Sunday, April 29, 2012

Slusser Walked On $600,000 Penalty Because Government Failed To Timely Collect It

Wouldn't we all be so fortunate if the IRS was as lax in collecting money we owe the U.S. government as the government was in collecting a penalty the Commodity Futures Trading Commission ("CFTC") was in collecting a $600,000 penalty against businessman Jerry Slusser for what a federal court described as "his unscrupulous business dealings with a group of German investors." After this blog questioned why several Indiana Republican candidates, including Gov. Mitch Daniels and then-Marion Co. GOP Prosecutor candidate Mark Massa, were relying on Slusser to raise tens of thousands of dollars for their campaigns, U.S. Attorney Joe Hogsett announced that his office had filed a lawsuit to collect the $600,000 judgment that had been affirmed by the 7th Circuit Court of Appeals against Slusser in 2004. The matter was assigned to Judge Tanya Walton-Pratt, who was asked by Slusser's attorneys to dismiss the action because the government waited beyond the 5-year statute of limitations to collect on the judgment. Walton-Pratt granted summary judgment last November in Slusser's favor.

Pratt's decision notes that the CFTC sent a notice to Slusser's counsel on April 26, 2004 demanding payment of the $600,000 in full. The CFTC threatened to refer the matter to the Attorney General, which "had an array of collection methods at its disposal." Pratt notes that Slusser failed to appeal the decision affirming the $600,000 fine on March 8, 2004 from which he had 15 days to appeal; instead, Slusser waited until May 12, 2004 to file his appeal. The 7th Circuit granted the CFTC's motion to dismiss almost two years later because Slusser's appeal notice was not timely filed on April 10, 2006. Inexplicably, the government waited seven years from the date of the original final decision before it brought its enforcement action against Slusser to enforce the $600,000 fine for a case it had expended enormous government resources to obtain. The government tried to claim that the statute of limitations was tolled while it awaited the 7th Circuit's decision on its motion to dismiss the appeal Slusser had failed to timely file. Judge Walton-Pratt ruled the law provided otherwise.

In granting Slusser's motion to dismiss the government's lawsuit to collect the $600,000 against him, Judge Walton-Pratt wrote: "Hopefully, the Government has other collection methods at its disposal to collect the fine that Mr. Slusser unquestionably owes. Unfortunately (that word bears repeating under the circumstances), sometimes otherwise meritorious claims are barred by the statute of limitations." It's absolutely unbelievable that the government simply dropped the ball in this fashion. Slusser, in effect, received absolutely no penalty for defrauding these investors. It's worth noting that Tim Durham was only brought to justice after the government was backed into a corner and forced to act. Both federal and state regulators had ignored whistle blower complaints against Durham for years before the wheels finally came off Durham's Ponzi scheme that cost small Ohio investors more than $200 million. It seems the government had forgotten all about the money Slusser owed it until this blog noted how much money he was showering on certain political candidates.

Incidentally, Slusser was represented by Indianapolis high profile criminal defense lawyer Jim Voyles. The bankrtuptcy trustee for Fair Finance had sued Voyles to collect a $25,000 retainer fee Durham had paid to him the trustee claims should have been paid to Fair Finance's investors. The trustee settled that claim against Voyles after his law firm agreed to repay the bankrutpcy trustee less than a third of the amount that it had received from Durham.

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