Sunday, January 19, 2014

Barnes & Thornburg Returns $35,000 To Fair Finance Trustee

Last November, I mentioned the belated issuance of subpoenas to two Indianapolis law firms that had performed legal work for convicted Ponzi schemer Tim Durham, including Barnes & Thornburg and Bingham Greenebaum Doll, the law firm at which U.S. Attorney Joe Hogsett was a partner immediately before his appointment by President Barack Obama. A status report filed by the Fair Finance bankruptcy trustee for a January 21, 2014 status conference states that the trustee has recovered $35,000 from Barnes & Thornburg since the last status conference in December. A motion approving a settlement with the law firm has not yet been filed with the Court.

Barnes & Thornburg's role in assisting Durham has always been a bit of a mystery. When the former acting U.S. Attorney Tim Morrison surprised legal observers by dismissing a civil forfeiture action his office filed only a week after it was filed contemporaneously with the FBI's raid on Durham's offices on November 24, 2009, rumors circulated that Barnes & Thornburg's Larry Mackey, a former federal prosecutor, had intervened on behalf of Durham to get the civil forfeiture action dismissed, a move that greatly hampered the recovery of the more than $200 million out of which Durham and his business associates had defrauded small investors in Ohio. Defrauded investors were compelled to file an involuntary bankruptcy petition against Fair Finance, a time-consuming legal process that led to the appointment of Brian Bash as bankruptcy trustee. Bash has successfully collected only a fraction of the investors' lost money, virtually all of which has been consumed to date by bankruptcy trustee fees and expenses.

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