Investing and Banking & Finance and Tim Durham

Feds drop Durham asset-seizure suit

November 30, 2009

The federal government on Monday morning filed papers to dismiss a high-profile civil lawsuit that sought to seize Tim Durham’s assets, including his 30,000-square-foot Geist mansion and his 2008 Bugatti sports car.

Tim Morrison, the U.S. attorney for the Southern District of Indiana, said his office had filed the case Nov. 24 to ensure Durham’s assets would not disappear. “Having [received] appropriate assurance they are not being dissipated, that litigation stopped,” said Morrison, who declined to say who provided that assurance.

The short-lived case provided the first public disclosure about the case investigators are trying to build against Durham, 47, the co-owner of Akron. Ohio-based Fair Finance Co. FBI agents on Nov. 24 executed search warrants and seized records and computer equipment at Durham’s office in Chase Tower in Indianapolis and at Fair’s Akron offices, but a bureau spokeswoman would not say what agents were after.

The asset-seizure lawsuit alleged Durham, his associates and his companies misled purchasers of investment certificates by telling them their money would go toward purchasing low-risk consumer loans. In fact, court papers allege, the money went to carry out a Ponzi scheme, using money from new investors to pay what it owed prior investors, thereby “lulling the earlier victims into believing that their money was being [handled] responsibly.”

The suit was filed one month after IBJ published an investigative story questioning whether Fair, which purchases customer-finance contracts from retailers and other firms, had the financial wherewithal to repay purchasers of about $200 million in investment certificates. The company was allowed to sell the certificates—which range from six months to two years—only to Ohio residents.

The IBJ story reported that, since Durham bought Fair Finance from Donald Fair in 2002, he had used it almost like a personal bank to fund a range of business interests, some of them unsuccessful. The story noted that he and related parties owed Fair more than $168 million.


 

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