The state has greater needs than paying victims of fraud
Much has happened in the decade since the state dismantled the mortgage ponzi scheme of financial resources that robbed nearly 150 people of $ 20 million. A state audit called into question investigations carried out by officials of state banks and justice. One of the main actors wrote a book and ran for governor. And the ringleader lost several offers to serve his remaining prison sentence at his father’s house.
What has not happened is compensation for victims despite a 2016 law that created – but never funded – a reimbursement process. This would change in the proposed budget, which includes $ 10 million over two years for victims of FRM fraud. Supporters say the state’s inadequate investigation forces it to compensate victims.
Senator Gary Daniels, a Republican from Milford who chairs the Senate Finance Committee, said the state was able financially to follow through on something it pledged years ago.
“Number one, the economy is doing well,” he said. “This situation is something that should never have happened. The fact that we got the revenues the way they did, it’s the state’s due diligence to take care of that. “
The state attorney general’s office, which oversees the fund and is said to be responsible for investigating claims, said it should hire additional staff with financial investigation expertise to comply with the legislation. The department did not say how much it would cost.
Among Democrats who oppose the $ 10 million investment is Senator Lou D’Allesandro, a Manchester Democrat who co-sponsored the 2016 legislation that created the FRM Victims’ Fund. D’Allesandro said he was withdrawing his support for a number of reasons. He is upset. Republicans have refused to support programs he says take precedence, like dental benefits for Medicaid recipients. He opposes the use of taxpayers’ money to compensate victims. And, he opposes corporate tax cuts, which he says support the wealthiest taxpayers at the expense of others.
“It really bothers me what we do when we have other needs,” D’Allesandro said. “I empathize with people who have lost money, don’t get me wrong, but that’s not fair.”
Senator Cindy Rosenwald, a Democrat from Nashua, cited similar reasons for the party’s objection to the $ 10 million spending.
“This is not a financially prudent use of taxpayer dollars when we are faced with a huge problem of homelessness, families at risk of losing their homes and underfunded schools,” he said. Rosenwald said. “The last thing we should be prioritizing right now is funding a small group of investors with the public’s hard-earned money. “
Daniels called a decision to vote against the state budget on one item short-sighted. “I would step back and look at the whole thing,” he said, highlighting the millions of property tax breaks given to the town of D’Allesandro, as well as support for affordable housing and businesses in the city. ‘State.
In 2013, D’Allesandro joined a Senate Republican in sponsoring legislation that would have compensated victims using 20 percent of fines and penalties collected by state departments of Justice and Banking, and the Regulatory Bureau. securities. The bill failed in the House.
The 2016 legislation that created the FRM Victims Fund has proven unenforceable.
He asked the Charitable Trust Unit within the Attorney General’s office to hire a lawyer to administer the investigations into the claims and payments. There was a lack of funds for victims or the salary of an administrator. Instead, the administrator had to raise private funds for payments to victims and take 10 percent of that for a salary.
In late 2016, the director of the Charitable Trusts Unit told House and Senate leaders that only two people had applied. And the only one who interviewed dropped out after learning more about the job.
The budget proposed to the House and Senate on Thursday initially withdrew the $ 10 million for FRM victims from various state agencies. The Senate changed this to use general funds instead.
As part of their scheme, FRM owner Scott Farah and his partner Donald Dodge persuaded the victims to invest in commercial mortgages and used the money to pay off loans and other investors, and to cover expenses. personal. Both pleaded guilty and went to jail, leaving behind insufficient assets to cover nearly $ 20 million in losses. Dodge served his sentence in 2017. Farah, who was sentenced to 15 years, remains in federal custody with a release date of 2023.
Farah was twice denied a request to be released into the care of her ailing father so that he could care for him. A federal court dismissed the second claim last year.
Before the court made that ruling, COVID-19 nearly granted Farah the early release he sought. United States Attorney General William Barr had ordered federal prisons to “depopulate” facilities with non-violent offenders like Farah as a precautionary measure in the event of a pandemic. The New Hampshire Business Review reported in August 2020 that prison officials reversed their decision after victims learned of the plan and protested.