Legal Issues and Banking & Finance and Investing and Securities fraud and Courts and Tim Durham and Law

Durham asks court for five-year sentence

November 26, 2012
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Convicted Ponzi schemer Tim Durham is requesting a much shorter prison stay than the life sentence federal prosecutors want him to serve.

Durham, set to be sentenced Friday on fraud charges related to the collapse of Fair Finance Co., is asking for a five-year sentence that would include three years in prison followed by two years of home confinement.

Durham made the request in a lengthy, 60-page federal court filing Monday in which his lawyer, John Tompkins, asks Judge Jane Magnus-Stinson to carefully review the filing, because Durham’s “freedom, for the rest of his life, is at stake.”

A grand jury in March 2011 indicted Durham, business associate James Cochran and former Fair Finance Chief Financial Officer Rick Snow on charges of wire fraud, securities fraud and conspiracy to commit wire and securities fraud.

A jury convicted Durham on all charges and Cochran and Snow on some charges in June. All three are scheduled to be sentenced Friday.

According to Tomkins, a presentencing report is asking that Durham be sentenced to 225 years in prison and ordered to pay $209 million in restitution.

In his filing, Tomkins called the recommendation "absurd" and said the presentencing report "is heavily influenced by an erroneous loss calculation under the advisory guidelines."

"There is no need to incapacitate Mr. Durham beyond [five years] to prevent him from committing further crimes, given his extraordinarily low risk of recidivism, or to deter others from similar conduct," the filing said.

Durham and Cochran bought Akron, Ohio-based Fair in a 2002 leveraged buyout. According to court documents, Durham drained tens of millions from the company by making loans to himself and failing businesses he owned. Millions also went toward Durham’s mansions, a yacht, part ownership of an airplane and extravagant gambling trips.

In the years after Durham and Cochran bought Fair, the Ohio Department of Commerce’s Division of Securities repeatedly allowed the company to sell additional unsecured investment certificates to as many as 5,000 Ohioans. The sales continued even after Durham drained the firm of more than $100 million through insider loans—and even after it ceased providing audited financials to the division’s examiner.

In the Monday filing, Tompkins argues that Durham was a law-abiding citizen with no criminal history before the jury returned its guilty verdicts. He was hard-working, deeply involved in his community, and a businessman whose efforts had employed hundreds of people, Tomkins said.

He said Durham never intentionally defrauded the investors, and that actual losses they suffered were brought on by the recession as much as Durham's actions.

“In this case, there is absolutely zero evidence that Mr. Durham subjectively intended any investor to experience a loss, and that’s what the law requires if ‘intended loss’ is to be used for the sentencing calculation,” Tompkins said.
 

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