IBJNews

Durham fate rests in judge's hands

Back to TopCommentsE-mailPrintBookmark and Share

Convicted Ponzi schemer Tim Durham and two accomplices will find out Friday whether they will spend the rest of their lives in prison.

Federal Judge Jane Magnus-Stinson is scheduled to listen to testimony and consider filings from the federal probation office, the prosecution and defense in the morning before announcing her decisions from the bench in the afternoon.

A federal jury in June found Durham guilty on 12 felony charges including wire and securities fraud stemming from the collapse of Akron, Ohio-based Fair Finance Co. Durham co-owned Fair with Indianapolis businessman Jim Cochran, who was convicted on eight of 12 felony charges. Snow, the company’s chief financial officer, was convicted on five of 12 counts.

The government is recommending a 225-year prison sentence for Durham, 145 years for Cochran, and 85 years for Snow.

Likely factors in the judge's sentencing decision include the amount lost by investors, the number of victims, duration of the scheme and any prior criminal history of the defendants, said Mark D. Stuaan, a Barnes & Thornburg partner and former federal prosecutor.

He called it “risky” to predict what a judge will do in a particular case, only that a judge's job is to make sure the punishment is “sufficient but not greater than necessary to achieve justice.”

“I would be surprised if Mr. Durham does not get a very substantial sentence,” Stuaan added.

Judges have wide discretion on sentencing, though the precedent in recent years has been toward long sentences for financial criminals. Bernard Madoff was sentenced to 150 years, and R. Allen Stanford got 110 years.

Those convicted at the federal level can expect to serve at least 80 percent of their sentence, unlike at the state level where prisoners can get 50 percent off their sentence for good behavior.

Durham, 50, and his co-defendants are expected to appeal their convictions following sentencing.

At least one member of the jury that convicted the three men has been following the case closely including news reports about the sentencing recommendations of the prosecution and defense.

“This wasn’t something anyone in that room took lightly,” said Andrew J. Ozlowski, 42, of Carmel, in a phone interview. “We didn’t know what sentencing guidelines were, but we knew it was serious and we looked at it that way. We were given a job and we took a lot of time making sure we had it right as a group.”

Ozlowski said he feels good about the jury’s decision but is glad sentencing rests in the judge’s hands. He was struck by the portrayal of Durham by his defense team in a filing suggesting a five-year sentence.

“After having gone through trial, listened to calls and evidence and read documents, I disagree with the painting of Mr. Durham as a modern-day Robin Hood of trying to save the company and trying to do great things, when he did so many things along the way to hurt the company,” Ozlowski said. “This was serious. There were people’s lives affected greatly.”

A government sentencing memorandum says Durham has earned a spot among "the greediest, most selfish and remorseless of criminals" who with his co-defendants executed "one of the largest and most brazen frauds in Midwest history."

"At least $208 million in investor money has been squandered," the report says. "There is perhaps no better evidence of the extraordinary scope of this scheme than the fact that today, almost three years after Fair's collapse and despite the best efforts of a bankruptcy trustee, only about $6 million has been collected from Fair's debtors with almost no prospect for more recoveries."

In a defense filing, Durham attorney John Tomkins called the sentencing recommendation "absurd" and said the suggestion was "heavily influenced by an erroneous loss calculation under the advisory guidelines."

He asked the judge to give Durham a five-year sentence, with three years in prison followed by two years of home confinement.

Tompkins argued in the filing that Durham was a law-abiding citizen with no criminal history before the jury returned its guilty verdicts. He said Durham never intentionally defrauded the investors, and that actual losses were as much a result of the recession 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.

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

At trial, the prosecution's case leaned on hours of wiretapped conversations between Durham and Cochran, as they scrambled to keep Fair afloat. IBJ collected some key exchanges in a series of edited recordings. Among them was a brief discussion between Durham and Cochran about the possibility they could serve jail time (see video below).

 

“The government put forward a pretty extensive and elaborate case with lots of evidence,” said Ozlowski, who served on the jury. “In a situation like that you would expect the defense to come back with a lot more than they ultimately did.”

He added that the paltry defense did not factor into his read of the evidence or the jury’s ultimate decision.

For all of IBJ's coverage of Tim Durham and Fair Finance, click here. Visit IBJ.com beginning at 9 a.m. Friday for updates on the sentencing of Durham, Cochran and Snow.

ADVERTISEMENT

  • Defense????
    did durham really PAY for this attorney???? This is honesty the WORST attempt I have ever seen in a courtroom. They took it to trial and then did NOTHING! Should have made a plea deal early and got maybe 10 years. Now they are definitely getting life in prison. Judges hate when obviously guilty ppl take it to trial and fail miserably! What a moron!!!!!! Tomkins should retire NOW
  • DEATH WOULD BE BETTER
    L2 your life obviously was not ruined by tim and his gang and you did'nt have anyone die in your family due to the stress of losing thier life savings.The number of people who have had thier lives literly stolen from them these thief's should be put to death and I agree with you we should'nt pay any more for them.Just remove them from society and move on.As sure as they sin once they will come back if given the chance.Death is the answer and no other victim's in the future.
  • LIFE IN PRISON?
    He deserves to be punished no doubt but, LIFE? They let murderers and child molesters back into society but this guy they want him to serve 225 years. Sorry guys, keep the violent criminals in a cage keep the non violent ones on a leash. I don't want my taxes being spent to keep this guy in a prison for the rest of his life. I hardly feel threatened by Tim Durham
  • effective U.S. Attorney
    Joe Hogsett has been setting a wonderful example for how effective a U.S. Attorney can be. He doesn't have any tolerance for criminals. He has prosecuted many dangerous and destructive psychopaths, and had them removed from society so that law abiding citizens can live more safely. I expect the sentencing of Durham will be used to set a very high profile example for what the public wants from our criminal justice system. Will be interesting to see if that sentencing does a little repair job on Durham's unfounded arrogance along with that famous smirk.

    Post a comment to this story

    COMMENTS POLICY
    We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
     
    You are legally responsible for what you post and your anonymity is not guaranteed.
     
    Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
     
    No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
     
    We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
     

    Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

    Sponsored by
    ADVERTISEMENT

    facebook - twitter on Facebook & Twitter

    Follow on TwitterFollow IBJ on Facebook:
    Follow on TwitterFollow IBJ's Tweets on these topics:
     
    Subscribe to IBJ
    1. why oh why does this state continue to elect these people....do you wonder how much was graft out of the 3.8 billion?

    2. i too think this is a great idea. I think the vision and need is there as well. But also agree with Wendy that there may be better location in our city to fulfill this vision and help grow the sports of hockey and figure skating in Indy. Also to help further develop other parts of the city that seem often forgotten. Any of the other 6 townships out side of the three northernmost could benefit greatly from a facility and a vision like this. For a vision that sounds philanthropic, the location is appears more about the money. Would really like to see it elsewhere, but still wish the development the best of luck, as we can always use more ice in the city. As for the Ice growth when they return, if schedules can be coordinated with the Fuel, what could be better than to have high level hockey available to go see every weekend of the season? Good luck with the development and the return of the Ice.

    3. How many parking spaces do they have at Ironworks? Will residents have reserved spaces or will they have to troll for a space among the people that are there at Ruth Chris & Sangiovese?

    4. You do not get speeding ticket first time you speed and this is not first time Mr.Page has speed. One act should not define a man and this one act won't. He got off with a slap on the wrist. I agree with judge no person was injured by his actions. The state was robbed of money by paying too much rent for a building and that money could have been used for social services. The Page family maybe "generous" with their money but for most part all of it is dirty money that he obtained for sources that are not on the upright. Page is the kind of lawyer that gives lawyers a bad name. He paid off this judge like he has many other tine and walked away. Does he still have his license. I believe so. Hire him to get you confiscated drug money back. He will. It will cost you.

    5. I remain amazed at the level of expertise of the average Internet Television Executive. Obviously they have all the answers and know the business inside and out.

    ADVERTISEMENT