An attorney for embattled financier Tim Durham is ripping the FBI following its seizure of Durham's vehicles Thursday in Indiana and California.

Larry Mackey, a Barnes & Thornburg partner representing Durham in a sweeping Justice Department securities-fraud probe, said the seizures were completely unnecessary because Durham several weeks ago turned over all vehicle titles to the trustee overseeing Akron, Ohio-based Fair Finance Co.’s bankruptcy liquidation.

The Durham-owned firm owes investors—Ohio residents who purchased investment certificates with interest rates as high as 9.5 percent—more than $200 million. Mackey said Durham gave up the titles because he wants the value of the vehicles to go toward mitigating investor losses.

“The FBI apparently chose to grandstand searches of Tim Durham rather than make a phone call to the trustee and discover that these vehicles have long ago been secured by the trustee to benefit the investors,” Mackey said in a written statement.

The “seizures were an unfortunate example of the FBI acting before they get all the facts,” he added.

Drew Northern, a spokesman for the FBI in Indianapolis, could not be reached for comment Friday morning.

Kelly Burgan, a Cleveland attorney representing bankruptcy trustee Brian Bash, said the FBI and Bash have been communicating and that the FBI was aware  Bash had titles before it seized the vehicles.

“I don’t know what motivation they may have had” to move forward with the seizures, Burgan said. She noted the FBI might have information she was not privy to.

Burgan said that prior to the raids, the FBI did not know exactly which titles the trustee had. She was in the process of providing that information Friday morning. Burgan did not know whether the FBI seized any vehicles the trustee was unaware of.

In his statement, Mackey suggested the FBI’s action could take away assets that otherwise would be available for investors. But Burgan said that’s not the case.

“I believe any seizure by the FBI is intended to preserve and protect property for the benefit of investors, and not to ‘compete’ with the trustee,” she said.

Thursday’s raid was the first high-profile move by the FBI since late November, when agents raided Fair offices and seized records. The same day, the Justice Department filed court papers alleging Durham was operating Fair as a Ponzi scheme, selling new investment certificates to pay off prior purchasers.

Fair didn’t reopen after the raids, and the company stopped redeeming certificates or making interest payments.

Records filed with securities regulators show Durham used Fair like a personal bank after buying it in 2002, with money flowing to support an ostentatious lifestyle, friends and business associates, as well as other companies he owned. The records show that he withdrew tens of millions under a line of credit and that he and associates borrowed even larger sums through businesses they controlled.

As IBJ first reported in October, related-party loans now top $168 million and represent the primary asset available to repay investors.

Durham recently put his Geist Resevoir mansion up for sale with an asking price of $5.5 million. Some of the proceeds of the sale are expected to go to investors. Durham also has turned over artwork the trustee will see at auction.

Durham’s attorneys have been cooperative in the bankruptcy case, IBJ is reporting in this weekend’s edition. (Click here to read).

However, in court papers, his attorneys deny he defrauded investors. They contend the offering circulars provided to prospective purchasers of investment certificates outlined the risks, including that they carried no government guarantee.