STATEHOUSE – Four Indiana lawmakers have joined forces on a bill to safeguard Hoosier businesses against investment fraud. House Bill (HB) 1179 passed unanimously out of the House today with a 99 to 0 vote.
Authored by State Rep. Bob Heaton (R-Terre Haute) and co-authored by State Reps. Dale DeVon (R-Granger), Christina Hale (D-Indianapolis) and Justin Moed (D-Indianapolis), HB 1179 requires that financial statements submitted by a person wishing to work in securities must be audited by an independent certified public accountant.
The legislation was inspired by the circumstances surrounding Tim Durham, an area lawyer and financier found guilty last June of bilking more than 5,000 investors – most of them elderly – of around $230 million. He has been sentenced to 50 years in prison, although the conviction is being appealed.
“What was so disturbing about this case was the large number of people who placed their trust in this individual and his partners, only to see their hard-earned money lost to finance someone’s greed,” said Rep. Heaton. “As I watched this case unfold, I wanted to see if anything could be done to add an extra layer of consumer protection to existing state law and help Hoosiers from losing their savings in the future.”
In addition, the bill places a Class C Felony for violating the agreement entered into with securities state officials. Penalties for violation could run as high as eight years in prison and up to $20,000 in fines and civil penalties.
“This legislation would help prevent the types of fraud that took place in the Durham case,” said Rep. Hale. “It is about providing more transparency, and helping people do good business in a way that’s easily understood, particularly by those people who choose to invest their money through these avenues.”
“Tim Durham committed what has been called the largest white collar crime in our state’s history,” said Rep. Moed. “It is important that we learn what we can do to keep Hoosiers from falling prey to the type of greed on display here from ever happening again.”
The bill will go the Senate for further consideration.
“I appreciate the support from across the aisle with this bill, and through this bipartisan effect, we can ensure a reinforced safety mechanism to protect our Hoosier businesses,” said Rep. Heaton.