
Fair Finance investors force company into bankruptcy
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It scares me when legislators advocate for a change and follow it up with statement such as this:
"I'm hoping that maybe we'll be able to collect enough that we can kind of offset the impact of this loss of revenue to the state,"
Maybe we shouldn't be so quick to push this tax cut agenda until we at least have a system in place for online sales tax. This is akin to counting your chickens before they hatch... or rather, before you even have eggs in the basket!
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Well, well, well...talk about a conflict of interest. Well just another example of Republican cheating and cowardice. Dumezich needs to recuse himself, but then he and Romney are obviously afraid of any competition. Therefore, I definitely will not vote for Romney in the primary, nor will I support him. I will encourage my family and friends to also withdraw their support for Romney. I also am cancelling my contributions to the Romney campaign.
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Bloomie's actually just closed their MOA location.
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Circle Center Mall needs Bloomingdale Department Store. Bloomingdale is in the Mall of America in Bloomington, MN. Indiana needs a Bloomingdale store.
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All right to work really does is send a message to unions that they have to earn the right to represent a group of workers and more importantly show value for the dues collected. We all know there are good unions and poor ones, just like there are good employers an poor ones. why not agree to split political contributins by having members vote and split the donations proportionally. Rather than just demanding higher per hour wages, why not get some skin in the game and tie wages to performance. The old union business model is dead, come up with the right one and your members will support you. Continue to approach companies as us vs, them and you will loose. Our competition should be with our employer, but with our competitors in the international market.
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The Finance Firm
http://boccieri.house.gov/index.php?option=com_content&task=view&id=315&Itemid=64
Just think, if Cellstar had just paid their BILLS or gasp, distributed the cash in accordance with the plan of dissolution two years ago, Tim'd be sitting fatter and definitely happy in LA instead of living at his lawyers and showing up at mediation
with disheveled hair..
Hey Durham, looks like your crows are coming home to roost. Couldn't happen to a nicer chap!
DALLAS, Feb. 9 /PRNewswire-FirstCall/ -- CLST Holdings, Inc. (Pink Sheets: CLHI) announced today that it plans to file its Certificate of Dissolution with the Delaware Secretary of State on February 26, 2010, in accordance with its previously announced plan of dissolution. Immediately after the close of business on February 26, 2010, the company will close its stock transfer books and discontinue recording transfers of its common stock, except by will, intestate succession or operation of law. Accordingly, it is expected that the trading of the company's stock on the Pink Sheets will cease not later than the close of business on February 26, 2010.
Additional information regarding the company's plan of dissolution is available on its Proxy Statement on Schedule 14A, filed with the Securities and Exchange Commission on January 23, 2007 and subsequent filings with the Securities and Exchange Commission. The company's plan of dissolution contemplates an orderly wind down of its business and operations, the satisfaction of or provision for its liabilities and the distribution of any net assets to stockholders. The timing of any distributions to stockholders cannot be determined at this time.
Dontcha love Rafael Sanchez, he's DA MAN, baby
http://www.theindychannel.com/news/22502652/detail.html
http://www.stockwatch.com/newsit/newsit_newsit.aspx?bid=Z-C:*SEC-1686837&symbol=*SEC&news_region=C
Phillip Offill, the Texas lawyer convicted of securities fraud in Virginia, has lost his bid to get out of jail pending his sentencing. In a ruling handed down on Feb. 5, 2010, District Judge Liam O'Grady denied the former securities lawyer's motion for release, after prosecutors successfully argued that he presented too great a flight risk.
Mr. Offill, 51, has been in jail since Jan. 28, 2010, when a 12-member jury found him guilty on 10 counts of securities and wire fraud. During a nine-day trial, they heard evidence that he aided in several pump-and-dumps by providing insiders with millions of free-trading shares. The stocks included AVL Global Inc., a pink sheets listing that was run by Ontario father and son Peter and Tyler Fisher.
After the conviction, the U.S. Marshals Service took Mr. Offill into custody. The next day, he filed a motion seeking his release on the grounds that he did not represent a flight risk, and none of his convictions carried a mandatory jail sentence. He argued that his strong ties to the community, which included an 11-year-old daughter and an eight-year-old son, would ensure that he remained in the state.
Mr. Offill further argued that he had complied with all of his bond conditions in the 10 months between his arrest and his trial. He said that should the judge release him, he would abide by strict bond conditions, including house arrest at his home in Dallas, where he lives with his girlfriend. The motion also included letters from several relatives and friends stating that Mr. Offill did not represent any risk to flee.
Prosecutors reply
Prosecutors opposed Mr. Offill's motion for release on the grounds that he represented a higher flight risk once convicted. In a response filed on Feb. 4, 2010, they noted that Mr. Offill now faces a lengthy prison term. By their calculations, he should receive between 21 and 27 years in jail based on the seriousness of his offense. "Thus, his conviction provides significant incentive to flee that was not present while awaiting trial," the response stated.
Prosecutors also claimed that Mr. Offill's flight risk is higher because he has tried to hide his connections to offshore assets in the past. For example, he wrote an e-mail to an associate in August, 2004, stating that he had an offshore entity that allowed him to have the appearance of owning no offshore assets. Then, in testimony to the U.S. Securities and Exchange Commission, he said he had no offshore entities. "The defendant's shifting stories about his beneficial ownership and/or control of offshore entities and bank accounts greatly heightens the risk that he may flee if released," the response reads.
The prosecution also cites a disciplinary action launched by the State Bar of Texas, which found that people connected to Mr. Offill had tried to destroy documents in a securities case. The documents showed that a company had improperly issued free-trading shares. The bar found that Mr. Offill sent the documents to a former colleague, who had her husband dispose of them in a dumpster. The attempt was caught on film, and the State Bar suspended Mr. Offill for three years.
In addition, prosecutors noted that Mr. Offill was held in contempt of court in 2008 for violating a court order restraining assets of a client. He knowingly helped that client get around a freeze order so the client could access hundreds of thousands of dollars not otherwise available.
The prosecution asked the that judge keep Mr. Offill in jail, based on his past conduct. "His extensive pattern of lying under oath, obstructing justice, and seeking to subvert judicial orders strongly demonstrates that he cannot be trusted on release," the reply reads.
The judge granted the prosecution's request at a 23-minute hearing on Friday morning.
Offill's indictment
Prosecutors filed a 10-count indictment against Mr. Offill in the Eastern District of Virginia on March 12, 2009. In it, they claimed that he and another lawyer, David Stocker, obtained free-trading shares in nine companies, which they then transferred to insiders. The insiders used the shares in subsequent pump-and-dump schemes fuelled by spam and misleading news. In issuing the shares, Mr. Offill and Mr. Stocker improperly relied on a Rule 504 exemption, which is normally only available to accredited investors who do not plan to sell the stock.
In the case of AVL Global, Mr. Offill and Mr. Stocker provided 10 million shares of the company to Peter and Tyler Fisher. (They then sold some of their shares while touting a phony deal with the government of Botswana, according to a separate civil suit filed by the SEC. Both men deny any wrongdoing. Mr. Offill is also a defendant in that case.)
"Offill and Stocker devised a method to evade federal securities registration requirements ... in order to provide co-conspirators with millions of unregistered and unrestricted, i.e., 'free-trading,' shares of Issuers' common stock, which the co-conspirators could not legally obtain directly from the Issuers, for sale to the general investing public," the indictment read. In addition to AVL Global, the companies named in the criminal case were: Emerging Holdings Inc., MassClick Inc., China Score Inc., Auction Mills Inc., Custom-Designed Compressor Systems Inc., Ecogate Inc., Media International Concepts Inc. and Vanquish Productions Inc.
Mr. Offill and Mr. Stocker were the last of several men charged in the scheme. The others included Justin Medlin, a spammer from Paris, France, known as "The Kid." He received six years in jail for operating a spam business that touted Emerging Holdings, MassClick and China Score. The others were Michael Saquella, who received a 10-year sentence; Steven Luscko and Gregory Neu, who received five years each; Lawrence Kaplan, who received three years; Brian Brunette, who received one year; Anthony Tarantola, who received six months; and Henry "Hank" Zemla, who received three months.
Mr. Stocker, who was separately indicted in Arizona, pleaded guilty to the charges, and is scheduled to be sentenced on March 8, 2010. Mr. Offill will be sentenced on April 16, 2010.
Offill's Vancouver connections
Mr. Offill began working as a private securities lawyer in 1999, after spending 15 years as an enforcement lawyer for the SEC in Forth Worth, Tex. In his post-SEC work, he made connections with Vancouver securities lawyer John Briner and served as counsel for David Whittemore, a Texas man who touted Vancouver-based Yap International Inc.
According to government records, Mr. Offill filed the incorporation documents for Nexus Asset Holdings LLC, a company managed by Mr. Briner. The SEC mentioned Nexus in a civil suit against Mr. Briner and a Toronto man, Jay Budd, for the manipulation of pink sheets listing Golden Apple Oil & Gas Inc. The regulator claimed that Mr. Briner used Nexus to hold Golden Apple shares. Mr. Briner denies any wrongdoing, and Mr. Budd settled the case without a hearing, agreeing to a permanent penny stock ban. He did not admit any wrongdoing either.
Prior to his criminal charges, Mr. Offill also represented Mr. Whittemore in an SEC case. The regulator claimed that Mr. Whittemore was part of a phony voice mail pump-and-dump, in which potential investors received a hot stock tip purportedly left at the wrong number. The messages touted two companies, Yap International and Texas listing Triton American Energy Corp.