Bills, fees for probe estimated at $3M

The legal and professional costs in the probe of the Al Parish Ponzi scheme have reached an estimated $3 million, leaving a projected $9 million that investigators hope to return to hundreds of his ripped-off investors.

A full accounting won't be available until the case wraps up months from now, possibly as soon as October. But the projections illustrate how costly such an investigation can be after the con collapses and an army of lawyers, accountants and asset managers come in to sort through the pieces. At one point last year, the fees and bills were reaching an average of more than $6,000 a day.

The Parish investigation broke in the spring of 2007 when the Securities and Exchange Commission launched a probe of the former Charleston Southern University economist and his unregistered offerings of investment pools. As many as 600 investors lost up to $66 million. Parish took much of the money to support his lifestyle, investigators said.

David Dantzler, an Atlanta attorney with the firm of Troutman Sanders — and the point person in the Parish probe — defended the legal and professional expenses by calling the hunt one of the more difficult he'd seen. Investigators at the outset had to proceed almost blindly, he said, because Parish claimed to have amnesia and was of limited help.

The pursuit took various paths as officials had to determine the status of multiple bank accounts and the values and ownership of thousands of pieces of Parish items, some stored as far away as Miami, New Orleans and California. They included paintings, Disney animation, jewelry, coins and rarities of all types, including silverware connected to Paul Revere.

"While we understand that investors have been terribly affected by this fraud, under the circumstances, we believe that we have added value and helped improve the ultimate outcome," Dantzler said last week.

Fees for some of the professionals involved in the case ran between $60 and $475 an hour, though Dantzler's $475 hourly rate was billed with a 10 percent discount.

The figures are based on filings sent to Chief U.S. District Judge David C. Norton for approval, and cover through this winter. Other costs have been incurred as well. A full accounting will be assembled at the closure of the case.

Charleston attorney Truett Nettles, who teaches collateral recovery at the Charleston School of Law and has followed the case as an observer, said legal fees and expenses that reach as high as 35 percent in debt collection or asset recovery are not considered unusual in the industry. A "50-50" ratio, where fees and expenses match the recovered assets, would be the extreme, he said.

Parish is serving a 24-year sentence at the federal prison in Butner, N.C., after pleading guilty to financial fraud. An appeal he filed challenging the length of his prison term was rejected earlier this spring.

There are expectations that the Parish case could wind down significantly this summer if the differences over the investor settlement plan can be worked out. A percentage return figure per investor has not been formally determined.

Some Parish victims reached last week said they were struggling to understand the finances of the recovery and settlement. Most said they were gratified Parish is behind bars.

"He's made his bed, and now he has to lie in it," said Karen Rath, who said she gave Parish $30,000 near the end of his scheme. "He's where he belongs."

Investor Joan Lapolla, who said she gave Parish $65,000 that she thought had tripled in value in the past 15 years, echoed Rath's sentiments.

"I'm satisfied where he is," she said. "May he stay there."

Reach Schuyler Kropf at skropf@postandcourier.com or 937-5551.