Published March 25, 2009
A judge has approved a $952,000 settlement between the accountant for former investor Al Parish and the receiver in the fraud case that sent Parish to prison for 24 years.
Some 600 people lost about $66 million through Parish’s Ponzi scheme. A settlement document said receiver Greg Hays determined that he and investors who lost money in the investment scheme have potential claims against Parish’s accounting firm, Legare & Bailey. The settlement is a result of Hays’ negotiations with the firm regarding those potential claims.
Parish employed Legare & Bailey to prepare income tax returns for his investment firm, Parish Economics, between 1997 and 2004. The accounting firm received information from Parish that should have raised red flags about the legality of his investment activities, the settlement document said.
“Rather than looking into issues raised by these ‘red flags’ or insisting upon documentation to verify the accuracy of the information provided by Parish and Parish Economics, Legare & Bailey simply relied upon schedules and other information prepared by Parish,” the document said.
Legare & Bailey denies any wrongdoing, according to the settlement document.
The money from the accounting firm will be distributed to investors along with other money recovered from Parish’s assets and investments. Last month, Hays said that amount totaled about $8 million.
The settlement prevents individual investors from filing separate lawsuits against the accounting firm. Court documents said a “race to the courthouse” would not be in the interest of any victim. It would also require the accounting firm to incur legal costs for those potential suits.
Distributing the settlement through the receiver to all investors is more equitable and more efficient than having victims compete to recover individual sums, the agreement said.
Most of the $952,000 settlement will be paid by the accountant’s insurance policy. The firm’s principals will pay $27,000 of the total.
The $8 million in money available for investors includes $4 million from a settlement with Charleston Southern University.
Parish was an economics professor at Charleston Southern University. He pleaded guilty to three counts of investment fraud and was sentenced in June.