Durham ordered to be held at halfway house for 7 days

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A federal magistrate on Wednesday afternoon ordered indicted financier Tim Durham held at a halfway house for seven days until he can provide a better accounting of his finances.

Durham, 48, appeared in court in downtown Indianapolis for an initial hearing following his indictment and arrest March 16 on 12 felony counts, including conspiracy to commit wire and securities fraud.

He and two business partners, James Cochran and Rick Snow, are accused of defrauding about 5,000 investors in Akron, Ohio-based Fair Finance Co. of more than $200 million.

A federal magistrate in Los Angeles on March 21 ordered Durham, who lives in California, released on $1 million bond. The bond was posted by Joan and Beurt SerVaas, Durham’s ex-wife and her father. Durham has been held on home detention since his release.

But Magistrate Kennard P. Foster, unsatisfied with Durham’s financial disclosures, ordered him to a halfway house at 611 N. Capital Ave. operated by Volunteers of America of Indiana Inc.

“There’s a lot of money [involved],” Foster said. “Money means flight.”

One of Durham’s lawyers told the magistrate that financial disclosures have been made.

But Foster shot back: “What I saw was not sufficient.”

The lawyer later objected to the seven-day lockdown, but the magistrate promptly overruled the objection.

Foster set a time of 2 p.m. April 11 to re-evaluate Durham’s release from detention.

Durham, dressed in a dark-colored suit, barely spoke at the conference, only answering the magistrate when asked if he had read the indictment or had any questions.

A status conference to discuss issues of the case is set for 9:30 a.m. Thursday.

Durham and his two business partners are set to be tried May 16, though Assistant U.S. Attorney Winfield Ong admitted after Durham’s hearing that it’s “unlikely” a trial could be conducted that soon.

Each defendant faces a maximum of five years in prison for the conspiracy charge, 20 years in prison for each wire fraud count, and 20 years in prison for the securities fraud. In addition, each could be fined $250,000 for each count on which they are convicted.
Charges stem from a lengthy FBI investigation that made headlines in November 2009 when agents raided Obsidian’s offices in Indianapolis and Fair’s Akron headquarters.

Prosecutors worked for more than a year to piece together the complex case and present it to a grand jury.

Cochran and Snow were released on their own recognizance following a March 16 initial hearing in Indianapolis before Magistrate Foster.

Durham and Cochran bought the then-68-year-old business for $23 million in 2002, using almost entirely borrowed money.

They immediately began doling out related-party loans, adding to the debt load, while scaling back what had been Fair’s profit-making business—buying customer-finance contracts from fitness clubs, time-share developers and other firms that offered customers extended-payment plans.

Durham and Cochran allegedly sold off additional receivables over the years to pay off investors even as they used money from Fair Finance to pay for extravagances like a $250,000 garage remodeling project, a $150,000 gambling spree and $50,000 in country club dues.

Fair Finance was forced into involuntary Chapter 7 bankruptcy in early 2010.

More of IBJ's coverage of Tim Durham can be found here.



  • Question--Bingham Hale
    th oldere guy in the pic is an attorney from Bingham Hale, Joe Hogsett's old firm--how is that not a conflict of interest?

    No wonder Tim is smiling. He gets all this attention knowing even if he is convicted it will be reversed based on conflict of interest?
  • Good Times
    Maybe Bales can sneak him out for one last bender with Brizzi.
  • Super job by the judge
    Tim is now going to have to reveal contents of accounts and corresponding account numbers--not just a "list" of purported assets like he had been duping the Ohio Department of Securities for the last ten years.

    If the judge is reading this please make sure you demand the last two year's worth of checking account records as well as all online activity AND his Apple Lap Macbook Pro computer that the feds "forgot" to retrieve when they arrested him. All his online accounts are stored on it--if you want to know where the money really is.

    He should also be required to show proof of funds for how he paid Roy Black, and how he has been paying his utilities, and $28k a month rent to 1650 Marlay owner/landlord Dan Fitzgerald of LA, that none of the feds could manage to interview. Sure would save a lot of time and expense.

    Again, great job to this judge for at least doing something.
    No question about the comments made regarding this VOA ½ way house; BTDT...Incompetent, ignorant, pointless, racist; there is no question that Tim has found his way to a place that is worse than prison and our local jail. The joint is run by buffoons! Though most of us that have experienced this place deserve it greatly, there are few that are worse than the mob that runs it. They hate work, responsibilities, whites and don't speak an intelligible language for that matter either so God only knows what they are saying when they do provide instruction or answers to questions. If the public wants to see Tim suffer, they can look no further.
  • Across the Street
    Ha! Maybe John Bales will visit him now, since Bales's office is ACROSS the street!
  • halfway house
    I don't know who got him in to that halfway house but they did him no favors. It is the most racist, unprofessional,mentally challenged place to be. So if some one thinks prison is rough they have never been to this VOA. I did alot of time and I would rather do 2 weeks in prison then to stay at the VOA for 7days. He is in hell now. LOL
    • picture this...
      I'm not supporting anyone here (heck, I'm a democrat), just wanted to present a little thought exercise. Say one of your loved ones was dying and someone you know gave you the money for an expensive, life-saving procedure that you could never have afforded on your own. That person is later convicted to stealing that money. You're still scraping by paying for health care costs and not able to afford much else. Would you compromise your loved one's continuing health to pay the money back, even though you never knew that the money was obtained fraudulently?

      I'm not saying it's the same situation, just trying to frame political donations in a slightly different light for the sake of thought and discussion.

      Welcome any replies.
      • re
        Why is a Federal Judge pussyfooting around with this Republican funding source, high value criminal who defrauding American People out of $200 Million? Why is the Judge not jailing him for Contempt of Court? Why is the Judge not demanding the Governor testify and show cause why he should not go to jail for refusing to return $275,000 squeezed from this "alleged" Criminal? The same question should be asked of former Prosecutor Brizzi (R) in testimony before this Judge.

        This is a Federal Case in the Southern District of Indiana, why is a Federal Judge not acting like he knows the Law, knows the accused's crimes, and the use of fraudulently garnered money to support Republican candidates and causes?

        There is something very fishy about this case.

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