Legal Fallout Continues In FRM Case

Joe Gratz / Lambda Chi Alpha

The wake of the FRM Ponzi scheme collapse has created some complex and life-changing legal issues.

Bob Sanders of the New Hampshire Business Review has written a startling piece about the continuing–and unexpected–fallout from the Financial Resources Mortgage ponzi scheme. 

“The bankrupt estate of Financial Resources Mortgage Inc. – the Meredith company behind a multimillion-dollar Ponzi scheme – has been suing hundreds of the people who were victimized by the swindle for whatever FRM-related assets they may still have. In many cases, the victims are settling, forking over thousands more dollars in order to get on with their lives.

Jim Donchess, an attorney and law partner of trustee Steven Notinger, said the trustee is trying to fairly distribute the estate equally.

‘The simplest, cheapest and fairest thing is to bring all of the assets into the estate and liquidate it on a prorated basis,’ said Donchess. ‘Everyone should be treated the same.'”

Throughout the story, Sanders weaves in tales of the trustee crashing a victim’s bankruptcy proceeding, FRM foreclosing on properties even as the scheme faced imminent collapse, and seemingly smart investments gone sour in the aftermath.  And as the piece reveals, a complicated case just got much more so.