Fraud Orchestrated By Three Senior Executives Of Fair...

SUMMARY OF KEY FACTS. This case involved a fraud orchestrated by three senior executives of Fair Finance Company (Fair) which had its headquarters at Akron Ohio. This fraud occurred from at least 2005 through November 2009 the defendants involved were the three senior executives –Timothy S. Durham, Chief Executive Officer, James F. Cochran, Chairman, and Rick D. Snow, Chief Financial Officer. These executives defrauded their investors by raising approximately $230 million from at least 5,200 investors through the sale of investment certificates by making materially false and misleading misrepresentations and omissions concerning, among other and returns, and the use of investor proceeds to purchase discounted consumer receivables. (SEC litigation release 2012) In 2002, two of the defendants Durham and Cochran acquired Fair finance company a successful finance company that earned profits by using proceeds from investors to purchase discounted consumer receivables. After the acquisition of Fair by the defendants, they changed the business model by using a steadily increased amount of investor’s proceeds to finance the unprofitable and failing business controlled by the Durham and Cochran under the disguise of loans –related party transaction or advances, to make interest payment to investors for the benefits of themselves, their families and friends. (SEC litigation release 2012) Fair Holdings’ accountants soon began questioning its financial statements, raising numerousShow MoreRelatedAccounting Fraud at Worldcom8726 Words   |  35 PagesKIRON Accounting Fraud at WorldCom WorldCom could not have failed as a result of the actions of a limited number of individuals. 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