Some investors in Tim Durham’s Fair Finance Co. filed court papers Thursday asking a court to appoint a receiver—a move aimed at preventing assets from disappearing while federal investigations into a possible Ponzi scheme continue.
Lawyers for investors made the request as part of a class-action lawsuit they filed in December seeking to recover money for Ohio residents who purchased $200 million in unsecured investment certificates from Akron, Ohio-based Fair.
The motion for a receiver was spurred by media and blog reports indicating Fair’s co-owners, Durham and fellow Indianapolis businessman Jim Cochran, may be unloading cars and other assets acquired with investors’ money.
“The remaining Fair Finance assets are in imminent danger of being siphoned away by Durham and Cochran now that their Ponzi scheme has been exposed,” according to the motion filed by the Columbus, Ohio, law firm David P. Meyer and Associates.
Investors have been frustrated with Tim Morrison, the U.S. attorney for the Southern District of Indiana, for not pursuing legal action to lock down Fair’s assets and those of Cochran and Durham
Morrison’s office on Nov. 24 filed a civil lawsuit seeking to seize Durham’s Geist mansion and other assets, but dropped it six days later. “Having received appropriate assurance [that assets] are not being dissipated, that litigation stopped,” Morrison said at the time. He has declined to elaborate.
His office filed the suit a month after IBJ reported that Durham and Cochran had used Fair almost like a personal bank since buying it in 2002. The story said that he, his associates and related firms rung up more than $168 million in insider loans—debt that might imperil Fair’s ability to repay the Ohio investors.
The motion seeking a receiver was filed in Summit County, Ohio. It asks that the receiver take control of Fair and and its parent, Fair Holdings, which is owned by Durham and Cochran.
The FBI on Nov. 24 raided the offices of both firms. Neither man has been charged with a crime. Each has denied wrongdoing.