Saturday, December 19, 2009

More Fraud Allegations Against Tim Durham

He's been accused by the federal government of running a Ponzi scheme with his Ohio-based Fair Finance Company. The SEC is investigating him for securities violations regarding his acquisition and control of CLST Holdings. Now, Tim Durham is accused of pumping the price of a 1930 Duesenberg built for the publishing scion William Randolph Hearst that he sold at an auction in Auburn, Indiana in September for $2.9 million according to a report by the IBJ's Greg Andrews. He explains these latest allegations against Durham:

A Virginia businessman is suing Tim Durham, alleging he and other defendants committed fraud by manipulating the September auction of one of the Indianapolis businessman’s prized vehicles, a 1930 Duesenberg built for publishing scion William Randolph Hearst.

The plaintiff, James F. Scott of Charlottesville, Va., agreed to buy the vintage car for $2.9 million—a price Car Collector magazine called “amazing, particularly in these notoriously difficult times.”

The publication noted the price was $2.3 million higher than when it last changed hands, in 2003. After auction bids reached $850,000, just two people—Scott and Mark Hyman of St. Louis—dueled all the way up to the final price.

“The transaction has no relationship at all to ‘value,’” a Car Collector reporter wrote. “It’s just the stubborn determination of two bidders to have what I want when I want it, and having the resources to back it up.”

But now Scott—who participated in the auction at the Auburn Cord Duesenberg Automobile Museum in Auburn by phone—is crying foul. He alleges Hyman, owner of Hyman Limited Classic Cars, made his bids in consultation with Donald Lyons of Dowagiac, Mich.—“each of whom were stakeholders and/or owners of the automobile.”

As Andrews notes, the federal lawsuit filed in Fort Wayne does not detail the alleged financial relationship between Durham and the other bidder, Mark Hyman, who competed with Scott to purchase the classic car; however, he notes Durham attended the auction and sat with Hyman. "Worse, the suit says, the sellers have failed to provide Scott title to the Duesenberg, even though he has paid," Andrews writes. "According to the lawsuit, the auction house disbursed the full $2.9 million to Hyman," Andrews continues. "He then returned $1.95 million, and that money was routed to Lyons, a wealthy car collector who serves as Dowagiac’s mayor." "The suit seeks to rescind the sale and seeks triple damages—a sum approaching $10 million."

Dowagiac Mayor Donald Lyons becomes the latest politician tripped up in the scandals surrounding Tim Durham. The three-term mayor was re-elected to a fourth term last month.

5 comments:

I know said...

You might look at the Auction House's in Auburn, IN legal troubles as well with the fraud accusations leveled at them and the owners.

jtsnewo4 said...

AI,

Any chance these cars posted for sale on Indy Craigslist have any connection to Durham?

http://indianapolis.craigslist.org/cto/1516681982.html

http://indianapolis.craigslist.org/cto/1516674736.html

http://indianapolis.craigslist.org/cto/1516678156.html

http://indianapolis.craigslist.org/cto/1516671341.html

http://indianapolis.craigslist.org/cto/1516688814.html

Tom said...

THANK YOU for your story. Perfect Christmas for the residents of Dowagiac MI

Dowagiac Informer said...

Ok here we go: In todays Dowagiac Daily News Mayor Don Lyons wrote that he did pay the agreed upon price for the auto, he then went on to say the difference was divided up.
He also stated that they agreed to sell him the car for 1 Million dollars PRIOR to the auction.
What kind of auction is decided prior to the start.
Why did he pay the million dollars id he didnt win the auction?
Find out more at: http://www.dowagiacnews.com/2009/12/28/mayor-lyons-responds-to-civil-suit/
Something isnt right here

Dowagiac Informer said...

Here is a few questions that we have asked about this car purchase.
www.dowagiacinformer.com

Mayor Don Lyons press release to the Dowagiac Daily News didn’t offer any answers and added more questions.
Mr. Lyons stated that he was to be able to purchase the auto at a fixed price of 1 million dollars. But they already made a commitment to the Duesenburg Museum. Why would a car be up for auction when the decision was already made to sell the car for 1 million dollars?
Mr. Lyons stated that Tim Durham would sell him the car for 1 million if he was the winning bidder. If this was the case why didn’t Mr. Lyons keep bidding as long as it took to win the auction if he knew that he would get the car for 1 million?
After bidding 2.8 million the Mayor stopped bidding. Why? He was promised the for 1 million if he was the winning bidder?
“ Lyons did pay Diamond Auto Sales the agreed-upon price. Why would Mr. Lyons pay the price he agreed to if he didn’t win the auction?
If Mr. Lyons didn’t win the auction why did he pay the agreed-upon price, where did the money come from that he received for the remaining proceeds? What is the remaining proceeds?
Mr. Lyons stated that a representative from the museum knew about the fixed price. The Dowagiac Informer spoke with Jeff Turner Chairman of the Duesenburg Museum and he told us that the museum didn’t have any knowledge of the fixed price prior to the auction.
We agree with Mayor Lyons, the story will be straightened out during the court process.
.