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Category Archives: Fair Financial

Judge Has 3 Words for Tim Durham: Deceit, Greed, Arrogance

In the end, Tim Durham’s own arrogance and sense of entitlement may have been the deciding factor to his fate. In handing down a 50-year prison sentence for Durham, Judge Jane Magnus-Stinson offered three words to describe the disgraced businessman, 50, and his crimes in conning more than 5,000 unsuspecting Fair Finance investors out of $250 million: Deceit, greed, and arrogance.

It’s quite a fall for Durham who once famously threw lavish parties at his Geist Reservoir mansion and drove expensive Bugatti cars.

Durham offered only a brief statement to the court before Judge Magnus-Stinson announced his sentence. What he did not offer, however, was an apology to his victims. Instead, Durham stated that he felt “terrible that they all lost money. My family has lost all of its investments.”

Durham’s 50-year sentence means he’ll likely spend the rest of his life behind bars. Unlike state prisoners, federal inmates are required to serve 85 percent of their sentences. Durham will have to live to the age of 93 to survive his sentence.

Judge Magnus-Stinson also sentenced Fair Finance co-owner Jim Cochran, 57, to 25 years in prison, and Fair Finance CFO Rick Snow to 10 years.

Durham attorney John Tompkins says he plans to appeal his client’s sentence within the next 14 days.

Before Durham’s sentence was announced, several Fair Finance victims spoke about the crime and its effect on their lives. One of the victims was Barbara Lukacik, a 74-year-old nun who lost her life savings of $125,000 to Durham’s scheme.

“What has happened is shameful,” she said in a Nov. 30 story by the Indianapolis Business Journal. “Yes, the economy was weak, but that didn’t give you the right to steal not only my money but all the victims of Fair Financial to use as you wish, for serious greed and pampering. And you say you haven’t hurt anyone; let’s be real. I honestly believe justice must be served because it’s the righteous thing to do.”

As she concluded her testimony, Lukacik turned toward Durham and said, “Shame on you.”

Following the sentencing, Lukacik stated to WRTV Channel 6 that she disappointed Durham failed to show any signs of remorse.

“If he had said he was sorry, that would have meant something,” she said.

 

 

Durham Associate Gets 25 Years

James Cochran, the business associate of disgraced Indianapolis financier Tim Durham, has been sentenced to 25 years in prison for his role in a Ponzi scheme that swindled about 5,000 investors out of more $200 million.

U.S. District Judge Jane Magnus-Stinson sentenced Cochran about an hour after she sentenced Durham to 50 years in prison.

In June, a jury found Durham, Cochran and another business associate, Rick Snow, guilty of securities fraud and conspiracy.

Prosecutors say the three men used Ohio-based Fair Finance as their personal piggy banks, orchestrating an elaborate Ponzi scheme to steal investors’ money to buy mansions, fancy cars and other luxury items for themselves.

Tim Durham Sentence: 50 Years in Prison

The party is really over for convicted Indianapolis Ponzi schemer Tim Durham. The once big spender will be spending the next 50 years of his life in prison. U.S. District Judge Jane Magnus Stinson announced Durham’s sentence today at approximately 2 p.m.

Durham, 50, was convicted in June of securities fraud, conspiracy and 10 counts of wire fraud for bilking 5,000 investors in Ohio-base Fair Finance out of more than $200 million. Many of the investors were elderly.

Judge Magnus Stinson’s sentence was much less than the 225 years that the state was pursuing. The judge noted, however, that it was “effectively” a life sentence. She told Durham it was easy for him to donate to charity and politicians because he was using other people’s money and that he was trying to play the system.

Durham took the stand on Friday, but no one testified on his behalf. Ten individuals, including Durham’s mother, did write character letters for Durham in which they described him as gentle, loving, charitable and unselfish.

While on the stand, Durham stated that he felt “bad” for investigators, telling the court that he didn’t know people invested on an individual basis and wishes he was clearer about some things.

Earlier this week, Durham’s attorney, John Tompkins, lobbied unsuccessfully for his client’s sentence to reduced to five years.

“We believe that (five years) is well-supported by the law,” Durham’s attorney John Tompkins told The Indianapolis Star. Tompkins argued that Durham deserves a shorter sentence because “the seriousness of Mr. Durham’s offenses is substantially overstated.”

Prosecutors, meanwhile, saw Durham’s crimes in a different light.

“Durham is responsible for one of the largest and most brazen frauds in Midwest history, and due to its terrible impact on the victims, also one of the most egregious frauds in history,” prosecutors stated in initial charging documents.

Durham and Fair Finance co-owner Jim Cochran (who was convicted on eight of 12 felony charges) bought Fair Finance in a 2002 leveraged buyout. Following the purchase of the business, court documents say Durham drained tens of millions from Fair Finance by making loans to himself and several failing businesses he owned. Millions of dollars also went toward Durham’s mansions, including one in the swanky neighborhood of Geist Reservoir in Indianapolis, a yacht, part ownership of an airplane, remodeling of his garage and $150,000 at one casino.

Rick Snow, Fair Finance’s chief financial officer, was convicted on five of 12 counts.

Cochran and Snow also will be sentenced Friday.

Tim Durham’s Fate To Be Decided This Week

Friday is a big day for former Indianapolis financier and Fair Finance owner Tim Durham. Convicted in June of securities fraud, conspiracy and 10 counts of wire fraud for conning about 5,000 investors out of more than $200 million, Durham is set to be sentenced in U.S. District Court in Indianapolis.

Durham is facing a possible sentence of 225 years in prison, the maximum sentence recommended in a federal probation report.

“Durham has earned a place among the greediest, most selfish, and remorseless of criminals,” federal prosecutors wrote in documents filed Monday.

Earlier this week, Durham’s attorney, John Tompkins, filed documents asking for a five-year sentence for his client. Among other things, Tompkins argued that Durham deserves a shorter sentence because “the seriousness of Mr. Durham’s offenses is substantially overstated.”

The 5,000 investors in Fair Finance may think otherwise.

Tim Durham Objects to Proposed 225-Year Sentence

Convicted Ponzi schemer Tim Durham is crying foul over a presentencing report that recommends the disgraced Indianapolis businessman spend 225 years in prison and pay more than $200 million in restitution to victims of Fair Finance Company.

The presentencing report is not available to the public. However, Durham’s attorney, John Tompkins, revealed contents of the report in a 38-page filing on Oct. 31, calling the proposed sentence “absurd.”

Durham’s fate, along with co-defendants Jim Cochran and Rick Snow, will be decided on Nov. 30 by Judge Jane Magnus-Stinson. In June, a federal jury found Durham guilty on all 12 felony charges stemming from the collapse of Akron, Ohio-based Fair Finance.

Prosecutors in the case allege that after Durham and Cochran bought Fair Finance in 2002, they used it as their own personal piggy bank to fund their lavish lifestyles and to cover financial losses at various businesses they owned.

Prosecutors say that the huge withdrawals allegedly made by Durham were recorded as “loans,” and ultimately left Fair Finance unable to repay 5,000 Ohio residents who purchased more than $200 million of the company’s unsecured investment certificates.

FBI agents raided and shut Fair Finance down in November 2009.

 

Fair Finance’s Tim Durham Arrested, Indicted

Disgraced businessman Tim Durham has been arrested on charges of defrauding at least 5,000 Indiana and Ohio investors out of hundreds of millions of dollars. Durham, who is co-owner of Fair Financial, is accused of running a $200 million Ponzi scheme. The case against Durham is the largest corporate fraud case in Indiana’s history.

For more than two years, Durham has been the subject of a federal investigation for allegedly using Fair Finance – and the money that investors put into Fair – as his personal piggy bank. In November 2009, the FBI raided the offices of Fair Financial, as well as Durham’s other business, Obsidian Enterprises.

Durham’s March 16 arrest occurred at him home in West Hollywood, Calif., at about 2 a.m. He is scheduled to appear in a Los Angeles courtroom later this evening, where he intends to plead not guilty to one count of conspiracy to commit wire and securities fraud, 10 counts of wire fraud and one count of securities fraud. According to news report, Durham will waive extradition to Indiana.

It’s All Over For Fair Finance, Tim Durham; 13,000+ Claims To Be Filed

The debacle involving Fair Finance and owner Tim Durham just keeps getting bigger. There are more than 13,000 outstanding Fair Finance investment certificates valued at more than $208 million, according to a just-released report from Brian Bash, the court-appointed trustee of Fair Finance. Translation: More than 13,000 claims will be filed as part of the Chapter 7 bankruptcy proceeding.

The offices of Fair Finance have remained closed since Nov. 24, after federal agents seized banking records and company computers. On that same day, the U.S. Attorney’s Office in Indianapolis filed court papers alleging that Fair Finance operated as a Ponzi scheme, using money from new investors to pay off prior purchasers of the investment certificates.

In other Fair Finance news, friends and business associates of Durham who accepted millions of dollars in loans from his company could be facing problems of their own.

As reported March 6 by the Indianapolis Business Journal, the trustee in the case, Brian Bash, is going to try and turn Fair Finance’s assets into cash wherever possible. That means firms and companies with outstanding loans from Fair Finance can expect to hear from Bash in the near future.

Extending loans enabled Durham to continue listing the money as assets on Fair Finance’s balance sheets, which in turn gave investors the false impression that the company was fiscally sound.

Moreover, Fair Finance had no outside auditor. In other words, there was no one to sound the alarm that there was something awry with Fair’s accounting procedures.

The various people and companies listed as owing money include Scott McKain, former vice chairman of Durham’s Indianapolis-based business Obsidian Enterprises; Joan SerVaas, Durham’s ex-wife and owner of Curtis Publishing; Jeff Osler, Durham’s brother in law and owner of Geist Sports Academy; Henri Najem, an Indianapolis restaurant owner who is best known for his Bella Vita restaurants; and MyGhetto.com, a social-networking site created by the rapper Ludacris, a close friend of Durham’s.

As reported in the IBJ article, some of the people and firms listed cite inaccuracies with the trustee’s list.

Fair Finance Agrees To Receivership

Embattled businessman Tim Durham apparently will not oppose the appointment of an interim receiver for Fair Finance and its parent corporation, Fair Holdings. The story was first reported on Feb. 11 by the Akron Beacon Journal. The news comes one week after the law firms of Maddox Hargett & Caruso and David P. Meyer and Associates Co. filed paperwork asking a Summit County, Ohio, court to appoint a receiver for Fair Finance and Fair Holdings.

Attorneys for Fair Finance deny the company has been involved in any wrongdoing.

The offices of Fair Finance have remained closed since Nov. 24 when the FBI raided the company’s Akron headquarters and the offices of a related business in Indianapolis, Obsidian Enterprises. According to court records, federal investigators suspect that Fair Finance was being operated as a Ponzi scheme.

Meanwhile, a federal judge is weighing whether to unseal search-warrant documents related to the FBI’s November raids. On Feb. 11, during a court hearing in Youngstown, Ohio, a representative of the U.S. Attorney’s Office in Indianapolis argued that unsealing the search warrants could damage the federal government’s ongoing investigation.

Motion To Appoint Receiver Filed In Fair Finance Case

As investigations continue into the business dealings of Tim Durham and Fair Finance, a motion has been filed on behalf of some Fair Finance investors to appoint a receiver in the case. The motion was filed Feb. 4 by the law firms of Maddox Hargett & Caruso and David P. Meyer and Associates.

“The remaining Fair Finance assets are in imminent danger of being siphoned away by [Tim] Durham and [Jim] Cochran now that their Ponzi scheme has been exposed,” said David Meyer of David P. Meyer and Associates, in a Feb. 4 article in the Indianapolis Business Journal.

In December, Meyer’s law firm, along with the law firm of Maddox Hargett & Caruso, filed a class-action lawsuit on behalf of investors who purchased $200 million in unsecured investment certificates from Akron, Ohio-based Fair Finance. Fair Finance is owned by Durham and Jim Cochran.

Following the November FBI raids on Fair Finance, investors have grown increasingly fearful that the company’s owners may be spending what remains of the company’s finances. The Akron offices of Fair Finance have been closed since the FBI raids, with no word from Durham on when or if his company will ever repay investors.

In December, Ohio Congressman John Boccieri called for an asset freeze on Fair Finance and its owners. He reiterated that plea in late January at a town hall meeting held in Ohio. As reported Jan. 27 by the IBJ, Boccieri was seeking the asset freeze after learning Fair Finance co-owner Jim Cochran had posted an ad on Craigslist for an estate sale at his $3.5 million Naples, Florida, residence. According to the article, the sale went as planned, with Cochran selling off everything from Bentley and Porsche automobiles to a 28-foot boat and a large potted plant.

The Feb. 4 motion for a receiver was filed in Summit County, Ohio. It asks that the receiver take control of Fair Finance and its parent company, Fair Holdings.

Fair Financial, Tim Durham’s Future Could Be Numbered

Tim Durham’s Fair Finance Company has officially withdrawn its request from the Ohio Department of Commerce’s Division of Securities to sell additional investment certificates to Ohio investors. The company has remained on lock down since Nov. 24 after federal prosecutors filed court papers accusing Durham of running a Ponzi scheme. That same day, FBI agents stormed Durham’s Indianapolis office and the Akron, Ohio, offices of Fair Financial where they seized boxes of banking records and computer equipment.

No one has been charged with criminal wrongdoing.

The FBI raids occurred one month after IBJ reporter Greg Andrews published an in-depth investigative story that raised questions about the financial health of Fair Financial and whether the company had enough money to repay the $200 million it owed to Ohio investors.

A number of stories have since come forth citing evidence that Durham and others used Fair Finance as a personal bank for years.

“We concluded some time ago that Ohio would never allow Fair Finance to register any more securities,” said Thomas Hargett of Maddox Hargett & Caruso P.C., in a Jan. 13 article in the Indianapolis Star. Hargett and David P. Meyer & Associates Co. are working to get class-action status on behalf of investors. Their complaint, filed last month in Akron, Ohio, accuses Fair Finance and its officers of violating the Ohio Securities Act and other breaches of legal duty that included duping investors into buying investment certificates from Fair Finance.

Late last month, more than 1,000 Fair Finance investors packed the Fisher Auditorium at the Ohio Agricultural Research and Development Center in hopes of getting some answers about their investments.

The meeting was spearheaded by Ohio Congressman John Boccieri, who invited area attorneys, Ohio securities officials and representatives from the FBI to answer questions and offer guidance to investors.

As reported Jan. 27 by The Daily Record, one investor asked what was being done about potential asset liquidations, noting that Durham’s 98-foot yacht is reportedly up for sale. Other investors wanted to know why the U.S Attorney’s Office decided to drop the civil suit against Durham and unfreeze his assets.

“Reports have said that Mr. Durham doesn’t want to be known as one of the richest men in America, he wants to be the richest man in America,” Boccieri said in the article. “I find that absolutely egregious and that people would do this and perpetuate such acts on people who have put their life savings in these types of investments.”

If you have questions about investments in Fair Finance, contact us.


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