Investing and Banking & Finance and Tim Durham

NEWSMAKER: High-flying exec Durham ensnared in probe

December 26, 2009

Few people in Indianapolis embraced opulence like Tim Durham, the financier who partied with beautiful women aboard his yacht, built a 30,000-square-foot mansion, and amassed more than 70 cars.

Tim Durham

But now Durham, the son of a Seymour dentist, is getting attention for all the wrong reasons. The U.S. Attorney’s Office alleged in court papers filed Nov. 24 that one of his businesses, Ohio-based Fair Finance Co., operated as a Ponzi scheme.

FBI agents that same day seized records from Durham’s Indianapolis office and from Fair’s Akron headquarters. Fair hasn’t reopened since the raids, fueling anxiety among Ohio investors who purchased more than $200 million of the company’s short-term investment certificates.

The raids occurred a month after IBJ published an investigative story raising questions about whether Fair had the financial wherewithal to repay investors.

The article reported that since Durham bought the consumer-loan business in 2002, he had used it almost like a personal bank to fund a range of businesses, some of them unsuccessful. Loans to Durham and related parties now top $168 million, filings with Ohio securities regulators show.

The negative publicity also has been damaging to Republican heavyweights who received big campaign contributions from Durham—especially Marion County Prosecutor Carl Brizzi, who calls Durham a friend.

Brizzi, 41, recently acknowledged that he agreed over the summer to serve as a Fair Finance board member but decided to step down after Durham told him IBJ was going to press with the story questioning the company’s business practices.

Financial-disclosure statements also list Brizzi as owning stock in two firms closely linked to Durham—Los Angeles-based Red Rock Pictures Holdings and Dallas-based CLST Holdings Inc.

CLST, a former cell-phone distributor where Durham is chairman, also is under scrutiny by federal investigators. CLST in early December disclosed that the Securities and Exchange Commission subpoenaed a mountain of documents, including those related to a controversial transaction between the company and Fair Finance.

An attorney for Durham, 47, said his client does not believe he has done anything wrong. Durham has not been charged with any crime, but is facing a civil class-action lawsuit filed by investors seeking to rescind their purchases of investment certificates.•

 

 

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