For years, Richard MacDonald's investments with Financial Resources Mortgage in Meredith seemed like a sure thing. His deposits, which totaled more than $1 million, helped finance building projects across Northern New England. Interest checks arrived in the mail every month. And MacDonald felt secure knowing the construction sites were within an hour or two of his Boston home.

So when he heard last week of Financial Resources's sudden closure, MacDonald decided to pay a visit to those properties - to see what stood behind his investments. That's how he found himself at an empty lot in Chichester last Tuesday. "I think I hold the mortgage on units 6, 7, and 8," MacDonald said, referring to the condo project he said he invested $150,000 in at the suggestion of Scott Farah, Financial Resources's president. "But there's nothing there. Nothing at all. No building permit has even been pulled."

MacDonald is one of dozens of people wondering what they're left with since Financial Resources Mortgage and a related company, CL&M Inc., shut down abruptly two weeks ago. The New Hampshire Attorney General's Office, the FBI and state banking and securities regulators are investigating the circumstances surrounding the companies' sudden closure.

The scope of Farah's dealings is unclear, but authorities say dozens of people claiming to have lost nearly $23 million have come forward so far. In addition, about 20 people have filed suit in New Hampshire courts, claiming Farah and his associates defrauded them of their savings. Among those who have sued:

• An extended family from Gilford whose members say they invested more than $3 million in real estate through Farah, including a $500,000 investment last month with no paperwork.

• A Texas man who gave Farah $1.6 million to finance, among other projects, a condo development in Peterborough, homes in Oklahoma and Maine, and a company called Earth Protection Systems.

• A Center Harbor woman who fears she has lost hundreds of thousands of dollars from her late husband's trust, money she said she relies on to support her in retirement.

The attorney general is trying to force Financial Resources Mortgage and CL&M into bankruptcy to make it easier to sort out what money, if any, is available to investors. Farah's lawyer, Michael Ramsdell, said he will be available for court appearances.

Farah has not been charged with any crime, and it's not known whether he profited illegally from the investments people made with him. Attempts to reach Farah and his family last week were unsuccessful. But interviews with investors, borrowers and co-workers depict a driven man who loved to broker deals: ski resort housing in Colorado, waterfront developments in Georgia, shopping complexes in Florida. His investors included lawyers, financial analysts and developers, as well as retirees and widowers.

"He was on the phone the second he woke up until the second he went to bed," said Daniel Borer, a Massachusetts developer who borrowed from Farah and also worked for him as a salesman. "He'd call someone up, ask them for $100,000, and if they said no, he'd say, 'Okay, just do 30 grand with me.' He was extremely directed."

But some of his investors claim that Farah also collected deposits on real estate that was never developed and promoted building projects that did not exist. When deals went sour and investors demanded their money back, Farah would often persuade them to reinvest in a new project, or even lend him more money, according to court documents.

"We're going to try to unwind all of the transactions between all the accounts, but it could take years to unravel all of this," said Peter McGrath, a Concord lawyer and former federal prosecutor who is representing some of Farah's former clients.

Making deals

At Financial Resources Mortgage, Farah specialized in a specific type of investment: "hard money" or "bridge" loans. They're typically short-term, high-interest loans with high upfront fees and funded by a pool of private investors. They have become common in large construction in recent years, as the financial crisis has led banks to avoid lending to big commercial projects, especially when the developer has poor credit or high debt.

Several developers who borrowed from Farah said they had no choice but to seek out a "hard money" lender who charged upward of 12 percent interest. After completing the project, builders would try to refinance the loan at more conventional terms or profit from the sale or leasing of the real estate.

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