New state fund helps investment fraud victims

Victims of investment fraud in Ohio are now able to recoup some of the money they lost thanks to a new state recovery fund.

The Ohio Department of Commerce's Division of Securities announced the launch of the Ohio Investor Recovery Fund on Wednesday, making Ohio the fifth state to set aside funds for victims of securities-related crimes. Indiana, Maine, Montana and Vermont have similar funds.

"They term it 'White collar crime,' which is a term I detest, because it dresses it up. It is no doubt crime, and people are badly hurt," Assistant Stark County Prosecutor Kristin Mlinar said. "The victims of these crimes are often overlooked."

Securities fraud victims who are eligible for assistance through the fund can get back 25% of the money they lost, capped at $25,000. Joint account holders' losses are tallied based on the number of primary account holders — using a married couple as an example, each spouse can claim assistance for up to half of the full monetary loss in a joint account.

To be eligible for financial assistance from the fund, a victim must be an Ohio resident and identified in a final order from the division following an investigation, or in a criminal or civil case initiated by the Division of Securities in which a final court order has been given.

"We know that courthouse justice — while it feels good — doesn't always provide the monetary relief that these families need," Commissioner of the Division Andrea Seidt said.

Only victims identified in final orders issued after Sept. 30, 2021, are eligible for relief from the fund.

Victims must not have already received the full amount of their monetary loss via a restitution order. Victims must also not have taken part in, or profited from, the violations of securities laws addressed in the order.

If the division has already awarded a victim restitution assistance but the restitution order has been overturned in a court of appeals, then the victim must forfeit the financial assistance they were awarded. Victims of securities fraud can apply for financial assistance from the fund online at the Ohio Department of Commerce webpage.

Where does the fund

money come from?

The recovery fund was established as a part of the state's 2022-2023 budget bill Gov. Mike DeWine signed last July.

The Division of Securities added $2.5 million to the fund earlier this year, and will transfer another $2.5 million from its excess operating revenue and cash reserves into the fund every fiscal year "as needed," Seidt said. No taxpayer money is used in the fund.

If the fund falls to near or below $250,000, payments to victims will be suspended for the rest of that month and the following two months. At the end of the suspension period, the division will pay victims at a prorated amount based on how much money is currently left in the fund.

To receive financial aid from the fund, eligible victims must file a completed application with the division within 180 days of the final order for restitution, unless the division has granted an extension. Eligible victims must also respond within 60 days to requests from the division to provide additional documentation or information to process claims.