Legal Issues and Fraud and Criminal Charges and Courts and Tim Durham and Law

Fraud victims detail losses before Durham's sentencing

November 30, 2012

A 74-year-old former nun who now cares for young children so she can earn a living after being swindled out of her life savings said Friday morning that she can forgive convicted Ponzi schemer Tim Durham.

But Barbara Lukacik, who invested $125,000 with Akron, Ohio-based Fair Finance Corp., which was co-owned and operated by Durham, insisted that justice must be served.

“What has happened is shameful,” she said during Durham’s sentencing hearing. “Yes, the economy was weak, but that didn’t give you the right to steal not only my money but the money of all the people who invested in Fair Finance. And you say you haven’t hurt anyone; let’s be real.”

Lukacik and three other investors who lost their life savings to Fair Finance testified Friday on the behalf of federal prosecutors, who are asking that the 50-year-old Durham and accomplices Jim Cochran and Rick Snow receive sentences that will put them in prison for the rest of their lives.

Durham faces 225 years in prison, Cochran 145 years and Snow 85 years. The trio is set to be sentenced Friday afternoon.

Durham’s lawyer, John Tompkins, in a Monday court filing asked that the former Indianapolis businessman be given a five-year sentence that would include three years in prison followed by two years of home confinement.

The sentencing comes three years after FBI agents raided Fair Finance and Obsidian Enterprises, a Durham company located on the 48th floor of Chase Tower in Indianapolis.

A federal jury in June found Durham guilty on all 12 felony fraud charges stemming from the collapse of Fair.

Durham co-owned the firm with Cochran, who was convicted of eight of 12 felony charges. Snow, the company’s chief financial officer, was convicted on five of 12 counts.

Prosecutors charge that after Durham and Cochran bought Fair in 2002, they raided its coffers to fund their lavish lifestyles and to cover losses at failing businesses they owned.

The huge withdrawals—which were recorded as loans but were not repaid—left Fair without the means to repay 5,000 Ohio residents who purchased more than $200 million of the company’s unsecured investment certificates.

Early Friday morning, lawyers for Durham, Cochran and Snow argued for leniency, claiming Fair Finance contained more than $40 million in assets at the time of the FBI’s raid on Fair and Obsidian.

They also contended that it was not the intent of the three to defraud investors but simply to delay payments on their investments.

Further, John Tompkins, Durham’s lawyer, said his client had no control over the investments.

“Investors were investing in Fair, not with Mr. Durham individually,” he said. “He did not have control over the terms of the contract.”

After Tompkins questioned the number of victims defrauded, Judge Jane Magnus-Stinson lost a bit of patience with the defense, telling them she had read all 1,035 letters received from victims, some of which said they could not afford eye glasses or now were receiving heating assistance due to their losses.

“You need to tread a little bit lightly on that with me,” she said. “Trust me on that.”

Among those offering testimony Friday was Janey Kalina, whose father lost more than $170,000 investing proceeds from the sale of a family farm. She said her 86-year-old father lost everything, can't afford assisted living and now has nothing to pass on to his children.

Other victims who testified included Dewayne McVay, who lost $180,000, and Kristen Schroeder, who lost $60,000.

McVay said he lost $180,000 from a life insurance policy that he collected after his son, a Marine, was killed in an accident after his return from fighting in Iraq.

Federal attorney Winfield Ong said prosecutors wish they could recover more assets for victims.

In lobbying for the stiff sentences, prosecutors argue that at least $208 million in investor money had been squandered, while only about $6 million has been collected from Fair’s debtors, with almost no prospect for more recoveries.

“We would love to see some assets for the victims,” Ong said. “Unfortunately, that has not happened.”

But perhaps the harshest words were spoken by Lukacik, the retired nun from Ohio.

“Shame on you,” she said as she wrapped up her testimony.
 

ADVERTISEMENT

Recent Articles by Scott Olson

Comments powered by Disqus