Tuesday, May 11, 2010

Durham Diverted Fair Finance Assets To Pay Legal Expenses

Remember the on again, off again civil forfeiture action against alleged Ponzi scheme operator Tim Durham that interim U.S. Attorney Tim Morrison filed in the U.S. District Court for the Southern District of Indiana to freeze all of his assets? Morrison dropped the action intended to protect investors in Fair Finance and others owed money by Durham just days after filing it. Morrison decided Durham wasn't a risk. “Having [received] appropriate assurance they are not being dissipated, that litigation stopped,” said Morrison, who declined to say who provided that assurance. I suspected at the time Morrison's actions were motivated in part by a request by Durham's attorneys in order to free up money he could use to pay them. Well guess what? Durham dissipated assets to pay legal expenses.

A May 11 status report by the bankruptcy court in Ohio informs us of what has been taking place in the involuntary bankruptcy attorney some of the good guy attorneys filed there in an effort to help protect innocent investors because our government has told them to go to hell. Since the April 15 status hearing, the latest filing indicates that the trustee "discovered that hundreds of thousands of dollars worth of property purchased with proceeds of loans from [Fair Finance] to its parent entities were sold to pay legal expenses." One of Durham's law firms, Taft Stettinius and Hollister, withdrew as counsel in the bankruptcy matter without explanation other than "under these circumstances.". A letter from Michael O'Neill of Taft dated May 5 indicated that nobody at Fair Finance would be available to testify at the status hearing and, if such a person appeared, it would be necessary to invoke the Fifth Amendment against self-incrimination. The filing says Durham turned over some art work, about $132,000 in a Key Bank account and secured voluntary liens for all the vehicles Diamond Investments owns. Would that include this Bugatti listed for sale on e-Bay a couple of months ago.

A number of Durham's friends are probably quaking in their boots over the trustee's move to stay the dissolution proceedings for CLST in a Texas court. Carl Brizzi made a fast buck off that boiler room stock tip from Durham. There may be others as well. The sad part of this saga is that the good guy attorneys will probably wind up with little or nothing for their services, while Durham's attorneys were able to secure big retainers at a loss to the innocent investors thanks to Morrison's actions. Attorneys for victims of Durham's Ponzi scheme have had no other choice than to pursue civil remedies against him because neither the U.S. Attorney's Office or the Ohio Securities Commission will bring him to justice. Could someone please explain to me why nearly 18 months into the Obama administration, this hold-over Bush interim U.S. Attorney is still in office?

UPDATE: For your entertainment, I am sharing this e-mail from a Ohio securities regulator explaining the status of the case. It's another reason to have no confidence in your government any more.

Hello Mr. Welsh, thanks for your inquiry into Fair Finance. Any recovery of assets for investors is being handled by the bankruptcy court and the trustee Brian Bash, 216-621-0200. As for criminal violations, it is public knowledge that that is being handled by the FBI. As for our agency, anything being done by our enforcement section is confidential as a matter of law, so we cannot comment.

Shamikka R. Wyley
Division of Securities


Unknown said...

trustee "discovered" assets purchased with purported loans were sold.....golly gee whiz, I think you and Chris Worden and the Star and IBJ outted this several months ago....the Cockroach Naples sale, the various Durwood sightings of vehicles, etc.....

Indy4U2C said...

I bet Paul Page would represent Durham at a "discounted rate."

Unknown said...

hey, here's a good question for Timmy Morrison--how come ya let Durham sell those cars to "pay lawyers" when you are letting him blow hundreds of thousands of dollars on RENT for this palatial mansion that he allegedly moved his girlfriend and her family and himself into, when he already has another home in LA and a mansion at Geist and a house over in Lewisville?

What's wrong with ya, Timmy?


M Theory said...

There are a lot of people who would criticize me for this opinion, but I don't think it is safe to have your money anywhere except in metals.

There is no sales tax to buy it and there is no capital gains tax. That's because it is the currency of the banksters.

I think the stock market is rigged and I think that 1000 point drop was used as a warning bullet to our cowardly Congress to make them behave according to the wishes of Goldman Sachs.

I base this opinion on interviews I've heard with Max Kaiser.

Erich said...

The banksters are almost as bad as the lawyers. Private equity gets huge tax breaks, paying capital gains because they claim they don't do real work.

Precious metals gains are taxed.


Investment property. Investment property is a capital asset. Any gain or loss from its sale or trade generally is a capital gain or loss.

Gold, silver, stamps, coins, gems, etc. These are capital assets except when they are held for sale by a dealer. Any gain or loss from their sale or trade generally is a capital gain or loss.