Tim Durham says he’s ruined financially, but he’s not cutting corners lining up legal firepower to defend himself.

Durham has hired famed criminal defense attorney Roy Black of Miami, lawyers representing the Indianapolis financier in civil litigation confirmed.

Black, 65, who did not return calls, is perhaps best known for winning the acquittal of William Kennedy Smith on rape charges in Palm Beach, Fla., in 1991. More recently, he got charges dropped against Rush Limbaugh, who was accused of shopping for doctors to obtain thousands of Oxycontin pills, and won acquittal for three-time Indianapolis 500 champion Helio Castroneves on income-tax-evasion charges.
 

Black

It’s not clear how the 48-year-old Durham is paying Black, who legal observers say could end up billing well over $1 million in fees.

In an interview on WTHR-TV Channel 13 this month, Durham said the collapse of Fair Finance Co., the Akron, Ohio, firm he owned and led, wiped out his fortune. “I probably will have lost my entire net worth,” he said.

Durham used Fair like a personal bank to fund other businesses and a lavish lifestyle and now owes the firm tens of millions of dollars. His failure to repay the money has resulted in huge losses for the 5,000 Ohio residents who bought more than $200 million in unsecured investment certificates from the company.

Asked how Durham could afford such a marquee attorney while not meeting his obligations to Fair, Kelly Burgan, a Cleveland attorney who is helping the company’s bankruptcy trustee scrape together assets for investors, said: “That’s a good question. I would like to know the answer myself.”

She added: “Anything Tim Durham spends a lot of money on begs the question of where the money is coming from.”

Gary Sallee, an Indianapolis attorney representing Durham in civil litigation, suggested Durham was getting help from people sympathetic to his cause.

“To be honest, I don’t know” where the money is coming from to pay Black’s legal fees, Sallee said. “But I do know there is a lot of support for Tim Durham among friends and others who may believe there has been overreaching” by investigators.

One of the people apparently helping is retired Indianapolis businessman and former City-County Council President Beurt SerVaas, the 91-year-old father of Durham’s ex-wife, Joan SerVaas. “I think he asked Dad for a loan. Dad might have lent him money,” Joan SerVaas told IBJ. She added: “If he gets through all this, he might be able to pay it back.”

Insurance could help

Other attorneys who don’t represent Durham say it’s possible some fees billed by Black’s law firm, Black Srebnick Kornspan & Stumpf, ultimately will be covered by directors-and-officers errors and omissions insurance purchased by his companies. They also say celebrity attorneys like Black are so eager to take on high-profile cases that they sometimes work for surprisingly modest sums.

Black’s hiring nudges out of the picture Durham’s previous criminal defense attorney, Larry Mackey, a partner at Barnes & Thornburg who co-chairs the firm’s White Collar Crime Defense Practice Group.

Mackey, a heavyweight in his own right, is best known for serving on the prosecution team that convicted Oklahoma City bombing suspects Timothy McVeigh and Terry Nichols. Hourly fees for top-tier local attorneys like Mackey approach or surpass $500 an hour, legal observers say.

Probe continues

It’s not clear what, if any, charges Durham will face. Last November, on the same day FBI agents raided Fair’s headquarters and Durham’s office atop the Chase Tower, the U.S. Attorney’s Office in Indianapolis filed court papers alleging Durham ran Fair as a Ponzi scheme, selling new investment certificates to pay off prior investors.

Prosecutors have said little since, though Tim Morrison, first assistant U.S. attorney, confirms the investigation continues. He declined to speculate when it will conclude, though another person familiar with the probe said it was on the verge of wrapping up.

In his interview with Channel 13, Durham blamed the raid for unraveling the business. “It’s hard to survive, for any company to survive, this kind of negative publicity that arose over the raids and the subsequent media storm that happened,” he said.

But an investigation by the bankruptcy trustee overseeing Fair’s liquidation found the firm was in dire straits before the Nov. 24, 2009, raid. On that date, it had only $565,000 in cash in its bank accounts, but owed $1.8 million by the end of the month.•