Troubled financier Tim Durham can likely look forward to an equally troubled 2010. His reputation as a formidable businessman and leveraged buyout specialist is in obvious disarray. He is the subject of a federal investigation that accuses him of running a Ponzi scheme and defrauding Ohio investors of more than $200 million. And investor lawsuits against Durham and his company, Fair Finance, are growing in numbers.
Here’s a look back at the 2009 timeline of Durham’s current business and legal issues.
- January 2009. Investors in Obsidian Enterprises, a leveraged buyout firm owned by Durham in downtown Indianapolis, charge in five lawsuits that Durham defaulted on promissory notes and owes them more than $200,000.
- March 2009. Durham is accused of “self-dealing” after CLST Holdings, where Durham resides as chairman, acquires assets from Fair Finance, an Ohio company owned by Durham.
- October 2009. The Indianapolis Business Journal breaks a story that Durham has treated Fair Finance as his personal bank, using it to fund a range of personal and business-related investments. Investors who purchased investment certificates sold by Fair Finance are now owed more than $200 million.
- November 24, 2009. The FBI executes search warrants on two of Durham’s businesses – Obsidian Enterprises and Fair Finance. Boxes of documents and banking-related materials are collected and taken away by federal agents.
- November 25, 2009. Ohio securities regulators announce that Fair Finance will no longer be able to sell additional investment certificates to investors until it provides sufficient information that the company has the financial ability to pay them back.
- November 26, 2009. Republican candidate for Marion County Sheriff Tim Motsinger withdraws from the campaign amid the FBI investigation into Durham’s businesses. Durham previously served as the campaign finance chairman for Motsinger, as well as a large financial contributor.
- November 2009. Connections between Durham and Marion County Prosecutor Carl Brizzi come to light. Brizzi, a close friend of Durham, had previously agreed to serve on the board of director of Fair Finance and then changed his mind following news that Fair Finance was under investigation.
- November 28, 2009. The federal government files court papers alleging that Durham committed wire fraud and seeks forfeiture of various properties owned by Durham. Among the assets sought: Durham’s 30,000-square-foot mansion and his 2008 Bugatti sports car. The complaint states that Durham and various associates told prospective investors who purchased Fair Finance investment certificates that the money would go toward investments in low-risk consumer loans. Instead, the court papers allege that the money was used to carry out a Ponzi scheme, with money from new investors used to pay prior investors.
- November 30, 2009. The asset-seizure lawsuit is mysteriously rescinded by the federal government.
- November 30, 2009. Fair Finance’s headquarters in Akron and eight satellite offices in Ohio fail to reopen.
- December 1, 2009. CLST Holdings, a Dallas-based firm where Durham serves as chairman, reveals that the Securities and Exchange Commission (SEC) is investigating financial dealings between it and Fair Finance.
- December 4, 2009. Maddox Hargett & Caruso and David P. Meyer & Associates file the first class action lawsuit on behalf of investors against Durham and Fair Finance co-owner James Cochran, alleging that the two men, as well as other executives of Fair Finance, pulled tens of millions of dollars out of the company for their personal use.
- December 10, 2009. Businessman James F. Scott files a lawsuit against Durham, accusing him and other defendants of manipulating a Sept. 3 auction involving one of Durham’s prized automobiles: a 1930 Duesenberg.
- December 11, 2009. A press release from Fair Finance says it plans to resume regular billing and collection efforts with regard to its loan receivables business. It does not say if or when it will be able to do the same concerning sales and redemption of its investment certificates.
- December 16, 2009. The Indianapolis Star and the Akron Beacon Journal file a motion to unseal search warrant documents tied to the federal investigation of Durham and Fair Finance.
- December 22, 2009. A second lawsuit is filed on behalf of 36 Wooster, Ohio, investors against Durham and Fair Finance. According to the lawsuit, the investors are owed amounts ranging from $2,000 to $500,000.
- December 23, 2009. Reports surface that Durham’s Obsidian Enterprises will vacate its offices on the 48th floor of the Chase Tower in downtown Indianapolis. According to a story in the Indianapolis Business Journal, Obsidian, which subleases the space from JPMorgan Chase, hasn’t paid rent for “a couple of months.”