Thursday, July 03, 2014

U.S. Attorney Joe Hogsett's Former Law Firm To Repay Fair Finance Trustee $13,500

Convicted Ponzi schemer Tim Durham transferred $235,000 to Bingham Greenbaum Doll for legal advice during the time that U.S. Attorney Joe Hogsett was still a partner at the firm in the months following an FBI raid of his business offices in Indianapolis and Ohio. Obsidian Enterprises transferred $150,000 to the firm the month following the raid, Diamond Investments transferred $50,000 three months following the raid and Durham transferred $35,000 from his personal accounts four months following the raid. Bingham is just one of more than a dozen Indianapolis area law firms that received legal retainers from Durham and his companies in the months following the FBI raid, many of whom have made partial repayments of the funds without putting up a fight.

The trustee for the bankrupt Fair Finance Company, however, has filed a motion with the bankruptcy court in which he has agreed to accept a recovery from Bingham of a little more than 5% of the transferred amounts, or $13,500. It was hardly worth the wasted legal fees the trustee expended collecting such a paltry sum. Some local reporters have attempted to credit Hogsett for Durham's successful prosecution, but the fact was that he had to recuse himself from any participation in the case because of his law firm's past representation of Durham in the matter that was the subject of his prosecution. Hogsett was not confirmed as U.S. Attorney until September 2010, nearly 10 months after the FBI raid on Durham's offices.

Earlier this year, Barnes & Thornburg repaid just $35,000 of the $325,000 Durham and his companies transferred to the law firm in the months following the raid. Last month, the bankruptcy trustee filed a motion to accept a recovery of $12,500 for the $30,000 transferred to the law firm of Frost Brown Todd for its representation of one of Fair Finance's officers, Rick Snow, in an SEC investigation of Fair Finance and Obsidian Enterprises. The bankruptcy trustee also recently reached a settlement agreement with Snow, whereby he agreed to enter a judgment in favor of the bankrupt estate for more than $1.7 million.

Snow was convicted, along with Durham and his business associate, James Cochran, and is currently serving his sentence in a federal penitentiary in Pekin, Illinois. Snow's scheduled release date from prison is October 31, 2021. I wouldn't hold my breath waiting for Snow to repay the $1.7 million judgment. At the rate the bankruptcy trustee is going, the investors who lost more than $200 million can expect little more than the trustee will recover enough money to pay his attorney's fees and costs and leave nothing but a few pennies for them at most.

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