Published DateCONCORD — The plight of those bilked off nearly $30 million by Scott Farah and Donald Dodge, the principals of Financial Resources Mortgage, Inc. of Meredith, who are serving time in federal prison for working the biggest scam in state history, has inspired legislation to establish a restitution fund for victims of financial fraud.
"Those people really suffered," said Senator Lou D'Allesandro (D-Manchester), who with Peter Bragdon (R-Milford), president of the Senate, sponsored the bill. "The state screwed up and I would like to do what I can for them." He said that both he and Bragdon have spent time meeting with victims of FRM, many of whom "lost everything."
Senate Bill 180 would apply 20-percent of the all fines and penalties collected annually by the departments of Justice, Banking and Insurance as well as the Bureau of Securities Regulation to the fund, which would be supplemented by appropriations from the general fund.
To qualify for restitution, the fraud must have been adjudicated by a court, either state or federal, or by administrative proceedings conducted by a regulatory agency, and the party ordered to make restitution has failed to pay in full. Residents of New Hampshire victimized by financial fraud, or their survivors or dependents, would be eligible for restitution if the fraud was committed in New Hampshire or another jurisdiction, including foreign countries, that fails to provide comparable restitution.
Non-resident victims of frauds committed in New Hampshire, which describes many of those cheated by FRM, would also be eligible for restitution. Awards would not exceed $500,000 or half the financial loss, whichever is less.
The Bureau of Securities Regulation, within the Department of State, which collects approximately $1-million in fines and penalties arising from fraud, is expected to contribute the lion's share of the funding. By contrast, the Banking Department reported that it collected $788,384 in fines and penalties between 2009 and 2012, but fraud accounted for only one-percent of the total, or $7,884, of which 20-percent, or just $1,577, would be transferred to restitution fund. Likewise, the Insurance Department collected $2,500 for fraud violations between 2009 and 2012, representing $500 for the fund. The Department of Justice reported that it has no information on the fines and penalties its collects.
"There is never going to be enough to cover all the losses," said D'Allesandro. "But, I'm confident we'll be able to raise a fairly significant amount of money."
D'Allesandro said there was no serious opposition to the bill when it was heard by the Senate Executive Departments and Administration Committee earlier this month, but anticipated an amendment to the draft language would be offered before the bill reaches the Senate floor.