Donald Russell, a retired deputy sheriff from Wayne County, Ohio, took the stand in the fraud trial of Tim Durham and two co-defendants on Tuesday. He was the first of a handful of Ohio investors who together lost more than $200 million in Fair Finance who are expected to testify as government witnesses during the trial in U.S. District Court.
Russell started investing in 1991, and by the time the FBI raided Fair in 2009, he had deposited his life savings of $350,000. Even more painful: He had encouraged his mother, Willie Pearl Russell, to invest her life savings of $125,000. Russell said he let his guard down; he didn’t read the investment offering circulars and didn’t realize Durham and Cochran had bought the company in 2002 and changed its business model.
He got nervous in January 2009, when an interest check did not land in his account as expected. He asked a bunch of questions and eventually got a call back from co-defendant Jim Cochran, who reassured him everything was OK. The FBI raided and shut down Fair that November. His 82-year-old mother landed in the hospital the next day and died a month later. He believes stress from the financial loss contributed to her death.
After testifying on Tuesday, he shared his story with IBJ (see video above).