Legal Issues and Fraud and Investing and Banking & Finance and Tim Durham and Law

Durham's attorney alleges feds abused wiretaps

December 21, 2011

Financier Tim Durham asked a federal court on Wednesday to throw out all the charges against him on the grounds that the government misused wiretaps and then failed to come clean about its conduct.

In a filing in U.S. District Court in Indianapolis, Durham’s attorney, John Tompkins, wrote: “The government has engaged in a course of conduct that ... constitutes gross misconduct so severe that dismissal is warranted."

Tim Horty, a spokesman for U.S. Attorney Joseph Hogsett, said prosecutors have reviewed the motion and find it “meritless.” Horty said his office will file a response within 14 days.

The filing by Tompkins reveals that prosecutors began wire-tapping Durham in early November 2009, weeks before launching a surprise raid on his Chase Tower office and on Fair Finance’s headquarters in Akron, Ohio, two days before Thanksgiving.

Tomkins contends investigators began conducting recording tests on Durham's line and monitoring his communications on Nov. 2, four days before the government had received a warrant to do so. He said the government has provided implausible and inconsistent explanations for its conduct, which he contends violated Durham’s privacy rights and those of many private citizens he communicated with.

This is one of the biggest skirmishes between Durham and prosecutors since a grand jury in March indicted him, Jim Cochran and Rick Snow on charges of conspiracy to commit wire and securities fraud, wire fraud and securities fraud.

Durham and Cochran co-owned Fair Finance, while Snow was chief financial officer.

Prosecutors say that after buying Fair in 2002, Durham and Cochran raided its coffers to fund a lavish lifestyle as well as a host of money-losing businesses they controlled.

Authorities say Durham and Cochran pulled money out with such abandon that they left Fair without the means to repay Ohio investors who had purchased unsecured investment certificates from the company. More than 5,200 investors are owed more than $230 million.

Snow is accused of participating in the fraud, but unlike Durham and Cochran he isn’t accused of taking out millions of dollars in insider loans he lacked the means to repay.

Durham, Cochran and Snow deny wrongdoing.

Fair shut down following the November 2009 raid.

Durham is on house arrest while he awaits his trial, which is scheduled for June 2012.

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