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Indianapolis accounting firm settles with Fair Finance trustee

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Somerset CPAs PC 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.

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  1. John, unfortunately CTRWD wants to put the tank(s) right next to a nature preserve and at the southern entrance to Carmel off of Keystone. Not exactly the kind of message you want to send to residents and visitors (come see our tanks as you enter our city and we build stuff in nature preserves...

  2. 85 feet for an ambitious project? I could shoot ej*culate farther than that.

  3. I tried, can't take it anymore. Untill Katz is replaced I can't listen anymore.

  4. Perhaps, but they've had a very active program to reduce rainwater/sump pump inflows for a number of years. But you are correct that controlling these peak flows will require spending more money - surge tanks, lines or removing storm water inflow at the source.

  5. All sewage goes to the Carmel treatment plant on the White River at 96th St. Rainfall should not affect sewage flows, but somehow it does - and the increased rate is more than the plant can handle a few times each year. One big source is typically homeowners who have their sump pumps connect into the sanitary sewer line rather than to the storm sewer line or yard. So we (Carmel and Clay Twp) need someway to hold the excess flow for a few days until the plant can process this material. Carmel wants the surge tank located at the treatment plant but than means an expensive underground line has to be installed through residential areas while CTRWD wants the surge tank located further 'upstream' from the treatment plant which costs less. Either solution works from an environmental control perspective. The less expensive solution means some people would likely have an unsightly tank near them. Carmel wants the more expensive solution - surprise!

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