Scott Farah, the head of New Hampshire-based failed mortgage firm Financial Resources Mortgage has been sentenced to 15 years in prison by a federal judge for duping hundreds of investors.
Farah, 47, was sentenced on Jan. 19 to 15 years in prison - or 5 years more than what the prosecutors had sought - by Judge Paul Barbadoro, who felt that though Farah has cooperated with the law enforcement officials in their investigation, one cannot ignore the fact that he destroyed the lives of over 200 people who trusted him with their money.
Farah's scheme only benefited himself, the judge said. His co-worker, Donald Dodge, 68, who had pleaded guilty to wire fraud, has been sentenced to 6½-years in prison. Dodge was let off lightly as Barbadoro believed Farah was the principal deceiver who drew Dodge into the scheme.
While Farah has been ordered to report to prison immediately, Dodge will report to prison on Feb. 11.
Farah, who has been accused of running the largest Ponzi scheme in New Hampshire history (at least $33 million), pleaded guilty to mail and wire fraud last fall and admitted to using investors' funds to pay off other loans, investors and his own personal expenses.
A Ponzi scheme is one in which corrupt money managers use funds from some clients to pay other clients. The scheme collapses when they are eventually unable to meet redemptions.