A new trial brief containing excerpts of wiretapped phone conversations reveal details in the case against disgraced Indianapolis businessman and Fair Finance owner Tim Durham. According to the transcripts, Durham discussed ways to hide information from investors as Fair Finance began to unravel in 2009. When investors asked about getting their money back, they were given excuses by Durham – excuses that he and partners admitted to each another were false.
Durham, James F. Cochran and Rick D. Snow now face 10 counts of wire fraud, one count of securities fraud and one count of conspiracy to commit wire and securities fraud. They are accused of running a Ponzi scheme that ultimately defrauded some 5,000 investors in Fair Finance Co. out of more than $200 million. Instead of paying investors, the men allegedly funded other businesses, as well as supported their own lavish lifestyles.
A trial is set for June 8.
As reported May 15 by the Indianapolis Star, the wiretapped phone conversations offer some interesting insight in the case. In one phone conversation that took place on Nov. 9, 2009, Cochran and Durham agreed to close Fair Finance’s Ohio office in two days with no prior notice to investors. According to the government filing, the men used Veterans Day as an excuse for closing, when in reality they were trying to hide the fact that there wasn’t enough money to pay Fair Finance customers when their investments came due.
“So we’re going to buy a day,” Cochran told Durham in a phone call, according to the transcripts. “And I told (a Fair employee) . . . make sure you don’t tell customers in advance.”
“Why?” Durham asked.
“He said ’cause they will run in on Tuesday,” Cochran replied.
“Oh yeah, good story,” Durham said, according to the transcript.
Ten days later, Durham and Cochran discussed what to tell a customer who was asking when he would receive interest payments. Cochran suggested telling the customer the redemptions were being processed.
“Don’t use that explanation too often because it’s really not true,” Durham told Cochran.
In yet another conversation, Durham and Cochran discuss how to blame delayed payments on “office miscommunication.”
“Yeah, we thought, yeah, just say it was a mistake, we told our office to put everything on hold until the authorization and they thought that meant put everything on hold,” Durham is heard saying.
“Yeah, I like that,” Cochran responded.
“So just a miscommunication,” Durham went on. “That’s how we’ll explain it.