Wednesday, August 04, 2010

Brizzi Received Loans From Durham?

The damaging ties between alleged Ponzi scheme operator Tim Durham and Marion County Prosecutor Carl Brizzi grow tighter. The Daily Record in Ohio picks up on the ties that bind Durham and Brizzi  in its report on the meeting the bankruptcy trustee for Fair Finance had with creditors this week. Chris Leonard writes:

With a smaller crowd compared to May's standing-room only creditor's meeting, frustrated investors came to hear Brian Bash and seek answers to what has happened to their investments. For starters, the trustee and his legal team shot down the idea if it weren't for the FBI raid, Fair Finance could still be running.

Bash said on Nov. 24, the day of the FBI raid, Fair Finance had $565,000 in its bank accounts. It also owed $771,782 immediately to investors. Other immediate expenses included $401,888. The company also had a shortfall of $608,000 and had expenses due at the end of November totaling $630,000, Bash said.

"That means they were in the hole $1.2 million on the day of the FBI raid," legal counsel Kelly Burgan said.

Bash said investors poured $326 million into Fair Finance. Of that, $162 million of investment certificates were redeemed. About $150 million was lent to parent companies and related entities.

"The remainder was left to buy receivables paid on Fair for the purchase of the company and expenses," Bash said.

Bash noted how Fair Finance made loans to a series of companies and business associates of Tim Durham, Fair Finance co-owner. Some loans Durham made were political in nature, Bash noted, with loans going to Marion County Prosecutor Carl Brizzi and various Republican Party donations.

"Hopefully with political contributions there will be some searching of consciences," Bash said.

Durham also spent $14 million on real estate, $10 million on vehicles and about $3 million on the interior design of homes, Bash said.
Previously it had been disclosed that Durham helped bankroll Brizzi's re-election campaign with more than $200,000 in contributions. To my knowledge, this is the first disclosure by any one that Brizzi actually received personal loans from Durham as well. That might explain where Brizzi got the money to invest in various real estate deals, stock trading and Harry & Izzy's.

UPDATE: I'm told the trustee disputes the account reported in the Daily Record by Chris Leonard that he said loans were made to Brizzi by Durham. The trustee says he was referring to the political contributions, not loans, made to Brizzi.  

The bankruptcy trustee continues to leave little hope for Fair Finance's investors that any of their money will be recovered, particularly with the depressed real estate market and the hefty mortgages on some of the real estate:

In recent weeks Bash has come into possession of a series of fancy cars and artwork belonging to Durham. The trustee has some property under his control as well. Bash said the main way to raise money is through the sale of real estate, artwork and cars, and collecting on loans.

Real estate sales may be tough as some properties have mortgages ahead of them, which means the mortgage must be paid first, Bash said. And in some cases, coupled with a depressed real estate market, some property may not even be worth the effort. Bash noted one Indiana property valued at $4.9 million with a mortgage valued at $5.2 million.

We're not going to spend $100,000 to get back 10," Bash said.

1 comment:

Diana Vice said...

Why do you suppose no one as been charged with any crimes yet? It looks like the evidence is plentiful.