FRM scandal recovery fund tabled by NH House
CONCORD — Without debate, the House voted 324-20 to table a bill that would have established a recovery fund to help victims of the Financial Resources Mortgage scandal.
The House Commerce and Consumer Affairs Committee could not agree on a recommendation for the bill that would have repaid the fraud victims in light of the failure of state agencies to intervene in the Ponzi scheme that cost victims in New Hampshire about $33 million. Senate Bill 180, sponsored by former Senate President Peter Bragdon, R-Milford, passed the Senate unanimously, but the House commerce committee retained the bill last session to work on it.
The House committee rejected plans to change the source of the money to refund the victims and another to cap the fund at $5 million.
Lawmakers have been concerned the fund would set a precedent, but others said the magnitude of the FRM case was far greater than any the state had seen before and victims deserve some relief.
In the FRM case, investors and others contacted state regulators at the Bureau of Securities, the Attorney General's Office and the state Banking Department, and those complaints and concerns were largely ignored or passed on to other agencies without follow-up.
Many bills have been introduced in the last three or four years concerning the FRM scandal, including bills to establish a restitution fund for the victims, but they have failed to garner supportive votes.
Scott Farah, former president of FRM of Meredith, is serving 15 years in federal prison on wire and mail fraud charges, and his co-conspirator, Donald Dodge, who was president of CL&M, a mortgage servicing company, is serving six years for wire fraud.
The 324-10 vote to table the bill indicates lawmakers are not likely to take further action on it the rest of the session, which would kill it.