Settlements or Summary Judgment of Fraud Charges Against Former Officers of First Merchants Acceptance Corporation

Fraudulent accounting scheme overstating net income by $76.7 million, or 729 percent. During 1996, uncollectible and delinquent accounts at First Merchants Acceptance began rising, and defendants/respondents were charged with employing a variety of methods to make more than 7000 accounts appear current, to avoid charging them off. Such methods included: treating accounts where both borrowers and cars were missing as repossessions; writing company checks to adjust customer account balances; and unilaterally deferring payments for months at a time. Defendants Kahn and Van Eyl both were criminally convicted and received prison sentences.