Wednesday, March 16, 2011

Tim Durham Indicted

Durham arrest photo from the L.A. Times
The U.S. Attorney's Office in Indianapolis is announcing a 12-count felony indictment against Ponzi scheme operator Tim Durham and his business associates, James Cochran and Rick Snow in what federal officials are describing as the largest corporate fraud investigation by the FBI in Indiana history. A 2:30 p.m. press conference has been called by the U.S. Attorney's Office to make the formal announcement. Durham is accused of bilking Ohio investors out of more than $200 million they invested in his Fair Finance Company. The indictment includes one count of conpiracy to commit wire fraud and securities fraud, 10 counts for wire fraud and one count for securities fraud. The charges, if proven, seek the forfeiture of property owned by the charged parties in an effort to recover the money lost by the investors. Read the indictment here.

UPDATE: The Star is reporting the SEC has also filed a civil lawsuit againt Durham in Indianapolis.

The lawsuit says Fair Finances three senior executives from 2005 through November 2009 raised about $230 million from at least 5,200 investors through the sale of investment certificates, and that those transactions were "materially false and misleading misrepresentations and ommissions concerning, among other things, Fair's profitability and financial condition, the safety and security of investors' principal and returns, and the use of investor proceeds."

The lawsuit continued, "In fact, the majority of the related parties did not make interest or principal payments to Fair and, ultimately, the defendants used new investor proceeds to repay earlier investors in the nature of a Ponzi scheme."

The lawsuit calls on the court to prevent the three men from being involved in future securities businesses and to "disgorge all ill-gotten gains derived from the unlawful activities," with interest, listed in the SEC complaint.
Here is the link for the SEC lawsuit filed in Indianapolis federal district court.

UPDATE II: Fox59 News is reporting that federal authorities took Durham into custody at 2:00 a.m. this morning at his L.A. home. He is scheduled to make his first appearance in court at 3:00 p.m. today where he is expedited to waive extradition back to Indianapolis. Durham will be represented by high profile criminal defense attorney Roy Black from Miami, Florida. His partner, James Cochran, is being represented by Jim Voyles. I would note the press advisory sent out today omits the name of U.S. Attorney Joe Hogsett. I previously noted his need to recuse himself from the caes because the law firm where he was a partner before becoming U.S. Attorney, Bingham-McHale, represented Durham's business interests in the bankruptcy trustee's action to recover money for the bilked investors while Hogsett was still a partner at the firm. Instead, the name of Tim Morrison, who served as Acting U.S. Attorney before Hogsett took office, appeared on today's announcement concerning the indictments.

UPDATE III: After Tim Morrison announced the indictments today, U.S. Attorney Joe Hogsett announced Tim Morrison was retiring from the office and being replaced by Josh Minkler, who has been an assistant U.S. Attorney in the office since 1994. You'll love this part. Before retiring, Morrison agreed to release Cochran and Snow on their own recognizance without requiring them to post bail after turning themselves in to federal authorities. Don't you love how the justice system works for the privileged few? Durham will be returned to Indianapolis after being taken into custody in L.A. to face the charges. I can't imagine he will be treated any differently than Snow and Cochran.

UPDATE IV: Check out this video on the IBJ's website of today's press conference. Tim Morrison comes across as a total buffoon when he is questioned by reporters about the indictment. I knew more about what the indictment said after scanning through it for ten minutes than this clown. No wonder the office is afraid to prosecute white collar crime. Thank heavens he won't be working on the case any more. Winfield Ong, the lead guy on the case, didn't sound any more convincing. Roy Black could eat these guys for lunch.



any idea why on earth this took so long?

Paige said...

Did anyone notice the man boobs on TD? HA HA HA HA not sure which will be worse, prison or the fact that with those boobs there will be no question as to who the woman in the prison is.

Tim Durham, you so deserved this. I hope you are not given bail and you have to sit in a jail cell knowing you have ruined not only the lives of your victims but that of your father, who has disappeared from sight from the alleged shame of you.

Downtown Indy said...

Notice Timmy has put on a LOT of extra poundage? Eating a lot of comfort food to easy his worries, perhaps?


they explained why it took so long. Thanks for the updates, Gary.

Advance Indiana said...

Morrison tried to make this case sound more complicated than it really is. Other larger, more complicated cases, such as Madoffs and Rothsteins, moved along at a much faster pace than this one. This one was intentionally slow walked to give these guys a chance to move money and assets that will never see the light of day in this investigation. The indictment was quite frankly a boring read compared to the trustee's civil lawsuit. Clearly, this office is using a fine scalpel to mitigate as much as possible the collateral damage from prosecuting this case. Lots of people who should be behind bars are going to skate and I will lay money these guys will got off with pretty light sentences in a plea deal. This office reserves its tough sentences for loser drug dealers and child pornographers, which is the only crimes they really like to prosecute in this office. They like going after people who can't afford a good lawyer and lack connections to people who matter.

Diana Vice said...

I have to wonder if any charges would have been filed at all had it not been for the enormous public pressure via the media and bloggers. We must keep up the pressure for Indiana politicians to pay back the stolen money they received in the form of campaign funds.

Advance Indiana said...

Or the work of the bankruptcy trustee Brian Bash, Diana Vice. As you and I know, whistle blowers spoon fed this information to the feds--practically by force. They were like small babies turning their nose up at food they don't like. After the bankruptcy trustee's filings laid to bare how these guys pulled off their fraud, there would have been riots in the street had they not brought charges against them.

Advance Indiana said...

I should add the feds claim their "undercover investigation" recorded misrepresentations the persons selling certificates of investment for Fair were making to potential investors over the phone. I know at least one whistleblower made calls to them to learn how they were marketing those certificates and gave that information to the feds. I noted Morrison did not include the help of whistle blowers in bringing about today's indictment when he knows damn good and well that is the only reason the feds even took a look at the case--and that was after the National Lampoon fraud had already been known. It remains quite a mystery why Durham never faced charges in connection with that stock fraud scam as well when his handpicked stooge, Dan Laikin, brother of Brightpoint's Robert Laikin, was running that operation. Laikin was already nailed on that long before the Fair Finance matter was unraveled. There is also the question of the CLST fraud down in Texas as well, which was also unraveled by a whistleblower. No, these indictments leave many troubling unanswered questions. I'm convinced the feds are protecting some very powerful and influential people from doing serious time for serious financial crimes they committed.